Archi5 Bussiness Plan
A Business plan for Architectural firm in Melbourne 2013
Archi5.Design Hizkia Gouw Dawei Sun Farbod Fath. Anthony Po
1. Overall Business Strategy
2. Marketing Strategy
3. Marketing and Sales Pipeline
4. Financial Plan
1.1 Company Logo 1.2 Vision 1.3 Company Profile 1.4 SWOT Assesment
2.1 Company Service 2.2 Competitive advantage & Service Mix 2.3 Target market 2.4 Marketing & Networking 3.1 Relating marketing, goals and operational issues 3.2 Promotional Tools
4. 1 Cost to Start Up 4. 2 Profit and Loss and Cash Flow Analysis 4.3 Rates Analysis 4.3.1 Hours Spent on Project
4.3.2 Cost Rates and Charge Out Rates 4.3.3 Break Even Analysis
Executive Summary Archi5 is an architectural design studio based in Melbourne, Australia that provides architectural design services on multi-purpose temporary events and facilities including pop-up structure for retail and exhibition, installation, and pavilion. The strengths of Archi5 are the integration of digital fabrication technology. By applying the state of art computer modelling technique and digital fabrication technology within our design strategy, Archi5 is capable to produce cost effective and feasible temporary structures that could respond to different design issues. Our design is a resultant of synergy that provides maximum value, design efficiency and caters to our broad range of clientele. The report aims to elaborate Archi5’s business strategy of establishing itself as a new entrant into the Architectural industry in Melbourne. Archi5 emphasises on designing high quality and user responsive temporary architecture, which will be the trademark of the practice. Archi5 will be marketed in 2 stages - the practice specializes in temporary installation and kiosk for the use of retail and exhibition purposes at initiation, with progressive diversification into building renovation and interior design. It will help the practice to build brand presence in the architectural sense of Melbourne, forging new relationships with potential clients, working partners, consultants and suppliers. Pending business and economic activity and subsequent expansion of the practice, Archi5 will also collaborate with cutting edge digital fabrication technology manufacturers to gradually develop into a research and development practice combining architecture, furniture design and such digital technology. Archi5 is to be established in Melbourne, Australia. Being one of the most liveable cities in the World, with its cultural rich background as well as its well-developed architectural industry, makes Melbourne to be a viable platform in which to establish the firm with intention for regional and international expansion in the upcoming years.
1. Overall Business Strategy 1.1 Company Logo
The company name – Archi5 aims to establish an image of collaborations between its four founders and the client. The design of the logo tries to represent the artistic and creative approaches of Archi5 into their design.
With the development of added niche in pop-up architecture, which includes installation, pavilion and kiosk design for commercial and private use, and their fabrication, Archi5’s aspiration is to design and develop cutting edge digital fabrication technologies that can be integrated into the everyday use of the built environment. This foray into pop-up architecture design and manufacture will be initiated by first gaining a reputation as an architectural design practice that specializes in utilizing the most current parametric computer modelling technologies and digital fabrication techniques with design. By exposing the latest form-making technology to the industry, Archi5 envisions that it would result in key collaborations with major construction material manufacturers. Through which, Archi5 intends to further tie into a potential researches and development agreements towards future technologies. Keys to Success •
Provision of a specialized integrated service of design consultant with popup architecture and fabrication to offer distinction from market competition
Provision of building renovation services to expand the discipline of the practice
Potential collaboration and involvement with key digital fabrication technologies developers towards the development of the latest digital fabrication techniques for the industry
Objectives & Milestones •
Establishment of Archi5 as a leader in pop-up architecture integrated with digital fabrication technology
Profit of 10% in the second year of operation
Accelerated break – even point by end of 2013
Establishment of key contacts and networking towards regional digital fabrication technology developers
Expansion into Asian market by 2017
1.3 Company Profile
