An Effective Architectural - Business Plan Example

Architectural Business Plan (Name) (College) (Instructor) (Course) Architectural Business Plan Introduction A business plan, in the real sense, is a road map which guides and directs the company towards a specific direction of business operations. In architecture, it is also vital in the sense that it would lay out how various architectural goals would be approached for purposes of improvement. An effective architectural business plan would consider both operational and improvement aspects of the business. In this regard, this report presents a business plan which would be used to capture the future markets in five years’ time by considering the current challenges in the business as well as the anticipated needs of clients. Executive summary This business report is about an Architectural firm which deals specifically with industrial, residential and commercial architecture operating in both international and domestic projects. In this company, improved and state-of-art technological tools are normally used to research, design, analyze, develop and manage various architectural projects in order to achieve increased customer value. This would ensure increased reliability and integrity in various architectural processes. In this plan, the target customers, in the two broad markets are grouped into four distinct classes: contractors, home owners, and government and home owners. This one is an improved approach which would ensure satisfactory services compared with various competitors which have a general view on their clients. Therefore to gain a competitive edge, the company would focus on digital- based architectural designs as well as an exceptional customer services. These two business backbone are based on the research findings that showed numerous limitations with old design method and tools. Moreover in this plan, it is prospected that the first year’s sales would be $ 200,000. This value would then increase to $800,000 by the end of the fifth operational year. These values were set based on reality aspect of a strategic business plan since the firm is still young in the market. Mission In order to achieve the best in the architectural market, this firm would introduce and offer a new type of architectural digital system which would solve the complexities associated with clients’ perceptions on architectural firms thus winning their confidence in quality service delivery (Michael and Miles, 2009). In this system, the client would be allowed to interactively view, understand and appreciate the proposed designs, construction methods and the final look of the structure. In this media, clients would not necessarily have to know and understand the various architectural terminologies like elevations, floor plans, sections and construction documents among others. Instead, clients would understand the aspects through its interactive computer aided graphics and videos. In addition, this media would be useful in construction documents and processes thus ensuring quality assurance amongst the company professionals since it would provide builders with interactive quality images and required specs in each aspect of the structure (Michael and Miles, 2009). Keys to Success The business success of this architectural company would be based on 1. Provision of architectural services that are more powerful than the competitors 2. Incorporation and utilization of varied classes and types of architects so as to provide diverse variety of designs 3. Increased network on global business connections (SMART Goals, 2010) This is due to the research findings which identified competitors, poor mix of architects and global business network being the main draw backs on architectural businesses. Objectives 1. To realize sales of $ 200,000 in year one and $800,000 by the end of the fifth year 2. To expand the market by 25% every year through internet technology 3. To create and establish a new market niche by year five through the use of interactive architectural system and three dimensional architectural documents (SMART Goals, 2010). Company Summary In this architectural business plan, the company would provide architectural design services through the use of digital media. This approach would limit majority of services within the technological requirements. Consequently, there would be optimal efficiency in business operations as well as improved construction methods, design processes and satisfaction to the clients. Company ownership This architectural firm is owned by key project developers whose main aim is to move the company to higher levels of performance. Services The architectural services covered in this plan would integrate well with various small or land corporations. In addition, these services would be made affordable for various types of clients falling within the middle or upper income classes. This implies that clients would be treated on different scales depending on their socioeconomic classes (Michael and Miles, 2009). Description of Service In order to strategically differentiate the services, this business plan recommends the use of super speed computers with installed architectural programs like AutoCAD and Form-Z. These would allow efficient provision of the new interactive media. In addition, the business