MANIC MONDAY: STARTUP FIRM COSTS
In November of 2014 I officially went out on my own and opened Rogue Architecture. Prior to that I was operating as r | one studio architecture, which was just a name for moonlighting. I say this to illustrate what has been a process that has taken nearly 5 years to realize and I wanted to share my own experience with opening a firm and what I think are the essential costs to hanging your own shingle. When I started seriously planning and executing this business I looked all over the place for basic “how to” and what came up were the usual suspects – The Lean Startup, The $100 Startup, Rich Dad Poor Dad, etc. The resources are seemingly endless and, if you’re not careful, you could easily spend several hundred dollars before you even figure out what your company name will be. This is not a good way to start a business. Looking back I want to talk about just 4 expenses that I had to make in order to get up and running.
Public Service Announcement: This is based on my own personal experience and is by no means exhaustive or all inclusive of everything that needs to be done or acquired to start a business.
First I think I have to point out some expenses that I did not have because I had made them some time prior to starting my business.
A good computer: This is essential for any architect. I was lucky and found a pre-owned iMac 27″ all-in-one computer with all the goodies – fast processor, loads of ram and a ridiculously huge hard drive – for less than $800. It would have cost me more than $1700 new, so I got a great deal.
A good printer: Again, essential for any architect. You’ll actually see this listed in my startup expenses because the first printer I bought was only 8.5 x 14. It was $120 new and was really more for the house in general.
I was also fortunate to already have most of the software that I needed and a place in my dining room to at least get things kicked off. If you don’t have the above items, you will need them and they will be part of your startup costs. I suggest getting at least these things before you even think about starting a architecture firm. Most of us already do.
So, I’ve got a computer, a printer, software and a desk. I’m ready to make the big leap into the world of self-employed architect. What are the hard expenses that I simply can’t do without to get things moving?
1. Business Structure: You need to figure out what kind of business structure you’re going to have (incporporation, llc, dba, etc.) and file the appropriate paperwork with your state and federal gov’t. My advice is an LLC. It’s the simplest for small firms, especially if it’s just you, and takes about 25 minutes to complete. I think I actually did mine faster than that, but then I type really really fast. This really has to be your first step. You need to separate yourself from your business as early as possible. Total cost of filing articles of incorporation and getting a tax ID number was less than $100 and took less than an hour total.
2. Business Cards: Aside from my computer and software, this was the most important purchase I made when starting my business. There are literally hundreds of sites that offer design templates and printing services. I use MOO.com. For the quality of their product you can’t beat their price and their web interface is incredibly user friendly. I highly recommend them and have used them for years. I designed my own cards, including colors, and I constantly am complemented on them when I hand them out. Make sure you give all of them away to everyone you meet. The most expensive business card is the one you don’t give away. Remember that. Cost of 100 cards from moo.com, including shipping, was less than $50. I’ll be ordering 100 more once I publish this post.
3. Professional Website: This may not seem like a necessity compared to some other expenses like hardware and software, but not having an online presence will make your marketing efforts a nightmare. I started out trying to build my own and if you’ve followed this blog for a while you know my old site ronestudio.wordpress.com was a free blog set up through wordpress. It worked for a while, but wasn’t a professional site and was a little difficult to navigate. So, for the new site I hired a local web designer (a friend) and asked her to design my logo and site with blog. What you see here is her work, which I praise constantly. I’ve already made my money back from the feedback I’ve gotten from clients who will, of course, send others to the site as well. All told it cost about $400.
4. A Better Printer: I needed a 11×17 printer. Simple fact – it is too expensive to rely on printing companies for check sets. So I found a Epson wireless printer that will print, scan, fax and copy up to 13×19 (A3). It cost about $250 with paper and ink is fairly inexpensive so I won’t have to worry about huge costs moving forward. It has already made life so much nicer.
Where does that put us? To get my firm up and running and legit I spent about $1,400 on hard expenses. I have a company structure that will protect my personal assets (to a degree) if the need arises, marketing materials and a web presence and a printer/scanner for the day to day stuff. Notice I’m not counting the commercial office space I am right now sitting in while I type this post. That’s because we’re talking about the essentials. When I started I knew I needed to get a steady stream of work lined up before I thought about an office. So I worked out of my dining room until last week. I could have done it longer, but the timing was right and so I did it.
The long and short of this story is you do not need a lot of money to start your own architecture firm. The bulk of what you need is probably already in your home or apartment and the rest is found between your ears – your own talent and drive to succeed. So get out there. Start a business. Help to build a better world one small project at a time.
Image taken from zanebenefits.com under creative commons license.