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PRODUCTION MODEL - BUSINESS OF ARCHITECTURE 02

5/20/2014

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There are 4 aspects to BUSINESS LIFE-CYCLE – at least in theory la…..

Getting the Business – Business Development. We need a FLESHY PORTFOLIOS. Works that can sell itself without much deliberating. We need to create more SEXY-Buildings. The wow factors that will excite the potential client. If it is not the building we need SEXY-People. Good looking people and charming orators that can sell ice to the Eskimo. We need SEXY-Coverage from the Medias, although the Board is very cautious about it! We need to be creative to work around it. We need to “buy” our way through the intriguing networks of brokers, managers and lobbyists. That is reality – the $ speaks loudest. Over-promise is NEVER a Sin. Under deliver – YES! We also need SEXY-Address. Imagine one lobbying for jobs amounting to Billions with an office somewhere in the slum?

Doing the Business – revenue. Revenue is your BLOOD line, without it everything will “close shop”. Revenue comes in the form of your collections, invoices, bills and so forth. You have to find ways to increase revenue and none other by Getting the Business! Newbies mistake is to provide FREEBIES in the form of Free Proposals that brokers will salvage to sell them to their potential clients in your expanse, not theirs. That is a FAIL Business Model. Recruit debt collectors if necessary because in this line of business, payment is always on credit terms. Overall it is unhealthy. The paradigm has to change. Perhaps bridging loan is a short term solution. Remember, REVENUE = PRODUCTION COST + PROFIT. Either way both production cost and profit have to increase!

Managing the Business – Effective Delegation. One reason business fail is because the Principal abdicated its role to someone else. Abdication is not Effective Delegation. Effective Delegation comes with the reward, abdication – no. Effective Delegation comes with a precise objectives and discretionary limits, abdication – no. Effective Delegation comes with proper reporting, abdication – no, and the list can go on. If one fails to delegate, the organization will not grow. The real assets of the firm is Human Capital, not the owner. The owner is credited for its foresight and vision. In other words, if you find someone asking the screw driver to do a hammer’s job, you know it is going to be trouble!

Financing the Business. This is the very one aspect that makes Architectural Practice a FAIL business model. Firstly, Architectural Practice is heavily dependable on human capital and production technology plus all the fixed expenditure and that incurred REAL Cost. Second, services payment are on credit terms and may not be prompt. Such Financial Charges will add up into our REAL Cost and if you are not careful you will end up with LOAN SHARKS. Thirdly, recouping Bad Debts are a risky business due to high Legal Cost and Prolonged Legal Battle. Holding ransom with the Letter of Release will not offer much help. It fails on the first principle and it really doesn't make money sense to run a firm. Yet, people does it! Why?

These 4 aspects will continue to haunt you. Once in a while you will rudely wake up from your sleep with chilling sweats that you need to make up for the 100K pot holes to keep your firm up and running before the bank foreclose your personal property. If you care to look at the profitable firms, you will understand that they had broken away from this paradigm. The question now is… what is this new paradigm?

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    David Yek Tak Wai

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    I am sharing these information with a caveat that these information is for educational purpose only and shall not be taken as an advice be it legal or otherwise. You should seek proper advice to your case with the relevant professionals. The author cannot guarantee the accuracy of the information so provided here.

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    • Large Projects >
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        • Blink
      • Lowrises >
        • Data Center
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        • Albient
        • Hillcourt
    • Small Projects >
      • Rustic Raphsody
      • MCM >
        • Estate House
        • Uniform Annex
        • Kitchen Extension
        • Sixth Form Center
      • Putrajaya Boulevard >
        • LOO
        • BOO
        • DOO
        • 5 Elements Tower
      • Detached Houses >
        • Batu Residence
        • Malaqa Residence
        • ParkCity Residence
        • Sierramas Residence
      • Commercial >
        • Albion Club
        • QuanYuan
        • Nippon Go
    • Interior Designs >
      • Spartan Minimalism
      • Neo Retro
      • Reflective Modern
    • UBBL 1984
    • Newsletter
  • DYA + C
    • Our CV
    • Adjudication >
      • CIPAA Procedure >
        • Scope of CIPAA
    • Arbitration >
      • Appointment of Arbitrator >
        • Terms of Appointment >
          • Preliminary Meeting Agenda
      • PAM Arbitration Procedure
      • Arbitration Costs Breakdowns >
        • Drawdown
      • Award Writing Blog >
        • Expert Evidence in Arbitration
    • Mediation >
      • Appointment of Mediator
      • Mediation Process
      • Skill Set Lev 01 & 02
    • Expert Determination >
      • Expert Rules - PAM
      • Expert Determination Processes
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    • Courses & Training >
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      • MBS FengShui Reinvestigated
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  • Educator
    • Author I am...
    • Speaking Engagement >
      • International Contract
      • PAM cpd UNLIMITED 2.0
      • Arch Edu Practice Paper - 3Ds Pedagogy
    • Attempting Law School
    • Journey in USM(Arch) >
      • Thesis >
        • Site Analysis
        • Urban Design Approach
        • Sketch Design
        • Model Based Paradigm
        • Technical Studies
      • Studio 01
      • Studio 02
    • Discourse in Studio 6 >
      • Ideation
      • The Production Model >
        • The Actors
        • The Stage
        • Urban Mass
        • The Box
        • The Play
        • The Break
        • The Newsletter
        • The Document
        • The Presentation
    • d:KON 4 >
      • Actors >
        • Chua LiCheng
        • Ng KenHong
        • Sean Tan
        • Peggy Chai
        • Elliotte Teoh
        • Vincent Tow
        • TzeLer
        • Elaine
        • Ng SongChun
        • Carissa Foong
        • Ng WeiMun
        • Ng ChenYin
        • Nicol Ong
        • Adron Liang
        • Ivan Sung
        • Lau HuiJew
      • Acts >
        • Portraiture
        • A Slice of Space Time
        • Box of Installation of Lights
        • Radio Misreading
        • Grid of Destinies
        • Shelter
        • Anatomy of Pain
        • Tensigrity of Ego
        • Of Prisons and Walls
        • Forest of Nails
        • Curtain of Fears
        • Dissolution of the Ego
        • If it's Ain't Broken it's Ain't Worth Mending
        • Flight of Freedom
        • Cross of Complexity and Contradiction
        • interrogation
      • Stage >
        • Soap Box
      • Play
      • Approach
      • Galleria >
        • Martial Gallery
        • Drive Through Gallery
        • Clinique Gallery
        • Cafe Gallery
        • MACC Gallery
        • Haunted Gallery
        • Backpacker Hotel
        • Audio Bookshop Gallery
        • Funeral Parlour
        • Extreme Game Gallery
        • Play Ground
        • Wedding Gallery
        • Meditation Gallery
        • Water Tower
        • Photography Studio
        • Chapel Gallery
    • External Critique >
      • Discourse in Sem 06
      • Discourse in Sem 05 >
        • The Site - KB
        • The Rectilinear
        • The Paired Kidneys
        • The Boat
        • The Decepticon
        • The Curvature
      • EnviroDesign MasterClass 2015
    • Philosophy
    • Codes Regulations & Standards >
      • Building Codes
      • Fire Codes
      • QAQC & Building Inspection
      • Critics
  • Photo Essays
    • Shanghai
    • Siemreap
  • Contact