Guc arct 702 legislations lecture 5 business management 19 10 2017

GUC – German University in Cairo

Architecture and Urban Design

ARCH 702 Legislation, Professional Practice and Contracts Fall 2017 Instructor: Dr. Yasser Mahgoub

Business Management Starting your own practice 1

Business Management & Professional Services Provided by Architects

2

Project Team

Owner

General Contractor

Architect

Owner

Architect

Consultant

Consultant

Contractor

Consultant

Trade Contractor

Trade Contractor

Trade Contractor

The Architect!

An individual who starts out knowing a little about a lot of different things, and, over time, learns less and less about more and more, until he ends up knowing nothing about everything.

The Engineer!

An individual who starts out knowing a lot about a few things, and, over time, learns more and more about less and less, until he ends up knowing everything about nothing.

The Contractor!

Someone who starts out knowing a lot about many things, but ends up knowing nothing about anything

Introduction • The profession as we know it today was formalized in the nineteenth century.

• The twentieth century, and especially its last three decades, has been a time of explosive growth and change for the profession.

• Architects are part of a larger planning, design, and construction enterprise that works to meet our needs for shelter and habitat.

The Architect as a Trusted Advisor!

Planning & Strategy Facilities Planning

Real Estate

Workplace

Strategy

Solutions

Evaluate

Project Programming

Operations &

Design &

Management

Implementation

Operate

Design

Move-in

Build 9

Client

Architect Architecture/architectural design Interior design/architecture Engineering Graphic Design Planning Space/Facilities Planning Master Planning Construction Administration Urban Planning/Design Landscape Architecture Programming Strategic Planning Construction Cost Planning & Estimating Project Management

Facility Management Multimedia/Information Services Site Analysis/Selection Consulting Facilities Consultation/Analysis Lighting Design Relocation Scheduling Value Engineering Furniture Selection and Specifications Program Management Construction Documentation Environmental Design CADD Design Build

10

ARCHITECTURAL PRACTICE • Architectural practice encompasses the activities of organizing, managing, and documenting the architectural project delivery process as it applies to the modification of the built environment through DESIGN.

Organize

Manage

Document

11

Activity The Trio Architect – Client – Contractor

Project Team

Owner

General Contractor

Architect

Activity Owner

Architect

Consultant

Consultant

Contractor

Consultant

Trade Contractor

Trade Contractor

Trade Contractor

Activity • Summary: Group of 4 students; each will represent architect, client, and contractor. One student will write minutes of meeting.

• The client will start requesting a project design from the architect and then request construction from the contractor.

• Assessment: Quality of discussions and minutes of meetings.

Groups Notes • • • • • • • • • • • • • • • • • • • • • • • • •

Where?

Sustainable?

Budget?

Duration (time)?

Area of land?

Special requests?

When to start?

Design time?

Penalties?

Suppliers?

Architect’s Fees ? ____ Project type?

Space program Floors # Interior design?

Location? Area?

Estimated budget?

Down payment?

Time schedule?

Contracts?

Quality of finishing?

Materials required?

Project manager!?

Future maintenance?

Groups Notes • • • • • • • • • • • • • • • • • • •

Luxury level?

Progress Meetings? ____ Target customer?

Land?

Program?

Budget?

Materials?

Finishing?

Time limit?

Design issues (structural difficulties)? ______ Location?

Area? Program?

Budget?

Landscape?

Materials?

Specific reqeusts (smart)?

Time

Groups Notes • • • • • • • • • • • • • • • • • • • • • • • •

CV s?

Timeline?

Payments?

Disagreements? Disputes?

Budget?

Project Priorities?

Main structural system?

Materials?

Communication? _____ Location?

Requirements?

Budget?

Interior designer?

Time?

Space program? ____ Type?

Size? # floors?

Type (style) of design?

Budget?

Quality?

Time?

Groups Notes • • • • • • • • • • • • •

Who (occupants)?

Specific desired design?

Meetings?

Materials?

Budget?

Structure? ____ Land?

Capacity?

Style or impression?

Facilities?

Budget?

ID? Maintenance? FM?

Professional Services Provided by Architects

Dr. Yasser Mahgoub

Professional Services Provided by Architects 12%

33%

10%

6%

8% 31% Dr. Yasser Mahgoub

Drawing Information Discussion Writing Thinking Misc.

Professional Services Provided by Architects

Dr. Yasser Mahgoub

Professional Services Provided by Architects

Dr. Yasser Mahgoub

Professional Services Provided by Architects

Dr. Yasser Mahgoub

Professional Services Provided by Architects

Dr. Yasser Mahgoub

Professional Services Provided by Architects

Dr. Yasser Mahgoub

Professional Services Provided by Architects

Dr. Yasser Mahgoub

Time budget and project phases used in "Typical current practice" 15% Schematic 20% Design Development 40% Construction Documents 5% Bid/Negotiation 20% Construction supervision

Construction Documents

Time budget and project phases used in "Typical current practice" Schematic 15%

Construction 20%

Bid/Negotiation 5%

Design Development 20% Construction Documents 40% Construction Documents

Why do you think that having your own firm is the right thing for you?

Dr. Yasser Mahgoub

Starting your own practice

Dr. Yasser Mahgoub

ARCHITECTURE FIRM An architecture firm usually undertakes the various architecture services during the various project phases: 1. Concept Design 2. Schematic Design 3. Design Development 4. Construction Documents 5. Site Supervision To start your business, you need to have knowledge and enough experience in doing the jobs your business is about to offer.