Established in Melbourne, Australia, Archi5 draws from the diverse backgrounds of its founding members to generate unique design solutions. Archi5 is principally owned and operated by these founding members, whose backgrounds and networks in neighbouring countries throughout Asia also provide a platform for future growth and expansion in the region. With each founding member trained in architectural design and digital fabrication techniques, each also bring forward unique individual specialization, such as interior design, graphic design, furniture design as well as project management accreditation and business operation. The synergy of these diverse individual skills among the firm’s members with architectural design is identified as the core strength and driving force behind Archi5 Directors Farbod Fathalipouri
Responsibilities Design Director
Client Consultation Marketing/ networking
Hizkia Gouw David Sun
Council approvals Anthony Chak Ming Po
Open bank account
Contribution of $5,000 each from the 4 founders
Registration of domain website
Rent office space
Company’s name registration
Establish business plan & financial system
Take part in competitions
Aiming to attract small commison
Registering with AIA,
Attending Architectural conference
Hiring necessary employee
Update website to show company’s achievements
Aiming to attract bigger commission
Collaborating with local artists, qualified architects
Ongoing overseas visits and participating in seminars
Attend different expo for exposure
Collaboration with digital fabrication technology developer
Collaboration with digital fabrication technology developer
1.4 SWOT Assessments Strengths
•Cutting edge form making technology integrated with digital fabrication techniques to achieve groundbreaking aesthetical appeal •Cost effective and time efficient •Portable structure with minimal environmental damage •Custom-made system to satisfy different client needs •Low in capital investments with high turnover Weaknesses
•Limited existing local network •Lack of experience on project management Opportunities
•Engagement in niche markets •Instantaneous solution to low budget users to achieve the best design outcome •Constants needs of services from small scale to large scale commercial users Threats
•Market competition with large scale practice •Limited local supplier option for digital fabrication Limited supply of local skilled work force
2. Marketing Strategy 2.1 Company service
As a new entrant, Archi5 believes in a strong positioning to strive as a leader in the industry niche of digital fabrication at the area of architecture, urban planning, furniture and product design to accomplish the main design specialty on temporary event and space for commercial and cultural purposes in Melbourne, Australia. In addition, Archi5 also provides supplemental space and for shops.
2.2 Competitive advantage & Service Mix
Archi5 focus in integrating digital fabrication will be the core point of our practice. The current skills within the firm from academic and industry experience will maximize the leading advantages in the digital fabrication and environmental responsive design through adopting the most advanced methodology of digital fabrication which sees a growing trend in architecture industry both locally and globally. Offer clean and efficient documentation processes and construction methods by engaging popular Building information modeling tools, that are popular in architecture practice currently. Produces low impact digital construction across all different scales platforms by using recyclable materials meanwhile reducing the budget of the cost of digital fabrication. Attest and build reputation in innovative exploitation of digital media cross public and private use purpose, such as temporary event space and short term retail installations.
2.3 Target market
Archi5 is a government â€“linked design practice which is approved to be a digital experiential lab in Melbourne in term of the temporary event space and short term retail stores. Provision advanced digital fabrication skill with low impact materials to make digital projects into small and middle scale shop owner, also could be capable to design large scale pavilion and installation for city council and national campaign.
2.4 Marketing & Networking
Majority of the marketing efforts will be spent on community involvement and send intelligent student go to institution to study architecture design and digital fabrication related degrees. It is important to build up reputation among practices by actively participate in competitions both at international and local standard. Engages in community projects will help the firm to build up Archi5â€™s local presence. The firm is targeting to collaborate with more established and developed practices locally and internationally among discipline. Online media will become significant tool to showcase portfolio and reaching the largest range of the clients especially digital architecture will be spread faster though clear and attractive webpage layout. In order to approve this approach, Graphic and UI designer will be hired for website and product (stationery) design. The website needs to be clearly layout with the information that is consistently updated. Shortcut and fan pages will be set up through the popular website like YouTube, Twitter, and Facebook in order to increase the recognition of the practice worldwide.
