Playing with the big boys now
For the sake of all my brother and sister architects who work in sad companies where they don’t value your ideas, and where you don’t get the freedom to work in your slippers several days a week, I’ve been chronicling the process we’ve been going through to start up Boiled Architecture. Perhaps we’ll inspire a few entrepreneurs.
Here’s an update: There is a pattern to startup costs, which varies from industry to industry. In professional services, the cash outlay begins quite modestly (see this entry about our initial costs to put out our shingle).
The fun thing is that once you get projects, you go through a dip where your cash outlay grows much larger but you haven’t started getting paid by the clients yet. You have to be a legitimate enterprise to play the game.
Initially, we had to pay for a website and some basic marketing things like business cards and networking events, as well as the legal fees related to incorporating and filing papers here/there/everywhere.
Now, we also had to pay for these things:
- Computers (Laptops because we’re a virtual office) - $2200 each (including tax, warranty)
- Software - (Still investigating which version to pick) ~$5k each
- Insurance: Professional liability + General + Worker’s compensation - $3700
- Legal fees for employee contracts ~$2500
- Payroll - depends
Not only do you have to have enough cash to get through the period between starting a project and getting paid by the client, but you also have the fixed overhead issue.
In other words, you have to carry insurance, computer(s), and software whether you have one project or ten projects. If you have ten projects, obviously you’ll need more computers and software licenses. But you can never have fewer than one.
There is a minimum amount of cost that it takes simply to have a company.
[Interestingly, I recently met a designer, who works for himself, who rejects the idea that you have to have professional liability insurance. I lack his courage.]
That means that once you start, you better hustle to get several projects up and running as soon as possible.
The great news is we have two projects. Woot!
On one of those projects, we work directly for the contractor, helping them model concrete pours for a highrise. This is exactly the kind of progressive, collaborative work we set our sights on. Architects and builders unite!
No more straddling the day job and the new venture; we are full steam ahead. We’re playing with the big boys now.
