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Showing posts from January, 2020

ARE Practice and Business Content

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When taking the Architectural Registration Exam (ARE), I often wondered why it included content that I felt was more relevant to business and out of place on an exam for licensing architects.  Over time, it became clear to me that it all goes back to the architect's duty to the health, safety, and welfare of the public through licensure.  The health of a business is crucial in any instance, but it is even more important to keep an architectural business healthy. Not to negate the work of other businesses and the importance of what they do, but an architect takes on some pretty hefty work. Architects shoulder a heavy responsibility, which is not always immediately apparent in schooling and training, and one that should not be taken lightly. The best explanation I have heard was by comparing architecture with medicine. The backstory was the question of why architects have to go through such rigorous schooling, training, licensure, and exams that are comparable with tho...

Practice Management: Top-Down and Bottom-Up Budgets

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Budgeting and contracts are nothing short of an artform when applying them to the practice of architecture. They are always trying to hit a moving target-you never know what the outcome will be.  With budgets, the moving target is the work needed to perform the services and allocating them in order to make a profit. In the following example, we are looking at the budgets for an architectural firm's services.  Referencing the example above, top-down budgets start with the estimated cost of construction and the allocation of the architect's fee from a percentage of estimated construction costs (note that this assumes that the architect's contract is based on a percentage of construction costs for their service fee). That gross fee then subtracts the consultant's fees (per the B101-2017 contract, the architect's services includes consultants: structural, mechanical, and electrical engineers) in order to produce a net service revenue. The net service revenu...