In the latest of a series of articles focusing on the business plan, ADR reveals that when it comes to preparing for growth, the best thing you can do is plan, plan and then plan some more…

A successful business plan will lead to the expansion of the practice, which brings its own set of challenges that need to be planned for. New work that expands the practice is resource hungry, from needing staff, to space in the office and even management time.

Without a plan, ensuring the practice can expand to meet the work will be very stressful and will take far more management time than would otherwise be needed. Therefore, this article will look at how to plan for expansion in order to reduce the impact of ‘growing pains’.

For many, the biggest challenge is finding staff and, if this is delayed until the work comes in, the chances are that you will have to settle for whomever is available, rather than whom you want. The challenge is how to develop a pool of available, new staff with the skills and aptitude to fit into the practice, when there isn’t a specific project that justifies making a formal job offer.

Despite that, it is possible to develop that pool so that, when the work does come, job offers can be made to the right people with a reasonable expectation that they will accept.

Developing relationships

The best way of building that pool varies depending on the level of staff needed. For the most junior level, some practitioners choose to teach, not just for the satisfaction it brings, but also to be able to assess and develop relationships with the next generation of architects and potential staff. Many tutors who run their own practices find this a great source of future staff, both for immediate needs for junior staff, but for more experienced staff in years to come.

Finding experienced staff that can be available when needed takes long-term planning and activity. Developing a network of contacts within the industry is a good starting point. Usually, people focus on their own peer group, but this needs to be expanded to potential employees.

Taking an interest in the career of somebody and keeping in touch may sound obvious, but few do this seriously and regularly enough to be able to develop the relationship to the point where a job offer would be accepted, even though the person isn’t looking for a job. It takes time, planning and consistency, but this is how some of the most successful practices find the right people.

You end up with new staff you already have a relationship with and whose skills you should already be aware of. Consider the alternatives – you have to accept whoever is available at the time without knowing them well or you have to pay agency fees to find the staff.

Either way, these methods of recruitment are unlikely to be as successful as recruiting from personal relationships. It is time well spent and should be considered part of general management.

Plan your cash flow

Taking on new staff can be expensive. You need to seat them, provide a computer and populate that computer with software. In addition, funding staff salaries for a period before your new client starts to pay for the work can further stretch cash resources.

Clients never pay as promptly as you wish, so if you do not have a plan to manage the cashflow of the project, you could find yourself financially constrained. Win a project that needs a few new staff and suddenly the practice could be faced with a cash flow crisis, just at the time when you should be celebrating a bright new future. As always, the solution is to plan.

Within the business plan, there is a need to analyse the cost of bringing in new staff with an estimate of the cash flows that will arise. Can the cash flows be funded from existing business or from the personal resources of the practice head? If not, consider the options for funding computers and software. As a rule, the easiest and quickest funding to get approved is usually the most expensive.

Explore every avenue

By way of example, the difference between a monthly subscription to a leading BIM (building information modelling) program and paying for a year upfront will cost you almost 50 percent more. Consider whether leasing of equipment may be right for your practice and make sure you understand any other finance options.

Some computer manufacturers offer leasing, but are their products right for the practice and competitively priced? Could more choice be achieved by financing through a specialist? Ensure you understand any potential tax benefits of different funding options so that short-term decisions have lasting benefits to the practice.

Explore every avenue for funding and take advice from suitably qualified experts. Finance companies and banks should be happy to discuss your expansion plans and those talks may even make you revaluate your banking requirements as you compare what different institutions may offer.

Winning new business should be a cause to celebrate. By planning how the new work will be executed, it will allow for the maximum returns and ensure the future financial strength of the practice.

By Simon Nelson