FARBOD FATHALIPOURI - 373457 Development of the Marketing and Sales Pipeline 6 Archi5.Design
Marketing and Sales Pipeline 3. Marketing and Sales Pipeline
As our sales process is highly dependent on its strategy, As mentioned our focus on digital spaces researches and fabrications application temporary event spaces, results to promotion of our brand As our sales process is highly dependent on itsinstrategy, As mentioned our focus on digital spaces researches among industries, architecture societies councils the help installations and fabrications application in temporary event and spaces, results with to promotion of of ournetworking, brand among public industries, architecture societies and councils with the help of networking, public installations and published researches and published researches even prior to the setting up of our business. In this essence a brief list of even prior to the setting up of our business. In this essence a brief list of proposed strategies to push our proposed strategies to push our overall sales pipeline strategy (Diagram 1) listed in the table below and overall sales pipeline strategy (Diagram 1) listed in the table below and a description of the effecting a description of the effecting and issues following the table. elements and issues following theelements table. Diag. 1
Preparation Phase Preparation Phase (Incubation Period) (Incubation Period) Justification of Business Academic Connections Justification of Business
Researches and Articles Experimental Design Installations Academic Connections
PublicityPhase Phase Networking Publicity Networking (Initialization Period) (Maturity Period) (Initialization Period)public affairs (MaturitySales Period) Getting job through Pipeline through Specialty Company website Participating in public researches Getting job through public Sales Pipeline through Specialty affairs Participating in Competitions Connecting with NGO networks
Participating in Public events Participating Participating in Exhibitions and Company website in public researches seminars Cooperating with international and Company manifesto and Connection with Educational Researches Articles Participating with NGO networks other digitaland designer and artists publications in Competi- Connecting networks Voluntary Productions for council tions Visiting industries and distributing Establishing connection with and humanitarian societies and local offers and information on our international active companies in Experimental Design Installations Participating in Public Participating in Exhibitions and semischools services digital realms events nars Cooperating with international and Company manifesto and Relating marketing, goals and operational issues other digital designer and artists publications
Connection with Educational networks
In the business of temporary event spaces our main concentration is based on the digital space researches to get to be known in the for localcouncil and in Visiting a largerindustries scale by and international research community provides the Voluntary Productions Establishing connection which with interground for our installation in public in order toand interact publicactive realmcompanies and the society. This lets us and humanitarian societies and local spaces distributing offers infor-with national in digital realms schools mation on our the services to produce our networks and connections through publicity phase. Initializing the company, we will run campaigns and public events which targets our potential clients including industries, city councils, exhibition managers and etcâ€Ś beside the people interacted with events to cut down the issue of slow initializing period; building our public rep meanwhile it leads us to a greater network.
3.1 Relating marketing, goals and operational issues
Having our public relationsevent and spaces reputation builtconcentration we will crossisto the on network andspace referral mode of In the business of temporary our main based the digital researches to our sales pipeline in which thelocal initialand enquiry and scale initialby consultation are community less effective compared tothe our Proposal/ get to be known in the in a larger internationalsteps research which provides ground installation in public spaces in order to interact public realm and theand society. This us letswith us serious Quote for andour closing sales steps. This strategy will reduce thewith unwanted customers provides toenquirers produce our networks and connections through the publicity phase. and highly effective people in event business which could be an issue in sales pipeline. These Initializing the company, we will run campaigns and public events which targets our potential clients including industries, city councils, exhibition managers and etcâ€Ś beside the people interacted with events to cut down the issue of slow initializing period; building our public rep meanwhile it leads us to a greater network. Having our public relations and reputation built we will cross to the network and referral mode of our sales pipeline in which the initial enquiry and initial consultation steps are less effective compared to our Proposal/ Quote and closing sales steps. This strategy will reduce the unwanted customers and provides us with serious enquirers and highly effective people in event business which could be an issue in sales pipeline. These clients can also be used as our potential research areas and partners in this field which leads to a higher reputation in the event space architects and digital fabricators.
3.2 Promotional Tools
In this essence we will use a variety of booster and advocators to promote our business among the potential clients:
Website: a beautiful, well designed website which introduces the company and our goal in the appropriate ways will help us to make more attraction in order to make initial enquires. We also can provide schematic categories to provide a great deal of general consultation to the potential customers which push the sales pipeline steps forward faster.
Social Networking : organizing Facebook pages of the company and a fan page beside Twitter and tumbler in order to establish a passive consultation system through publishing our goals, ideas, recent projects and etc. helps us to build a better sales pipeline system.
Online Architecture communities: submitting our achievements and articles in online architecture communities such as Arch daily results to the invitation of professional contacts in event space areas.
