The likes of Foster & Partners and BDP might dominate the industry press, but it’s actually thousands of sole practitioner and boutique studios dotted across the country that form the bedrock of the UK’s architectural profession.
According to research from the Architects Council of Europe (ACE), more than 4,250 of the UK’s 7,000 or so architectural practices comprise of a single practitioner. So if you want to stretch your creative muscles and become an entrepreneur, building your own business is achievable.
But what does it take to go solo? Well for one thing, alongside a (hopefully) bigger share of profits come vital responsibilities: not least, finding work — and keeping everyone satisfied, including clients, staff, and the tax man.
Here are our tips on how to ensure your architectural start-up begins with the firmest possible foundations.
Check your contract
As a salaried architect, it’s easy to feel like your work is your own, and not the company’s. So, when you start out on your own, naturally you want to take advantage of the contacts you’ve already made. However, be sure to double-check your contract because you may find the following:
- A non-solicitation clause: restricting you from taking clients elsewhere.
- A non-compete clause: restricts you leaving to work for a competitor of your current employer — or, crucially, to set up your own competing business.
- A non-poaching clause: to avoid you taking colleagues with you when you leave.
If your plans could fall foul of your contractual restrictions, it’s worth taking advice from an employment law solicitor at an early stage. While they shouldn’t be ignored, these types of clauses could still be challenged — as they might be too restrictive to be enforceable.
The right legal advice should give you a firm idea of what is and isn’t doable, letting you plan accordingly and avoid disputes in future.
Step one to designing your business: the plan
Think of the business plan as your new firm’s first ever blueprint. This document keeps you on track as you piece your practice together — and is useful to reference when convincing partners, investors (and even clients) to join your team.
Key areas to cover include the following:
- Services offered: it’s worth considering your own areas of expertise, personal areas of interest – alongside, crucially, any gaps in the market you intend to make your unique selling point (USP).
- Aims and objectives: is this business going to be your pride and joy — or do you see yourself selling it after a few years? Are you aiming for a global presence? Every plan deserves a description of where your company’s future is heading, and how you’ll achieve this.
- Capacity and size: what level of project do you intend to take on? What level of resources (particularly human resources) will you require? This assessment is valuable to determine how much staff you need.
- Distinctiveness: to get noticed, every business needs an identity, so it’s worth giving your firm a name from the start.
Premises and equipment
To keep costs down, and if you have space, there’s a lot to be said for operating from home in the very earliest stages. If a home office works for you, take a closer look at mail forwarding and virtual office facilities (a great way of drawing a line between ‘business’ and ‘personal’).
For a small but growing architectural practice, collaborative workspaces can also be ideal. These are usually fully-serviced, so you have the certainty of a fixed usage fee each month. These tend to be ‘pay-per-desk’ arrangements and it’s usually possible to scale up when more space is needed. If other firms operate out of the same building (e.g. designers and engineers), this can also be great for networking.
To keep initial spending at a minimum, check whether leasing equipment is more cost effective than buying outright. CAD modelling software is a good example: where four-figure price tags are standard for a basic outright ownership licence. However, with a subscription (“Software-as-a-Service”) arrangement, you pay a per-user fee each month or year — and upgrades are included automatically, which is a more startup-friendly model.
When you go it alone, you’re essentially the accounts manager, HR manager and operations manager rolled into one. Admin-wise, here’s what to focus on at the beginning:
- Tax self assessment: as a director, partner or sole trader, you need to register for Income Tax self assessment.
- VAT: where annual turnover is expected to exceed the VAT threshold (currently £85,000), you will need to register your business for VAT with HMRC.
- Taking on staff: when you hire your first employee, you’ll need to register as an employee and get a login for PAYE online.
- Registration renewal: don’t forget to notify the ARB of your new regular business address (this can be done online here). It’s especially important to ensure any notifications concerning your annual registration renewal are received.
- Professional indemnity insurance: sometimes, mistakes are unavoidable. To protect both you and your clients, the ARB requires that you have insurance in place. The ARB’s PII Guidance hub is a useful starting point for sourcing a provider.
- RIBA Chartered Practice Membership: obtaining Chartered Practice accreditation isn’t mandatory – but it’s highly advisable from a marketing point of view: not least, because it enables you to get listed on the RIBA ‘Find an Architect’ directory.
Choice of business structure
You don’t have to set up a separate legal structure for your business — you could simply trade as a sole trader. This means that there’s no legal distinction between you and your business.
That said, even for very small architectural practices, setting up a limited company is still often a better option. It’s a straightforward way to formalise the rights and responsibilities of multiple people involved in the practice — and it gives the business a level of professionalism, helping you win more work.
Even if you don’t intend to operate under the company right now, you can very easily set up a company and keep it ‘dormant,’ even if it’s just to reserve your company name.
If you’re interested in setting up as a limited company, we’re on hand to help. We’ll ensure you get the right business structure for your company — in addition to helping you set up a registered office, mail forwarding, and much more. For a hassle-free set up and all the support you need, head over to our formation packages page to discover what options are available.