Looking to establish your own architect firm? Setting up your own architect firm from scratch is an exciting and challenging journey.
Studies show that 44 percent of startups fail in the fourth year, which necessitates the formulation of a sound business strategy to ensure your architect business is a success.
The importance of professional liability insurance
With growing expectations from customers and increasing competition, professional negligence lawsuits are a painful reality in the industry. A survey reveals the cost of defending can be anywhere between $100,000 and $500,000, not to mention the downtime and loss of reputation that a startup can least afford.
Professional liability insurance provides financial protection against malpractice lawsuits.
The insurance covers the costs related to judgment, settlement, and legal fees that enables you to bounce back in the event of a setback.
Three tips for setting up your architect firm
Prepare a strategic business plan: The first step is to prepare a strategic plan with details on all aspects of setting up and running your architect business. This includes details on the business structure, how you plan to obtain funding, how many staff you will employ and manage, the kind of projects you will handle, market research, marketing strategy, and potential clients.
Secure funding: Cash flow problems are the second leading cause of startup failure as per a Small Business Trends survey. Factor in both the capital costs and running costs for your startup and plan in detail how and when you will be able to break even or make a profit.
Get listed: Industry-specific business listing helps you promote your architect firm while helping you reach out to targeted customers. Research for niche specific listing sites in your area apart from finding out if you can register as Local Business Enterprise (LBE) in your city. When listed as LBE, you can also find out if any upcoming contracts are city-funded that you can bid for.
Mansfield, M. ( 2019). Startup Statistics – The Numbers You Need To Know. Available at https://smallbiztrends.com/2019/03/startup-statistics-small-business.htm
Smith, J. (2019). Negligence case against an architect. Available at https://www.mks-law.com/business-law/negligence-case-against-an-architect-2014/
Anderson, L. How to Start Your Own Architecture Firm: 15 Tips From the Pros. Available at https://architizer.com/blog/inspiration/industry/how-to-start-your-own-firm/
Insurance Journal. (2019). Lawyers Professional Liability Insurance Claims Grow in Severity, Complexity, Cost. Available athttps://www.insurancejournal.com/news/national/2019/05/31/527978.htm