9 Simple Things Architects, Engineers or Contractors Can Do To Boost Their Revenue
(BTW: this is how ArchiSnapper was born: a few construction-related businesses asked us, more or less at the same moment in time, for a solution to automate their field reports – there was no such software in the market back in 2012 – 2013.)
I know what it is to run a service business…
Most of the time, you have to give a fixed quote upfront, for a rather fuzzy scope. The client changes their mind a few times during the project. The scope grows, exceptions pop up. You have to redo things. Near the end of the project, it’s almost a certain fact that you’ll have to ask for more budget because of all of this, and the client is totally surprised.
Other times, you work on time and material basis (a fee per hour) which is less risky, but in that case the client tries to negotiate your rate down as much as possible (aka “Yes, but my 17 years old nephew also can work with Autocad and he asks $ 15 per hour“), and is most of the time they are questioning the number of hours spent when receiving your monthly invoice (“does it really take 5 hours to do a site visit?“).
Here are 9 simple ways to get paid more, without spending more working hours.
You’ll attract better clients, end up being paid for what you are worth, and you’ll enjoy work (and life!) more when everything is well balanced.
1/ go niche
If you try to do everything for everyone, you are perceived as a generic business. Average. A gray mouse.
Don’t be a jack-of-all-trades.
People will ALWAYS pay more for specialists. Business who focus on one single domain or niche, are so much more attractive to buy from, when you need exactly that service or product.
Refuse projects which are not in your specific domain or niche. Become an expert in one thing. Clients will queue up once your name gets known.
Focus on energy-efficient homes, kindergarten buildings, wood construction or a special kind of architecture (modern).
Clients looking to build a modern architectural bungalow, are MUCH more likely to hire you when they see a website full of references with modern buildings, versus a website with a mix of random things.
Check for example this website: https://www.bailliearchitect.com.au/
“A portfolio of David Baillie Architect projects that incorporate Ecologically Sustainable Design (ESD) to enhance lifestyle, while reducing energy costs. Projects that combine innovative building design with outstanding energy efficiency, whether building a new project, renovating or extending an existing home, in the residential, commercial and health environments.”
An excellent way of differentiating yourself, going niche, and as a consequence, be suppah attractive for people in need of an energy-efficient architect.
Also, check this website example (https://www.buro2018.be), a clear focus on modern architecture.
2/ focus on value
Always focus on value for your client.
Do not present yourself as a cost. Avoid talking too much about your hourly fee or wage. Guide the subject always politely to the value for the client.
When clients start talking with you, try to capture and understand why they hire you. Where do they want to go, too. What’s “value” for them? What will make this project a success (or a failure).
Note it down, and for the rest of that project, FOCUS ON THAT VALUE.
Think about this… A certain client is hiring you to build a depot for his materials. In the very beginning, he told you the look and feel of that building is not important at all for him, but the isolation materials and the energy efficiency is super important.
Well, now you can try whatever you want, but you’ll never impress him with sexy building designs and sketches. He will not care. It is of no value to him. Although you might deliver a piece of art, he’ll look at it as a cost.
On the other hand, he’ll be super happy to pay your invoice, when you show him he’ll be saving $500/month in heating costs.
Always focus on value for the client.
Value could be:
- Beautiful architecture: for a modern art museum building, a lot of the value is in the architecture itself.
- Rental income: for a real estate developer, the future rental income is the value. Work towards that. If you say things like “Let’s do it like this, then it will finish 2 months earlier, and you can start collecting rent as from first of May” – I’m sure they’ll be on your side :-)
- Energy savings: “I would advise you to study this and that subject, and optimise your building accordingly. It will cost you an additional $8.000 one time fee, but you’ll easily save $600 / month on energy.” – Who would not take that deal? Invest $8K and get $7.2K back EVERY YEAR.
- Happiness: “The next BBQ with the whole family on this new terrace will be just awesome.” – people are more going to like you and work with you (and pay your bills!) when you remind them of the final outcome
- … (anything)
Look at this excellent copy (in blue). Isn’t that clear value?
3/ just do it
Here is the most simple trick to get paid more at the end of the month, without working more hours.
Just ask more.
Give yourself a raise, and from now on, ask 5% or 10% more for every new client.
Did you raise your hourly rate in the past few years? Probably not. And you should.
There is something called “indexation”. I don’t have to explain it to you.
But it’s not only that.
You are more experienced, so you make fewer mistakes, you are in a better position to give clients true value, you know more. Probably a 5% to 10% increase is even not enough.
And yes, there is even more reason to ask more…
Low costs attract the wrong type of clients.
Being the cheapest service provider on the market attracts stingy clients who see everything as a cost, are never pleased, want more for less, add “ASAP” in every email subject, pay late, and call you on Sundays.
It is better to be in the more expensive half of the service providers. You’ll attract clients with money, clients who do serious business, and see value in what you offer.
Being more expensive is also a straightforward way to say “I’m good at what I do, and I am confident.” – It is a very efficient marketing strategy. It makes you, as a resource, more scarce on the market.
Read our popular blog post on that subject here: “Architects, Contractors, Engineers: double your hourly rate. NOW.”
4/ stay small
People (most often, employed people and not other founders) always ask me:
“How much people are you now at ArchiSnapper?”
This is the wrong question.
As if employing lots of people is my goal?
The right kind of questions should be:
“Do you enjoy your job?”
“How profitable are you?”
My ambition is not to hire as much as possible people. My ambition is to have fun at work and to be super profitable.
I know quite some small business (going from a solo-founder up to 20 people), who are EXTREMELY profitable.