Dr. Yasser Mahgoub

ARCHITECTURE FIRM To start your own business: • Select a good place to house your operation.

• The design of your firm gives a good impression to your clients.

• Get the required equipment: computers, design software, printing equipment, drafting papers.

• Get your business permit: Engineering Syndicate, Tax ID. • Promote your business: A business card, Attractive Website, brochure.

Dr. Yasser Mahgoub

ARCHITECTURE FIRM • Maintain a close contact with your former colleagues and inform them that you are opening your own Architectural Firm Business.

• Identify Pricing Strategy: Because this business offers service & there are no raw materials or resources that require higher capital, you can always offer a better & lower price while you are starting your business. This helps a lot in building customer and gaining clients’ trust.

Dr. Yasser Mahgoub

ARCHITECTURE FIRM STRUCTURE • An architecture firm usually has at least one “principal”, a licensed architect who is the sole proprietor of the firm, or one who shares an ownership interest with the other architects in the firm (either as a partner in a partnership, or as a shareholder in a corporation).

• Sometimes the title of principal is limited to owners who hold a certain percentage of ownership interest in a firm, or it may be expanded to include anyone with a leadership role in a firm.

• Some firms may also use the title "principal‐in‐charge" which denotes an architect who oversees the firm's services in connection with a specific project.

Dr. Yasser Mahgoub

ARCHITECTURE FIRM STRUCTURE • Small firms with less than 5 people usually have no formal organizational structure, depending on the personal relationships of the principals and employees to organize the work.

• Medium‐sized firms with 5 to 50 employees are often organized departmentally in departments such as design, production, business development, and construction administration.

• Large firms of over 50 people may be organized departmentally, regionally, or in studios specializing in project types.

Dr. Yasser Mahgoub

HAVE A GOOD REASON FOR STARTING YOUR OWN FIRM Having a strong reason to go out on your own is a prerequisite, because the risks, effort, and initial financial investment can be significant.

Dr. Yasser Mahgoub

HAVE A GOOD REASON FOR STARTING YOUR OWN FIRM 1. Ability to realize one’s own goals and follow one’s own interest.

2. Greater ability to balance one’s personal and professional lives.

3. More direct relationship between effort and recognition for one’s professional accomplishments.

4. More direct relationship between effort and financial reward (the opportunity to make more money than is possible as an employee of someone else).

5. Greater control over one’s own destiny, design, and other issues of personal importance.

Dr. Yasser Mahgoub

HAVE A GOOD REASON FOR STARTING YOUR OWN FIRM 6. Survival during bad economic times.

7. Satisfaction of building one’s own practice.

8. Ability to be involved in everything.

9. Failure to “fit” into an established organization.

10. Desire to work with friends, a spouse, or others of one’s own choosing.

Dr. Yasser Mahgoub

KNOW THE TYPE OF FIRM YOU WANT • In clarifying the type of firm you want to have, and defining a path to get there, it can be very helpful to look at how other firms became successful.

• 10 common models can be used to launch a successful firm: • 1. Major client as “booster rocket” • The firm is founded or taken beyond the start‐up with the support of a single client willing to gamble on a young firm.

Most successful firms can trace their success back to one or two important early clients or projects.

• For architects, a rare variation on this is the firm that wins a major open competition.

Dr. Yasser Mahgoub

KNOW THE TYPE OF FIRM YOU WANT 2. House for mother For some new firms, the booster rocket comes in the form of a project for a family member.

3. Academic incubator Rely on teaching positions to provide principals with the basic income, time, credibility, and exposure to lay the foundations of a practice. Some even cut their academic ties when their practice becomes too demanding.

4. Finding a Need and Filling it (the Better mousetrap) Some firms see an unmet need and set out to fill it. For example focus on historic restoration, green architecture, etc‌ Dr. Yasser Mahgoub

KNOW THE TYPE OF FIRM YOU WANT 5. Supersalesperson Few firms got off the ground due in large part to the exceptional sales skills and client relationships of one or more of the founders 6. Sponsor Few firms have had other established professionals act as their booster rockets. Well‐known architects have lent their names and skills to young firms.

7. Golden handshake Sometimes the architect’s former employer provides the new firm’s initial work and sustains their start‐up.

Dr. Yasser Mahgoub

KNOW THE TYPE OF FIRM YOU WANT 8. Spin‐off This is among the most common models. Firms that break away from established ones where the new‐firm members have built their reputations, skills, and potential client base. In some cases, the spin‐offs are led by senior partners of major firms.

9. Rebuild of an existing firm The converse of the spin‐off is the takeover. In few cases, a new young leadership takes over a declining existing organization and revives and reshapes it into a new vibrant firm.

10. Starting small in a good market Some firms are content to begin by doing small projects and building on that base.

Dr. Yasser Mahgoub

STARTING YOUR OWN PRACTICE There are number of steps to take before you make the final decision: 1. Be clear as to why you are doing it.

2. Define the type of firm you want to have.

3. Set goals for the first year and for the long term.

4. Look at successful models and research how they succeeded.

5. Define what special services or abilities you will offer that potential clients need.

6. Decide if you have all the basic capabilities necessary to succeed, or if you will need partners.

7. Decide how you will support yourself until the firm is generating an adequate income to pay you.

Dr. Yasser Mahgoub