The (next) business plan

After an immense amount of work, you have an established and smooth-running practice that is a credit to your business and professional abilities. It is now time to revisit the whole process. You started by preparing a business plan – this should now be reviewed and the actual outcomes evaluated against the original vision. How was the performance? Were the objectives achieved? How will this inform the follow-up plan?

The SWOT analysis must be repeated – as it should already have been in the interim – and the process of establishing a new business plan begun. Several years into the practice’s life there should now be many more people – clients, planners, staff, users, etc. – whose opinions can be garnered, whether good, bad or indifferent. If possible, get an outside neutral person or body to carry out this study for you, and be prepared to face up to (and possibly share) and act on the results. Do not forget to take your own views into account.

Note: Specific key performance indicators (KPIs) for ‘client satisfaction – service’ are available from the Centre for Construction Innovation – see www.ccinw.com/kpizone.

The new business plan should take the results of your analysis into account, but it does not have to prostrate itself before them. You may wish to sharpen any new business objectives considerably and, for example, use the achievement of specific user satisfaction levels as a target to be reached within a defined time period. Developing a new plan may, in one way, be more difficult – it can be hard to plot a new direction when you also need to keep the business going day to day – but you will also come to it knowing what actions can be effective and where to concentrate your energy.

Remember that the best time to set off in a new direction will be when you are at your most successful. It is extremely difficult to manage this sort of change when the business is in the middle of a downturn or decline.

Forward planning

Planning, even for the relatively short term of a business plan, requires looking into the future and making predictions. If possible, approach this in a spirit of serious enquiry, and use one or more of the formal techniques available (see box). Alternatively, gain access to others’ research and analysis into prospects for the sectors you are most interested in. There are several consultancies that provide this as a commercial service or can carry out tailored studies on your behalf.

The results will be far from foolproof – future-gazing does not provide a great degree of certainty – but both they and the process of reaching them can help you to focus on issues that are not of immediate concern but may become so in the years ahead.

Architecture has a tendency to be a responsive profession – waiting for clients with building needs to come to it. The business of architecture, on the other hand, is likely to become increasingly entrepreneurial, and it is those who are willing to look forward and take informed risks who are most likely to succeed.

Practice positioning

Looking into the future, if nothing else, should have helped to suggest where you see the practice being within five to ten years’ time and how you want it to be perceived by clients, various communities of interest, your peers, etc. Backcasting in particular can suggest ways in which the practice could reposition itself and achieve a more positive and deliberate role and business outlook.

Getting to where you want to be should form an essential part of your new business plan, but it may take considerable commitment to establish a fresh or reworked identity. Fees may fall off as the practice repositions itself and focuses on winning new areas of business on its own terms. It is likely to require a degree of reskilling and retraining of partners/directors and staff so that they are able to work in a different sector or take a new approach.

Size and growth

The issue of how big a practice you want to run was raised in Stage 3, during the previous discussion on the business plan. As you evaluate the progress of the practice you will inevitably review this.

Many firms chose to stay at a size that they have discovered, possibly through trial and error, suits them, while others will grow and shrink to adapt to match the workload that they have at any one time. Growth can clearly bring many benefits, including a wider diversity of projects and opportunities for career advancement, but in an architecture practice, as with any other business, it brings its own problems and needs to be planned for. Structures and management styles that suited a smaller outfit may no longer work so well – staffing hierarchies may have to be established and new premises found. The economics of growth can be a harsh mistress and frequently drive a quest for further growth. The prospect of downsizing again in the event of a recession can also be daunting.

Some projects are now only available to practices over a certain size, either because clients are looking for the reassurance that size presents or because the pace and response times are such that only larger practices can provide the almost instant ability to allocate staff to projects, while bearing the risk that the project might never materialise. In addition, the size of practice that is ‘big enough’ to achieve this appears to be growing all the time and may always stay, elusively, beyond reach.

Staff progression

If you have staff, they will have career ambitions. This may lead to them moving on to gain experience elsewhere or to set up their own firm, possibly in competition with yours. This can mean the loss of considerable expertise and knowledge as well as the fracturing of a well-established team. At its worst they could also take clients and work with them. At its best it might be a long-awaited relief and provide openings for others in the firm.

Providing opportunities for advancement for talented staff can be a serious problem for practices and it often produces pressure for growth and expansion as well as a shift from a partnership to a company structure. Various ways can be used to recognise and encourage staff, including titles such as ‘associate’ or financial reward schemes, but these may be insufficient to prevent them moving on. Ensure this issue is openly discussed and strategies developed to deal with it if necessary.

Succession planning

A more advanced aspect of the staff progression problem is planning for the succession of the firm as partners and directors decide to retire or step into another role. This may involve passing the leadership baton to more junior members of the practice – with an agreement as to how the capital invested and built up might be released – or possibly even selling the firm to an external bidder. Inevitably, it is a process fraught with problems – the possibility of bruised egos and disintegration of the very asset that is being transferred with the loss of key staff. Take advice, address it over the long-term and possibly restructure the firm with an eventual succession in mind long before it becomes inevitable.