Publishing books and articles on temporary space events beside giving us a professional look in public view and providing passive consultation results to a higher rate of initial enquiry and an easier cross from initial enquiry to the initial consultation stage.
Public Installations and exhibitions: exhibition and public installations which will be held annually promote more customers and increase the popularity and reputation of company.
Seminars, Conferences and Lectures: Participating in seminars and conferences and giving lectures results to branding of our practice which leads to a higher rate of trust from the customers and an easier process of sales pipeline.
Trade Shows: as a basic strategy for Archi 5, we will promote local industries and events by visiting them and providing them with our consultations and information; in this essence a selective set of customers will be collected which fortify the process of sales pipeline and leads to less issues in the sales pipeline.
Competitions: Participating in competitions provides us with the ground in order to showcase our achievements, attracting more professional customers in event space business and get updates of technology and researches.
Archi 5 also thinks about an update case during its progress through its sales pipeline in order to update and rectify the leakages of its sales pipeline besides taking over unforeseen cases and issues during its progress.
4. Financial Plan 4. Financial Plan The financial plan is prepared with the following assumption: The financial plan is prepared with the following assumption: - There will be no major recession from 2013-2016 Australia. - in There will be no major recession from 2013-2016 in Australia. - There is low competition with rivals in the temporary structure/installation - There is low competitionmarket. with rivals in the temporary structure/installation market.
4. Financial Plan
The financial plan prepared with the following assumption: 4.1 Cost to Start UpisArchi5 4.1 Cost to Start Up Archi5 apply will for abegovernment grant of $50,000. The grant is Australia. called COMET (Commercializing Archi5 will • There no major recession from 2013-2016 in Archi5 will apply for a government grant of $50,000.Emerging The grantTechnologies), is called COMET (Comme and the requirements are suitable for Archi5, as it is working under small business program. In addition, each director will pitch in program. In and the requirements are suitable for Archi5, as it is working under small business • There is low competition with rivals in the temporary structure/installation market.
$5,000. This amount of money is needed in order$5,000. to startThis up the business and tois ensure the business be business able to run amount of money neededthat in order to start will up the and to ensure th smoothly without any financial difficulties in its first year. without any financial difficulties in its first year. smoothly
4.1 Cost to Start Up
Archi5 will apply for a government grant of $50,000. The grant is called COMET (Commercializing Emerging Technologies), and the requirements are suitable Archi5, it isand Cash Flow Analysis working under small business program. In 4. 2 Profit and Loss and Cash Flow Analysis 4. for 2 Profit and as Loss Archi5 will startdirector the company with the staff number. Themoney firmcompany aims to recruit orstaff part-time addition, each will pitch in minimum $5,000. This amount of is needed order to start up the architecture business Archi5 will start the with in theinternship minimum number. The firm aims to recruit interns students to collaborate the four founders. of the founders get the with same amount ofdifficulties salary, All andofin will each yearsame as amount of sala students to collaborate four founders. the founders get the and to ensure that thewith business will be able All to run smoothly without anythe financial itsincrease first year. the company is expected to gain more profit. (Tablethe 1) company is expected to gain more profit. (Table 1)
4. 2 Profit and Loss and Cash Flow Analysis The following table is the projected profit and loss of Archi5 from 2013 to2016 (Table 2). Archi5 is estimated to gain profit of
The following table is the projected profit and loss of Archi5 from 2013 to2016 (Table 2). Arch
Archi5 will start theyear minimum staff firmofaims to recruit more than 10% bythe thecompany end of the with second operation. more thannumber. 10% byThe the end the second year internship operation. or parttime architecture students to collaborate with the four founders. All of the founders get the same amount of salary, increase each year as the to company isbyexpected gain more(Table profit. 1) $149,054 in the firm balance (Table 3) the in end 2016, Archi5 is expected to have Thus byand the will end of 2016, Archi5 is expected haveThus $149,054 theofto firm balance 3)(Table
Staff Design Director (Farboud) Managing Director (Hizkia) Senior Architect (Anthony + David) Student Internship/Part Time Total Salary
2013 Salary Qty Total $(A) $(A) 45.000 45.000 45.000 45.000 45.000 15.000
90.000 15.000 195.000
The following table is the projected 2013 2014 Item and loss of Archi5 from 2013 to2016 profit Fixed Overhead (Table 2). Archi5 is estimated to gain profit ARBV Registration 1.000 1.000 of more thanFee 10% by the end of the second ARBV Renewal 184 Bank Account Setup 200 year operation.
