Practice costs for architectural technologists

[edit] Salary standards and working out what you’re worth

Architectural industry salary standards have been gathering a large amount of interest recently, leading to a huge awakening of public understanding of the gulf between what is charged and what is actually earned.

Publicised across the media and in industry-specific podcasts such as Jon Clayton MCIAT’s ‘Architecture Business Club’, this topic of stagnating salaries is becoming an increasingly urgent discussion. And yet, with such a huge focus on how much a Chartered Architectural Technologist earns, why are so few people asking, “How much does it cost to be a Chartered Architectural Technologist?”

To calculate the ‘break even rate’ for an architectural practice, one must first look at the overheads. There are
no universal magic numbers here; each specific practice will have its own unique set of overheads and other costs. A sole practitioner will of course have very different overhead costs to a medium sized practice in a city centre.

Below are example figures that simply show the principle of calculating overheads:

[edit] Annual Hours

To determine the hourly break-even rate, the practice will need to determine how many chargeable hours are available in a year:

37.5 Hours a week x 48 weeks equals 1,800 Hours per year. If 60% of those hours are invoiced for, that equals 1,080 hours per year. This gives us a £59.28 per- hour ‘break even rate’. (This is £79.04 per hour after 25% corporation tax.)

If we were to add a 20% profit margin, this would give the above example a chargeable rate of £94.84 per hour.

[edit] Utilisation

Wait a second... why are only 60% of hours invoiced? Well, every single worker in our industry will have a unique ‘utilisation ratio’ – the percentage of their time that is directly billable to the client. For a technologist working in a large firm who spends most of their time drawing, this may be close to 100%. However, for a Director of a mid-to-large practice, this will probably be 0% – their job is to win work and manage the company; none of which is billable.

If we take the above example of a sole practitioner Chartered Architectural Technologist who is tendering for a small domestic extension planning application, they have estimated 32 hours of their time to complete the application. However, in real hours, this could account for up to 53 hours of practice time.

[edit] Winning the project

Say a practice wins 1:3 projects that they bid for (which is better than average if a domestic client
is approaching four or five practices). It could take approximately four hours to travel to meet the potential client, travel back, produce a detailed fee quotation letter and possibly a sketch. That already equates to 12 hours unpaid... just to win a 32-hour project.

Let’s add an hour per week for CPD (required by professional body), another for expenses and accounts, another for networking and submitting to awards and competitions, and another for social media and marketing (including marketing guides like this!). Then let’s add two hours per week for admin such as project directory updates, insurance, updating T&Cs and policies, reviewing CVs, and ordering stationary. Finally, let’s take 10% of the project, so three hours, as contingency for tweaks and unexpected queries from the planner or the client.

That is already 53 hours.

And this does not even consider aspects like fielding new enquiries, scope creep, creative time, or office socials. It also assumes you have a perfectly consistent steady stream of work coming through the studio door with zero downtime. So, what can you do to maximise profitability?

[edit] Maximising profitability: initial consultations

When a Chartered Architectural Technologist gives an initial consultation, please remember you’re not
a tradesperson just there to “give a quote”. The Chartered Architectural Technologist will be offering professional advice on the design, budgets, the planning process, as well as buildability advice. You wouldn’t expect an accountant to travel to your house and give you free financial advice. As a profession, we should normalise charging a fee for this

[edit] Maximising profitability: efficiencies

Having a good set of templates is the backbone of any practice, from drawing templates to fee proposal. These documents will save employees’ time several times a day. Think about all of your regular processes and how they could be streamlined. For example, do you still have to manually log in to your banking website to check a payment, or is it automated to either send a payment notification or generate a reminder?

[edit] Maximising profitability: reducing scope creep

Do your T&Cs set out exactly how many rounds of comments the client can give? Or the level of coordination, commenting and collaboration with other consultants? Tighten up your T&Cs to focus the client and stop any scope creep before it begins.

This is a very interesting time for our industry. If we continue to invite transparent conversation about the cost of being an Architectural Technologist, we can ensure that we are charging fairly and maximising profitability.

Lee Smith has been a Chartered Architectural Technologist for 25 years and is a Director of CIAT Chartered Practice, Cambridge Architectural Design.

This article appears nin the AT Journal issue 151 Autumn 2024 as "How much does it cost to be an AT?: Salary standards and working out what you’re worth" and was written by Lee Smith FCIAT.

--CIAT

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