Currently, the business of private architectural bureaus is actively developing in Russia. Many private investors are interested in investing free funds in a promising industry, professional architects seek to expand their activities, construction companies diversify the range of services. Moreover, there are much fewer similar bureaus in our country than, for example, in the countries of Eastern Europe. In the coming years, this business will be actively developing, which is associated with the construction boom in almost all regions of the Russian Federation, as well as with the growth of incomes of both the population and companies. This trend was also reflected in the market for ready-made businesses: the demand for architectural bureaus now exceeds the supply tenfold.
How to open an architectural bureau: Market Description
Today, the market for the services of architects-designers is developed in all major cities of Russia. The undoubted leaders in the number of operating architectural bureaus, ateliers, workshops and studios are Moscow and St. Petersburg. A feature of this market is the rapid growth in the number of players, which is why there is a lot of competition. It is difficult to single out any large companies involved in architectural activities. More often than not, these are some associations (permanent or temporary) of specialized specialists, to whom such cooperation allows us to quickly and efficiently fulfill large orders, while not losing small customers. In this business, every client counts - any work performed demonstrates the professionalism and skill of the company's employees: this is, in fact, its long-term advertising. In addition to demonstrating completed projects, publications in specialized media, organization of their own Internet resources, and participation in special television programs, exhibitions, seminars, and symposia also serve to attract new customers.
It is almost impossible to determine the number of companies operating in the market - the “gray” economy dominates here, when many entrepreneurs (sometimes full-fledged companies with 25-30 employees) provide services privately, without even registering as a legal entity.
It can be assumed that up to 250 architectural and design bureaus (ADB) are currently operating on the Moscow market, the total turnover of which exceeds $ 250-300 million a year. The annual growth rate of this industry exceeds 30%. And we are talking only about the services of designers and architects. Many of them also sell building materials. Given this revenue item, ADB's market size in 2004 can be estimated at $ 900–950 million.
Today, architectural firms are trying to maximize the range of services provided to customers. So, in many companies, along with the already familiar interior design, facade design, redevelopment of the apartment, there are also services in landscape design, dismantling of unnecessary buildings, construction of houses and outbuildings.
In addition, as competition grows in the ADB market, specialization also grows:
• Now only about 30% of companies say that they can perform any work with all types of real estate;
• About 25% of players specialize in working with residential premises. Segmentation is also growing in this area: there are companies that only redevelop apartments, some work mainly with cottages, some with penthouses, some even with castles (a small but very profitable business);
• 20% of firms prefer office real estate, working with developers and companies wishing to give their workplace an appropriate look;
• 10% of ADB provide services to restaurant owners: small structures dominate here (as a rule, created by well-known designers);
• 5-7% of companies have chosen specialization in retail real estate. This segment is growing at the highest rate - over 100% per year;
• 2-3% of players work with beauty salons and other service enterprises;
• 2–5% of ADBs belong to the “other” category, here we can talk about ergonomic projects for new industrial enterprises, modern parking lots, temples (a very closed segment), etc.
The work of an architectural and design bureau, as a rule, is built according to the model, when one architect (often the owner of the company) generates an idea, and the rest develop it. In ADB, it is unprofitable to keep too original creators, because in such companies the demand for ordinary cozy interiors is much higher than for original projects. Bold ideas are in demand once or twice a year, and employees need to be paid monthly. That is why the basis of architectural bureaus is architects who perform their work efficiently. Designers, generators of ideas, most often forced to open their own companies. On the other hand, new ideas create a bureau reputation for a fashionable and prestigious salon, making it a trendsetter in interior fashion.
How to open an architectural bureau: Business specifics
Architectural offices today offer their customers:
• development of design projects and supporting documentation;
• development of a draft proposal and style concept for the interior;
• development of design documentation and engineering drawings;
• coordination of redevelopment in the MVK with subsequent changes in the plans of BTI;
• field supervision of the project;
• a complete set of objects with furniture and finishing materials.
As a rule, the majority of clients come to ADB with a request to develop an interior design, and in the future they choose the company's services for coordination, construction and architectural supervision. Each type of work is paid separately.
More or less standard rates are now formed only in companies working with residential real estate. For example, the interior design of an apartment now costs approximately - 50 y. e. per square meter, a design project for the construction of the facility - about 200 at. e. per square meter, field supervision - 1000 at. e. per month. The cost of work may vary depending on their complexity.
The bulk of ADB's clients are owners of apartments of 200–600 square meters. However, recently, in connection with the active advertising of this type of service on central television channels, apartment owners up to 100 square meters are more likely to turn to the services of designers. We can say with confidence that today this type of service is moving from the category of elite to the category of mass, which is greatly facilitated by the practice of renting out residential buildings without interior decoration.