Bank Fees Insurance 100,000 Office Rental Furniture 80,000 Computers Printers 60,000 Accountant's fee 40,000 Lawyer's fee Website Domain Registration 20,000 Website Hosting 0 Total Fixed Overheads 1
60 3.000 17.500 4.500 8.000 2.500 1.500 2.000 15 60 40.335
60 5.000 17.500 500 2.500
1.500 2.000 15 60 30.319
2015 2014 2015 2013 20162014 Qty TotalSalary Salary Qty Total Qty Total Salary Qty Tota Salary Qty Total SalarySalaryQty Total Staff $(A) $(A) $(A) $(A) $(A) $(A) $(A) $(A) $(A) $(A) $(A) $(A) Design Director (Farboud) 45.000 60.500 50.000 65.000 50.000 55.000 55.00 50.000 50.000 55.000 45.000 55.000 Managing (Hizkia) 45.000 60.500 50.000 65.000 50.000 55.000 55.00 50.000 Director 50.000 55.000 45.000 55.000 Senior Architect (Anthony + David) 90.000 60.500 50.000 121.000 100.000 55.000 110.00 50.000 100.000 55.000 45.000 110.000 Student Internship/Part Time 15.000 15.000 15.000 60.000 30.000 15.000 30.00 15.000 30.000 15.000 15.000 30.000 Total Salary 195.000 230.000 250.00 230.000 250.000 311.000 Table 1: Archi5’s Salary Chart Table 1: Archi5’s Salary Chart
2015 2016 Item Fixed Overhead ARBV Registration1.000 1.000 ARBV368 Renewal Fee 552 Bank Account Setup Bank Fees 60 60 Insurance 8.000 10.000 Office Rental 17.500 17.500 Furniture 500 500 Computers 2.500 2.500 Printers Accountant's fee 2.000 2.000 Lawyer's fee 2.500 2.500 Website Domain Registration 15 15 Website Hosting 60 60 Total Fixed Overheads 34.503 36.687
2013 1.000 200 60 3.000 17.500 4.500 8.000 2.500 1.500 2.000 15 60 40.335
Controllable Overheads Advertising and Marketing 1.500 -40,000 Year of Operation Office Utility and Electricity 800 Software’s Licensing 2.000 Couriers and Postages 200 Table 2: Profit and Loss Telephone, Fax, and Internet 500 Professional Development 500 2013 2014 Budget Item Q1 Q2 Q3 Q4 Q1 Q2 600 Q3 Petty Cash Travel Expenses 650 Equity Government Total Controllable Overheads 6.750 Grant 50.000
120,000 100,000 80,000 60,000 40,000 20,000
60 5.000 17.500 500 2.500
60 8.000 17.500 500 2.500
60 10.000 17.500 500 2.500
1.500 2.000 15 60 30.319
2.000 2.500 15 60 34.503
2.000 2.500 15 60 36.687
1.500 800 500 200 500 500 600 650 5.250
1.500 800 500 200 500 500 600 650 5.250
304.241 350.000 45.759 13,07%
370.584 450.000 79.416 17,65%
Controllable Overheads Advertising and Marketing 1.500 1.500 1.500 Office 1.500 1.500 Utility and Electricity 800 800 800 Software’s 800 Licensing 800 2.000 500 500 Couriers 500and Postages500 200 200 200 Telephone, 200 Fax, and Internet 200 500 500 500 Professional 500 Development 500 500 500 500 Petty Cash 500 500 600 600 2015 Q4 600 Q1 Q2600 Q3 Travel Expenses Q4 600 650 650 650 Total Controllable Overheads 650 650 6.750 5.250 5.250 5.250 5.250 Shareholders Staffing Cost Contribution 20.000 Staffing Cost Funds Carried Total Staffing Cost 195.000 230.000 Forward from Total Staffing Cost35.114 27.225 19.188 195.000 230.000 250.000 311.000 Previous 47.766 9.836 10.308 25.790 41.562 46.281 51.088 65.986 Total Funds 70.000 47.766 35.114 27.225 19.188 9.836 10.308 25.790 41.562Total 46.281 51.088 65.986 Expenditure 242.085 265.569 Total Expenditure 242.085 