Enterprise Clinic: The architecture entrepreneur

| March 1, 2013 - 13.04UTC
Entrepreneur-cropped

In the second of our Enterprise Clinics, where we enlist industry experts to help a budding business get off the ground, we focus on an architect with grand plans…

Our entrepreneur: Fwaz Bisher Abdulkarim
Bio: Age: 33 Education: Studied Architecture at Jomo Kenyatta University of Agriculture and Technology (1999-2005). Masters in Construction Management from the University of Nairobi (2010-2012) Current employment: Architect at Mutiso Menezes International
Business plan: To start my own architecture firm, alone or with others, to provide reliable, high-quality architectural services

“I want my architecture business to provide technically effective, innovative and sustainable design solutions to individuals and businesses. My unique selling point will be the provision of reliable services while offering unique ideas, timely delivery and cost-effective project management, all backed up by excellent academic credentials and industry experience. I will compete by providing the best advice from the word go, understanding client needs and responding with innovation and creativity. I will make the best use of new tools and technology to offer sustainable ideas, and will provide reliable project management solutions.”

Problems:
Lack of finances. I have the confidence, and the academic and professional qualifications, but need start-up funds: I estimate that I need Ksh 3-5 million for a reliable office.

Our Expert Panel:
Mwongera Rukaria – Executive Officer from the Board of Registration of Architects and Quantity Surveyors of Kenya (BORAQS; www.boraqs.or.ke)
Joel Macharia – Editor-in-Chief, CEO and founder of pesatalk.com; finance and technical consultant
Chris Wahome – Managing Principal, Dexdign Architects & Interior Designers (www.dexdign.com)

Is this a good time to start a business, in light of the elections and possible government transition?
Joel Given the uncertainty, people may hold off on new developments until they are sure there will not be a repeat of the 2007
violence. On the flipside, there is an opportunity to build relationships and get a better understanding of clients’ needs with-out the pressure to get started immediately.
Mwongera The upcoming elections are hoped to be peaceful – I expect developers to continue with their projects.
Chris There is never a good time to start a business. If it’s not elections, it’s the referendum; if it’s not the referendum, it’s interest rates; if it’s not interest rates, it’s the university strikes… Take a bold but calculated step. First and foremost, do you have the entrepreneurial spirit? The entrepreneur IS the business – its founder, its motivator, its drive. You need the traits of an entrepreneur or you will be in for a nasty surprise: failure.

What are the challenges facing architectural firms right now?
Joel The change in government may result in fragmented property and development laws, and taxes that will make construction in different counties a challenge. Also, the growth rate of the upper-middle property sector in Nairobi – a favourite of developers – seems to be slowing. The lower end of the market does not favour premium professional services.
Mwongera In general, the public considers architect services to be expensive. However, by not using a registered professional, they compromise on quality, which can result in horrible design and even loss of life.
Chris The same challenges you’d find in any other business: competition, marketing, finances and human capital.

Are there investors willing to finance start-up architectural companies?
Joel  Yes, but they may require some looking for. Angel investors are investors that put money into a start-up for more than the promise of financial reward – maybe they’re seeking the thrill of a new entity, or feel the need to give back to society. Possible angel investors might be architects that have built their companies or real estate developers. However, they may require a substantial
stake in your business in exchange for taking on the risk of funding you, and may insist on having a say in how the business is run.
A simple solution is to land a client and use them to start up the firm. This would require keeping your costs as low as possible – ‘bootstrapping’ – and growing the firm organically. Oftentimes, the need for start-up financing is to protect the founder from the hard work that will be required.
Mwongera Some foreigners wishing to practise will partner with registered local architects. However, the local must own majority shares in the firm.
Chris Don’t use a start-up loan. Put some money aside, buy a bit of equipment, and start climbing the tree from the bottom. Then let your business grow itself. Remember: even if you have a job it takes time to get paid.

Is Ksh 3-5 million a reasonable start-up estimate?
Joel Start-up costs should cover the business till the point it reaches break even. These costs may include rent, salaries and marketing. Ksh 3-5 million is too much: it can run a three-person start-up with average salaries of Ksh 120,000 a month and expenses for one year. Keep costs low by bootstrapping and outsourcing. Raising too much money at the outset often makes start-ups lazy.
Mwongera A qualified architect just needs a client and a computer. Simple. It’s possible to turn an extra bedroom into an office, and still go on to grow into an international firm.
Chris It’s too high. Start small – that way you are not left drowning in debt.

Which good marketing ideas don’t contravene industry rules?
Mwongera Use site sign boards – boards erected on construction sites listing the projects’ consultants; people passing would see your name. Also, try social networking, or entering an authorised design competition. Ultimately, do a good job: client referral is the best advertising.
Chris Network! Network! Network! Get out, meet people. Work out who has the jobs you are looking for and how to meet them tactfully, without being an annoying sales person.

What has made companies such as Symbion and Planning Systems the best architectural firms in Kenya?
Joel Successful businesses are made so by a combination of factors, the most important one being having the right people in the right places – to attract clients, produce great work and run well. Keep clients happy, and your business will grow.
Chris The industry has room for all types of firms. Carve out your niche! If you work hard, market hard and give your clients the quality they deserve and more, you will be just as successful.

How do you ensure consistency in quality of services provided?
Joel Invest in your team: hire the right people, create a good working culture, invest in training. Also invest in building processes so everyone knows what they are supposed to be doing. Outsource non-core work, such as accounting, so you can focus on what you do.
Chris Systems! Over time you will figure out what works for you. Remember what you learnt in school and in the workplace, and apply it. If it works, make it a part of your system.

Do you need a full-time accountant?
Joel  While it is crucial to get accounting right from the get-go to avoid issues later, an in-house accountant is not required.
Mwongera An established firm should retain a full-time accountant, but one just starting may prefer someone part-time.

What resources are required for a successful start-up, given the current industry situation?
Joel  The primary resource is a good team and a great culture. Look to hire or partner with an individual who is a business person, so knows how to carry out sales, marketing, accounting and negotiation, or look to build these skills yourself.
Mwongera You need to be registered and in good standing with BORAQS.
Chris I worry when you refer to ‘the current situation in the industry’ – think of it as just another hurdle. That attitude is the first key resource.

Most architects aim to pin down a major project to sustain their new offices. If that doesn’t happen, what back-up strategies can you employ?
Joel For a consultancy firm, investing heavily in an office at the start is a mistake. The expenses and hassles of running the office – bills, cleaning, landlords, etc – detract from finding clients and designing. Find a co-working space, serviced office or a spare bedroom to keep your costs low; only get an office when the business would be saving money by moving premises.
Mwongera Save enough money to run the office during times when you have no project to bring in the money.

Got a business idea of your own? Then get in touch! We can put your plans to a panel of experts, to give you the best possible start: email kenyayetu@geckomags.com or Tweet us at @kenyayetumag

 

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