The profitability of the architectural bureau, as a rule, exceeds 200% (in some cases - several times); however, it is here about the work of designers and architects. Additional income for many bureaus brings work with building materials. It is formed either at the expense of a 25-30% trade margin on wholesale prices (if the company itself provides the repair and construction crews with everything necessary), or through an intermediary fee (received from direct sellers, a list of which the bureau recommends to its client).
Repair work is also a profitable business. Most ADBs have several partner construction teams that list a certain mediation fee.
Established repair crews are rarely created.
One of the most profitable business areas is providing the client with exclusive interior items that can be bought from famous designers or created by the employees of the bureau. In the first case, the profitability will be relatively small - 25–40%, in the second it can exceed 1500%.
How to open an architectural bureau: ADB in law
As a rule, professionals with a large circle of regular customers and a certain reputation in this type of activity take up the creation of an architectural bureau from scratch.
The Federal Law “On Architectural Activities in the Russian Federation” regulates issues related to the development of architectural projects (the architectural part of complex construction projects), legal aspects of the architect's activities; the law does not apply to the general procedure for the development, coordination and examination of a project.
A legal entity engaged in architectural activities must have an appropriate license to carry out design and repair construction works. In the case when the head of the organization is an architect with a personal license for architectural creative activity, a legal entity is not required to have a license.
The license applicant must meet the criteria established by law. At the same time, the qualifications of specialists and their production experience play an important role. In accordance with the regulation on current supervision, each organization during the term of the license must be checked by the licensing authority. The bodies of architectural supervision are the State Non-departmental Expertise of Projects, the State Architectural Supervision Agency and the State Housing Inspectorate.
How to open an architectural bureau: Office
As a rule, ADB tend to rent a small office with a separate entrance (up to 100 sq. M) in a prestigious area of the city. As you know, there is always a demand for such premises, and every year it becomes more and more difficult to open a decent office in the center.
The office is equipped with furniture and computer equipment that must meet the needs of this business.
How to open an architectural bureau: ADB structure
As a rule, the internal structure of architectural design bureaus is as follows:
• The architectural department, responsible for the overall concept, quality and lead time. All employees of the department must have high qualifications, higher architectural or art education;
• the customer service department, unfortunately, does not exist in all companies, but it is necessary to limit the contact of customers with designers. Typically, such a department consists of several managers who, firstly, negotiate the sale of company services, and secondly, act as personal clients' managers during the implementation of projects. In the same department there is a manager who is responsible for relations with suppliers of finishing materials;
• the coordination department is engaged in obtaining permits and approvals for the redevelopment of facilities under construction, coordinates work with subcontracting organizations;
• the construction department carries out repair and construction work at the facilities, is responsible for attracting subcontracting organizations, the quality and timing of construction works. If there is a building license, then this department also includes a foreman and a team of builders;
• accountant, secretary, programmer, etc.
Typically, company departments do not work autonomously, but in close cooperation.
How to open an architectural bureau: Promotion
Architectural bureaus can quite effectively advertise their activities. But in this type of activity, outdoor advertising does not bring large incomes. The specificity of this business is that ADB services can be promoted through certain channels, one way or another connected with the construction and repair of premises.
All means of effectively promoting ADB can be divided into three groups.
1. Media Advertising:
• advertising publications in specialized magazines;
• Web site;
• participation in television programs related to the topic of repair, construction, redevelopment.
2. Information (including intermediary) from construction, real estate and the like companies. This group of funds is based primarily on personal acquaintances of management and leading employees of the bureau; a huge role is played by intermediary remuneration and banal "kickbacks".
3. Recommendations of participants in the reference group (mainly recommendations of previous bureau clients).
It is difficult to create an architectural bureau from scratch for several reasons:
• the applicant is waiting for red tape with obtaining licenses and obtaining certificates;
• market entry due to the large (and constantly growing) competition will take place over a long time and will require additional costs;
• It will be difficult to attract “strong” architects to the new company, whose name is already well known in the market. Now this problem is often solved by transferring a stake in the business to the involved specialist;
• The first order will be the hardest. The absence of a name, and hence customers, at the initial stage will greatly inhibit business development;
• It is very difficult to choose a free space that meets all the requirements for the ADB office.
After weighing all the pros and cons, many private investors who want to enter the ADB market prefer to buy an existing company.
Oksana Sozinova, Olesya Selyukh
Source: Director-Info magazine No. 2, 2005
* The article is more than 8 years old. May contain outdated data