265.569 Contingency 289.753 352.937 Cash Flow (5%) 12.104 13.278 Income Interest Earned 1.313 896 658 510 360 184 193 484 779 868 958 1.237 Contingency Cash Flow (5%) 12.104 13.278 14.488 17.647 Architectural Fee 40.000 50.000 55.000 55.000 60.000 70.000 85.000 85.000 80.000 80.000 90.000 100.000 Total Income 41.313 50.896 55.658 55.510 60.360 70.184 85.193 85.484 80.779Total Overheads 80.868 90.958 101.237 254.189 278.847 Table 3: Cash Flow Total Overheads 254.189 278.847 Estimated 304.241 Sales 370.584 (Tax Inclusive) 220.000 310.000 Estimated Sales (Tax Inclusive) 220.000 310.000 Net 350.000 450.000 Profit -34.189 31.153 Net Profit -34.189 31.153 79.416 Net45.759 Margin -15,54% 10,05% 160,000 Table 2: Profit Loss Net Margin -15,54% 10,05% 13,07% 17,65% 140,000 Table 2: Profit Loss -20,000
40,000 40,000 20,000 20,000 0
Year of Operation Year of Operation
Thus by the end of 2016, Archi5 is expected to generate $149,054 in the firm balance (Table 3)
2013 2014 2013 Budget Item Q1 Q2 Q3 Q4 Q1 Q2 Q32014 Q4 Budget Item Q1 Q2 Q3 Q4 Q1 Q2 Q3 Equity Government Equity GrantGovernment 50.000 Shareholders Grant 50.000 Contribution 20.000 Shareholders Funds Carried Contribution 20.000 Forward from Funds Carried Previous 47.766 35.114 27.225 19.188 9.836 10.308 25.790 Forward from TotalPrevious Funds 70.000 47.76647.766 35.11435.114 27.225 27.225 19.188 19.188 9.836 9.836 10.308 10.308 25.790 Total Funds 70.000 47.766 35.114 27.225 19.188 9.836 10.308 Income Interest Earned 1.313 896 658 510 360 184 193 484 Income Architectural Fee 40.000 50.000 55.000 55.000 60.000 70.000 85.000 85.000 Interest Earned 1.313 896 658 510 360 184 193 Total Income 41.313 50.896 55.658 55.510 60.360 70.184 85.193 85.484 Architectural Fee 40.000 50.000 55.000 55.000 60.000 70.000 85.000 Table 3: Cash Flow Total Income 41.313 50.896 55.658 55.510 60.360 70.184 85.193 Table 3: Cash Flow
Q3 2015 Q4 Q2 Q3
41.562 41.562 25.790 25.790
46.281 46.281 41.562 41.562
51.088 51.088 46.281 46.281
65.986 65.986 51.088 51.088
779 80.000 484 80.779 85.000 85.484
868 80.000 779 80.868 80.000 80.779
958 90.000 868 90.958 80.000 80.868
1.237 100.000 958 101.237 90.000 90.958
1.237 100.000 101.237
160,000 140,000 100,000 120,000 80,000 100,000
60,000 80,000 40,000 60,000 20,000 40,000 20,000
Table 3: Cash Flow
4.3 Rates Analysis 4.3 Rates Analysis 4.3.1 Hours Spent on Project
4.3.1 Hours Spent on Project
A= Annual Salary A= Annual Salary P= Project Time P= Project Time NP= Non-Project Time
Staff Design Director (Farboud) Managing Director (Hizkia) Senior Architect (Anthony + David) Student Internship/Part Time Total Salaries `
%(P) $(P) 45.000 70% 31.500 45.000 30% 13.500 90.000 75% 67.500 15.000 100% 15.000 195.000 127.500 Table 4: Billable Hours
%NP 30% 70% 25% 0%
9.450 9.450 16.875 35.775
4.3.2 Cost Rates and Charge Out Rates
4.3.2 Cost Rates and Charge Out Rates The calculation of the cost rates and the charge out rates are taking into account of 10% profit and 1989 of working days per year