would be kept on the market forefront through intensive and extensive on market and technologies on three-D designs (Michael and Miles, 2009). Market Analysis Summery This business plan considers both the domestic and international markets within which the business would operate. Even if the business covers and deals with numerous clients, a close analysis and understanding of these clients would be based on the trends in sales as well as other customer experience data within the first months of business operations (BPlans, 2010). Market segmentation Following the four categories of clients in this business, the table as well as the comparative bar graph below shows the anticipated proportions of clients for the next five years. This information catered for the yearly 25% market expansion and based on the past customer findings. As can be seen, home owners take the greatest market share; the business would concentrate both on promotional and marketing efforts towards them (Berry, 2011). Same efforts on the remaining categories of clients would highly depend on creation of meaningful rapport and proper proposal responses and treatment. In this data, the yearly growth prospect is 25%. Potential customer Year 1 Year 2 Year 3 Year 4 Year 5 Yearly Growth Home owners 200,000 250,000 312,500 390,625 488,281 25% Developers 7,000 8,750 10,937 13,672 17,090 25% Government 20,000 25,000 31,250 39,063 48,828 25% Contractors 5000 6,250 7,812 9,766 12,207 25% Total 232,000 290,000 362,499 453,126 566,406 25% Service Business Analysis The business throughout the country basically comprises small to mid-sized companies specializing in a given type of architectural service. However, there is also existence of large companies which often focus on the design of large facilities used for industrial or commercial purposes. According to BPlans (2010), this business would face competition from large firms since such architectural firms have the capital base for maintaining and catching up with the latest technologies in the business. In addition, it is the competitors firms which have extended business operations even to the international community. In both cases, home owners would be given closer attention compared to the rest of customer categories. Sales strategy With exceptional services offered to clients, it is expected that the business would realize good sales. To achieve such sales, the business should have a good public image as well as referrals. In getting good base for referrals, the business would focus on giving her services, in a pleasing manner, to as many clients as possible. In this regard, the architects as well as the management team would strive to deliver positive customer experience which would help the firm get more fame (Berry, 2011). In addition, this would make the firm have good customer relationship; a fact that makes clients come back for more services in the future as well as refers other new customers to the firm (Berry, 2011). It is anticipated that the monthly sales of the business; in the first year of plan implementation, would translate as in the table below and analyzed as in the grouped bar graph below. Forecasted Monthly Sales ($) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Design 8000 1000 5000 1000 9000 5000 2000 13000 2000 1000 5000 2000 Production 2000 5000 2000 2000 2000 3000 7000 3000 1000 9000 1000 2000 Construction Documents 1000 1100 7000 1000 5000 2000 1000 1000 9000 3000 3000 11000 These sales prospects are balanced following the experienced trends in the commercials and industrial activities within the country and beyond. Form the research findings this shows typical realizable sales with balanced efforts in each group of architectural services offered. This table translates to the graph below. Monthly Sales (First Year) Yearly Sales Forecasts According to the architectural services offered, sales are classified into three main categories. These are design sales, production sales and construction sales. So when they are combined, they serve one architectural service. Since there would be construction costs in every architectural work, the total sales for each sale would be based on 10% cut off costs (Berry, 2011). On yearly sales performance, the following table and graph gives a summery on the forecasted total sales. However, the actual sales would vary depending on the size the budget of the project. Year 1 Year 2 Year 3 Year 4 Year 5 Design $200,000,000 $250,000,000 $312,500,000 $390,625,000 $48,828 ,000 Production $7,000,000 $8,750,000 $10,937,000 $13,672,000 $17,090,000 Construction $20,000,000 $25,000,000 $31,250,000 $39,063,000 $48,828,000 Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5 Design 2,000 2,000 3,125 3,125 4,882 Production 700 750 930 930 1,020 Construction 2,000 2,500 2,500 3,000 3,000 Competitive Edge This business plan would enable the firm have a competitive advantage over small firms, middle firms as well as large architectural firms. This is because; the business would involve rich mix of current architects who are computer efficient to deliver the current digital architectural solutions. So it would be different from most firms who still recruit old architects who cannot easily deliver 3-D solutions with a computer (Chief Architect, 2010). In the initial stages of implementation, the