How to Start an Architecture Firm

Whatever your initial reasons, starting your own architecture business can be a very rewarding experience. You'll have the chance to flex your creative muscles, set your own hours, and be your own boss. To establish a firm, however, you’ll need industry experience and, most importantly, the finance required to get started. 

Raising finance for a business venture means approaching lenders for a loan facility. Most mainstream banks offer business loans, but few are tailored specifically to the needs of professional service businesses. Architects should therefore seek out specific professional finance loan assistance from brokers who can help negotiate on your behalf and, most importantly, identify the right lenders in your niche. 

If you’d like to work with a team that understands the process behind setting up an architect firm and the finance products you’ll need to make it a reality, get in touch today for a no-obligation chat. Otherwise, continue reading to discover more about setting up your business. 

Quick tips for starting an architecture business

• Define your niche. What type of architecture do you want your firm to specialize in? This will help you determine the kind of clients you want to work with and the type of projects you want to take on. Remember that this doesn’t have to be your current area of expertise – you can push your firm in a new direction provided you’re confident about winning clients. 
• Decide on a name early - if it includes ‘Architect’ you’ll need to have permission from the Arhcitects Registration Board (ARB) to register the name with Companies House. 
• Develop a business plan that accounts for your costs and projected profits. This will help you map out your business goals and strategies for achieving them. A business plan is also an essential part of your finance application and all lenders will want to see it before approving any loan.. 
• Build a strong team. Surround yourself with talented and experienced professionals who share your vision for the firm. You may even bring in other partners who have an ownership stake, which will reduce your capital investment but also limit the level of control you have. 
• Market your firm. Get your name out there by networking, attending industry events, and creating marketing materials that showcase your work. Marketing costs are an overhead you can easily overlook if you’ve never owned your own practice, so make sure you account for this.

Insurance is essential 

As a practising architect, you may be aware that ongoing liability for projects can fall on the firm that designed them. As a firm owner, you’ll need professional indemnity insurance to cover you. New projects you start when the firm is live will leave you liable for six years, so make sure you factor the rising costs of indemnity insurance into your planning. 

Get your documentation together

All architects need to have standard documents prepared for when they launch their practice. These include your Terms of Engagement, which you can treat as a template and then tweak it to be different from project to project, as well as a complaints procedure process

Consider your team

Before you write your business plan, you’ll need an idea of who is going to work for the firm. If you’re starting solo, you’ll face a steep uphill climb but will also avoid having to pay for salaries and other overheads. If you’re recruiting a team, you’ll need to ensure they have the right credentials and experience to win client confidence – which is crucial when you’re an unknown entity in the market.

You may also consider whether you wish to attract ‘partner’ investments to senior employees that allow them to buy into the business, reducing your overall investment but also lowering your ownership ratio. 

Write a business plan 

Your business plan will help you define your future and will also be critical to winning favourable terms from lenders. The plan must include your own experience, your vision for the business, your plan for building a team and financial projections. It should also address marketing activity, competitors and regionality. 

Your business plan’s ‘executive summary’ appears at the start but should be written last. This summarises all of the other parts of the plan, so it’s only really possible to write it once you’ve done the other sections. 

Suggested business plan structure for an architect firm 

1. Executive summary

This will summarise the points you make below and will be written last. It acts as an overview to allow anyone looking at your plan to get a quick ‘at a glance’ impression of your business. It must be engaging and convincing as some readers will make an immediate decision based on the information contained in your summary. 

2. Company analysis

What sort of architecture firm do you intend to start? Will you specialise in residential or commercial projects? Do you have other niche ideas in mind, such as historical architecture or net zero infrastructure designs? 

3. Industry & customer analysis

Your business plan must show an assessment of the current state of your industry and how your business will exist within it. Are there opportunities in sectors you want to specialise in? The UK construction industry continues to grow, so architects remain in demand, provided you address recent developments such as the Building Safety Act and Net Zero Construction. You should factor in all trends and growth forecasts you can find over the next 5-10 years to show that your business plan is robust and built to last. 