per person. The calculation of the cost rates and the charge out rates are taking into account of1,99 10% profit and 1989 of Overhead Factor: working days per year per person. Total Overheads/ $(P) = $ 254,189.25 / $127,500 Overhead Factor: 1,99 Number of Working Hours per Year Per Person 1989 days Total Overheads/ $(P) = $ 254,189.25 / $127,500
BR=Base Rate = $(A)/HRS per YR
CR= Cost Rate=Hours BR +perBR x Per OFPerson Number of Working Year
COR= Charge Out Rate = CR + CR x % Profit [% profit was set at 10%] HRS (P) = Hours spent on Projects (Billable) = HRS/YR x % Project Time (P) Staff Design Director (Farboud) Managing Director (Hizkia) Senior Architect (Anthony + David) Student Internship/Part Time
HRS/YR 1989,00 1989,00 3978,00 1000,00
BR ($) 22,628 22,62 22,62 15,00
CR ($) 67,73 67,73 67,73 44,90
COR ($) 74,50 74,50 74,50 49,40
HRS (P) 1392,30 596,70 2983,50 1000,00
COR x (P) ($) 103.729,67 44.455,57 222.277,86 49.395,08
Managing Director (Hizkia) Senior Architect (Anthony + David) Student Internship/Part Time Total Salaries `
45.000 30% 90.000 75% 15.000 100% 195.000 Table 4: Billable Hours
13.500 67.500 15.000 127.500
70% 25% 0%
9.450 16.875 35.775
4.3.2 Cost Rates and Charge Out Rates The calculation of the cost rates and the charge out rates are taking into account of 10% profit and 1989 of working days per year Archi5.Design per person. Overhead Factor: 1,99 Total Overheads/ $(P) = $ 254,189.25 / $127,500 Number of Working Hours per Year Per Person 1989 days BR=Base Rate = $(A)/HRS per YR BR=Base Rate per YR CR= Cost Rate= BR=+ $(A)/HRS BR x OF CR= Charge Cost Rate= BR + BR COR= Out Rate = CR + CRxxOF % Profit [% profit was set at 10%] COR= OutonRate = CR + CR=xHRS/YR % Profit profit was HRS (P) =Charge Hours spent Projects (Billable) x %[% Project Time (P)set
at 10%] HRS (P) = Hours spent on Projects (Billable) = HRS/YR x % Project Time (P) Staff Design Director (Farboud) Managing Director (Hizkia) Senior Architect (Anthony + David) Student Internship/Part Time Reconciliation
HRS/YR 1989,00 1989,00 3978,00 1000,00
BR ($) CR ($) COR ($) 22,62 67,73 74,50 22,62 67,73 74,50 22,62 67,73 74,50 15,00 44,90 49,40 Total Charge out of Staff Table 5: Cost Rates and Charge Out Rates
4.3.3 Even Analysis 4.3.3Break Break Even Analysis
HRS (P) 1392,30 596,70 2983,50 1000,00 8956,00
COR x (P) ($) 103.729,67 44.455,57 222.277,86 49.395,08 523.587,84
These calculations are based on the estimation that Archi5 is able to break even by the end of 2013. These calculations are based on the estimation that Archi5 is able to break even by the end of 2013. Average Charge out rate to break even at end of 2013: $58,46 Total COR x (P) /Total hrs (P) Average Charge out rate to break even at end of 2013: $58,46 = $523,587.84 / 8956 hrs Total COR x (P) /Total hrs (P) ==Average $523,587.84CR / 8956 hrs =Average CR Total Billable hours per month required to break even at the end of 2013: 362 hrs/months (with current staff) Total Annual Expense / Total Month/ Average COR Total Billable hours per month required to break even at the end of 2013: 362 hrs/months (with current staff) = $ Annual 254,189.25 / 12 months 8956 hrs Total Expense / Total Month// Average COR = $ 254,189.25 / 12 months / 8956 hrs