business would start with single AutoCAD alongside hiring of more architects as the business grows. For better compatibility of existing employees, the plan recommends that the company cater for the cost of training them externally as well as improve on-sight trainings and workshops. This would make employees face minimal challenges with the new digital system upon which the business relies on for better competitiveness (Stamatis, Georgi & Stephan) Personnel Plan The following table shows the forecasted personnel expenditures for the five years business plan. Year 1 Year 2 Year 3 Year 4 Year 5 Chief Developers (Architects) $20,000 $36,000 $52,000 $70,000 $95,000 Clerical $15,000 $30,000 $45,000 $65,000 $85,000 Architectural System $40,000 $75,000 $110,000 $145,000 $180,000 Total people 6 8 12 15 20 Total Payroll $75,000 $141,000 $207,000 $280,000 $350,000 Financial Plan This business plan would focus on business growth as well as technology. In this regard, cash flows are expected to be increased as the business sails through the five years’ plan. On the other hand, some money would be set aside for consulting purposes (BPlans, 2011). Key Financial Indicators It is expected that the business would realize a constant gross margins over the five years’ business period. However, sales, inventory turnover and operating expenses are expected to increase proportionately while debt collection days are expected to reduce as the business sails through the five years’ plan. Projected profits and Losses With the climbing number of yearly customers, sales and Cashflows as well as fixed direct costs on architectural services offered, as shown in the previous parts of this plan, the business is expected to realize increasing profits with minimal losses. Initially, there may be less profit but as the plan gears up, the business projected Cashflows would be achieved (BPlans, 2011). These would be reflected better in the business balance sheet as well as profit and loss accounts. Business Assessment There would be adoption of various assessment tools so as to expose the emerging business risks and opportunities for future expansions. Risk Assessment- This tool would help the business analyze its architectural market, business, finance, products or services and any risks associated with the plan’s execution. Form this step; the firm would be bale to set desirable benchmarks which would best counteract the emerging challenges for effective realization of the plan targets (Ashley, 2010). Growth Assessment- In order to realize the 25% yearly business growth, the business would consider the growth strategy which would ensure that the human, innovation and marketing quotients of the business operation areas are well taken care of hence leading to increased profits margins (Ashley, 2010). Better Business Bureau Rating- For both national and international rating, the business would strive towards attaining the BBB rating. In this regard, the business would ensure that its operation periods are shortened, posses the competency licenses, advertise its services, reduce the complaint volume, honor commitments and adequate provision of information for BBB rating (Ashley, 2010). Employee Incentive Plan In this plan, employees would be given incentives to encourage them on quality work. This would be done based on the analysis on sales, commissions and internal roles in the architectural projects. The criteria used in this plan would avoid consecutive issuance of presents to the same employee, would be based on fair list of criteria, would alternate monthly incentives and would encourage comments from the employees on how to improve the business as well as incentive program (Daniels, 2002). This would ensure that the business realize higher employee retention thus assured of continuous delivery of quality services within the plan. Conclusion Since the future business relies more on technology, it is equally imperative to focus more on current technologies which would improve customer satisfaction with increased quality assurance. In this regard, this plan considers company operational aspects, employee, business processes, market and other related business factors which would be brought together to realize increased performance and business growth. References Ashley, S. (2010). Business Assessment Criteria. Retrieved April 4, 2011, from http://www.ehow.com/facts_7579214_business-assessment-criteria.html Berry, T. (2011). A Standard Business Plan Outline. Retrieved April 4, 2011, from http://articles.bplans.com/writing-a-business-plan/a-standard-business-plan-outline/29 BPlans (2011) Architecture Business Plan. Retrieved April 4, 2011, from http://www.bplans.com/architecture_firm_business_plan/executive_summary_fc.cfm Chief Architect (2010). Professional 3D Home Design Software. Retrieved April 4, 2011, from http://www.chiefarchitect.com/ Daniels, C. A. (2002). Entrepreneur. Choosing an Employee Incentive plan. Retrieved April 4, 2011, from http://www.entrepreneur.com/humanresources/employeemanagementcolumnistdavidjavitch/article54952.html Michael, F. and Miles, K. (2009). INTERACTIVE ARCHITECTURE. Princeton Architectural Press. Stamatis, V., Georgi K. & Stephan Wong. Architectural challenges. MPEG-4 and the New Multimedia Architectural Challenges. Netherlands GA Delft; Read More