4. Competitors

Detail all of the customer types you expect to serve in your plan, identifying any specific demographics or behaviours that will affect how you market and work with them. For example, an architect working directly with a construction manufacturer will have different considerations than an architect working with a social housing group. 

5. Operational structure

You’ll need to identify the structure of the business and the employee workforce you intend to employ. You’ll need to choose a business structure, which is commonly an LLP for architects but can also be a standard limited business. You’ll then need to list directors and Senior Principal architects as well as partners, designers and project managers.
6. Marketing

As an architect, you may have never considered marketing – but as a business owner, it’s crucial. Your marketing plan should outline the ways you’ll reach customers and how you’ll sell your services. Try digital strategies like SEO and social media to inject fresh energy into your field and attract digitally-focused customers. 

7. Financial plan

No business can exist without the right finance plan behind it. Not only will you need to plan for costs such as office equipment and employee salaries, but you’ll also need to consider added overheads such as insurances and leases. A financial plan should include an income statement, balance sheet and cash flow statement – although many of these will be projected since you haven’t started your firm yet. 

Due to the strict importance of your financial plan for securing lender support, you should use an accountant or business planning expert to help you put it together. 

Becoming a RIBA chartered practice 

You may already be a RIBA member, but having a RIBA chartered practice will help you win more clients and access more opportunities. To have one, you as the Principal/Director must be a RIBA chartered member, with at least 1 in 8 staff being chartered too. All architectural work must be supervised by a RIBA chartered member, and your practice must commit to RIBA’s standards outlined here. 

Applying for finance

Once you’ve created a business plan, you’ll have a better idea of how much cash you’ll need to start your firm. Even with a rise in remote working and a decline in physical offices, you’re still facing significant costs that most architects won’t simply have sitting in their bank accounts. 

Instead, you’ll need to approach lenders for business loans. What type of loan facility you take on and what terms/rates you are offered can vary heavily, which is why we always recommend working with a team like our own – here at Rangewell, we act on your behalf to identify the best of the lender’s market, tailor your application and negotiate your terms to help make your application successful. 

If you’re planning to be the sole Director of the firm, you’ll need to apply for a significant loan that will cover all of your costs – with all lenders making their decision based on your experience, business plan and their own independent verification of value/risk.

If you instead choose to build a team of partners, each can receive their own finance, which can be combined to use for the business – but terms may not be as favourable as they would to an experienced sole owner. 

If you’re planning to build your premises from scratch, you’ll need a special type of finance…

Development finance for new architect offices

If you intend to build office space or convert an existing property into an office, you’ll need to apply for development finance. This is a specific product offered by lenders that has different requirements around your capital stack and repayment plan. Many of these loans are secured against the value of the finished project and demand to be repaid first above any other funders you have on board. 

Development finance is a complex matter, so it’s best to have a solicitor on your side who understands the legality of UK development practices. In addition, our team at Rangewell can help you understand the entire process, find the right lender and secure both development finance and any ongoing business finance that you require to get your architect practice up and running. 

Buying or selling a practice

If you’d rather circumvent the steps involved in starting from scratch, you could always purchase an existing practice. Many architectural firms are sold “in-house” by an exiting Principal passing the firm to younger Partners, so approach your own Principal if you want to take over. You’ll still need specific finance to fund the purchase, so read our full guide to buying an architect practice here. 

If you want to sell a firm for any reason, we’ve also got a full guide to selling architecture practices here on our site. 

Get your practice underway with Rangewell

Starting anything from the ground up is difficult – but in an industry that’s as heavily skewed around reputation and regulation as architecture, it can be even more challenging. Outside of buying an existing firm, you’ll need to work hard to get your practice’s business plan into a convincing state and then use it to win the interest of lenders. 

With the right lender on your side, your dream can become a reality. Leverage our team at Rangewell in a no-obligation, no-hassle consultation where we’ll help guide you through the financing side of the professional service world. Before you can design the buildings of the future, we’ll help you design a better plan for financing your new practice.