A team of 4 can be super profitable. The first years are hard for any business, but over time, as a small business, you’ll know exactly how much you can ask, where to find the cheapest quality materials, how to cost cut on phone bills, where to hire the good guys, how to get your clients to pay you on time, how to ask more than your bigger competitor, and so on.
If you put constant effort into improving your little machine (versus “hiring for the sake of hiring”), you’ll become more profitable on a daily basis, your business will run more and more on autopilot, and you’ll enjoy life so much more.
There is no single reason to go big, if you don’t want to.
Small is beautiful, and has a lot of advantages over being big. Where can clients directly talk with the founder? Only in a small business. Where do you get an answer to an RFP within 6 hours? Only in a small business. Where can overhead cost be very low, and margins very high? In a small business.
5/ or go big
…of course… if you want to go big, go ahead!
There are of course plenty of examples of very big companies who make millions of profit a year. And if “Getting rich above all” is your only goal, then going big might the way to go.
6/ productize your service business
Architects, contractors or engineers are in the perfect position to productize (part of) their business. Most of you offer services. Most of you are paid either for a project (fixed price upfront estimation), or per hour (hourly fee).
Bottom line, it comes down to the fact that you trade your time for money. Time is your biggest asset. With an hourly fee, this is quite straightforward. But with fixed price projects, the same is true: if you spend more time than initially budgeted, it directly cuts into profit. If you can do the job in half the time estimated, you’ll make more money. The time-factor is always there.
By productise (a part of) your business, you can sell things which are not directly related to the amount of time you spent on it ON THE MOMENT. All the time spent is upfront: you first “work out something” which you then sell on the market you spending time on it directly.
Some examples speak more than all this theory :-)
- Selling books or courses: you write them once, then sell them over and over again. An excellent example is Lora Teagarden (https://www.l-2-design.com) who wrote “ARE Sketches: A Visual Study Guide to the Architect Registration Exams“. Now she is making a nice side income with her sales on Amazon.
- Invent a product or material to be used in construction. What about those “15 Furniture Pieces Designed by Famous Architects Stir the World of Furniture Design” – every a chair is sold somewhere in the world, some dollars end up in their pocket :-)
There are also tons of construction companies who ended up making their own materials for own usage, and ended up becoming a pure producer of materials since external demand from other construction companies became so big.
- Build a software product. This is exactly what we did with ArchiSnapper.
It does not have to be always “black” or “white”. You can perfectly run your service business, but offer certain products, books or other things on the side.
7/ blog, speak, and share
If you blog, speak (on conferences) and share, you’ll win.
By sharing your knowledge, different things happen.
First, people start seeing you as an expert. Even if you feel ridiculous blogging about a subject which is very obvious for a [contractor | architect | engineer], most of the times this is very valuable information for your clients.
Share things which your clients want to know. You’ll be perceived as an expert. People will trust you more, since you have given them already some valuable content.
Try to be open, honest and transparent when sharing information. People appreciate this. Authenticity is a KEY ASSET these days. Say it as it is. This way, you’ll gain trust.
Trust is essential for getting new clients and leads. The client will not question your number of hours in the invoice if they trust you.
Good subjects to blog or talk about could be:
- Pricing and cost-related topics of construction projects: Clients will always research online about the costs and pricing. “How to build your flat for $X per square meter without losing quality” or “How to save Y/month on heating costs.“
- Your project portfolio: What you have done, for who, when, how the project was done, including before and after pictures. You can also give context, what went well/wrong. Don’t hide the mistakes, and avoid making it a sales show. People prefer transparency, and you gain trust only by being straightforward and honest.
- Your work-related passion: If you blog or talk about what you are passionate about: your eyes twinkle. You shine. People love to work with happy people. When you are passionate about what you do, you’ll put more energy and effort into the blog or talk, the result will be better. People love to read stories and being passionate about something is attractive. How good can life be: working on your passion is a way to earn more…
8/ give and help
By giving unconditionally, you’ll always get back, somehow, soon or late. More often you’ll get much more back than you have ever given… that is, if you do not start measuring it, and if you give unconditionally.
99% of the people in this world are kind. If you provide them with something, they’ll somehow feel obliged to give back to you. This is built into our genes.
Giving can be anything: keep the door open for the guy behind you, give some free (construction) advice to a friend, be the first one to pay a beer to the group, send a handwritten “thank you” card to each customer.
People will like you more. If people like you, they’ll recommend you. It’s as simple as that.
Most people think the opposite: “I’ll give back when I get something from them“.
Be the one that gives first.
Giving does not always have to be something big or cost a lot of money. But try to focus on giving and helping, make it a habit.
I’m not saying you have to work for free for all your neighbours, family and friends. There will always be people who try to exploit you. Don’t worry: just give no more to them. They’ll disappear after a while.
9/ don’t offer slices, offer a bread
Be careful with sending over a “sliced” offers to clients. With that, I do mean: to split out each part separately in your offer.
In a split-offer, when you under-estimate a certain part, and overestimate another, clients are KINGS in cherry-picking out the underpriced pieces, and saying “thanks, but no” to the overpriced parts.
An oversimplified example to make my point.
Say you split up the cost of the foundations, walls and roof in your offer.
You overpriced the foundations, but totally under-priced the walls and roof. The bottom line is a fair price for a good service.
You can be sure that clients will give their agreement on the wall and the roof… but they “did already hire someone for the foundations“.
You end up with a not so profitable project, underpaid, and potentially you’ll have to continue on the very poorly set foundations from a cheap price cutter in the market which is known for bad quality. Worst case you might have to try to explain to the client that you’ll have to ask more for the walls because of the bad foundations.