Part 1: The Cost of Setting up an Architecture Firm in New York

Artboard 8@4x-100

There was an article on Archdaily a while ago called “21 Careers You Can Pursue With A Degree in Architecture”. I liked it a lot. I like to think that with the education and training that architects get, licensed or not, we have many options when it comes to making a living, from being an artist, to being a professor, to being a politician. And that list is not even close to being exhaustive!

But let’s say you, like most people who got licensed, want to be a somewhat traditional architect, one who sets up an office the way the ARE’s taught us. And you are ready to make it on your own. What are the next steps? How feasible is that? Most importantly, is it worth it?

Money is not the only thing that matters, but it is one of the biggest hurdles. So, I want to look into the numbers, and spell them out in two posts: Part 1, how much you have to put in, and Part 2, how much work you have to find to make that money back.

Assumptions

All of these are of course very complicated, so we have to assume a lot of things. First, we will assume you want to do it alone – it’s a whole other topic to talk about starting a business with one or more partners. Then, we assume you have a spouse whose employment covers your health insurance so we don’t have to address it. (That’s a big one, I know! But I need to keep this relatively simple for discussion’s sake) We will also assume you are licensed in the state of New York (because I am, and so many things are state-specific :P)

 

The “Low” Plan

In a way, the absolute bare minimum to start a business can really be nothing – assuming you have a decent computer, a “magical” way of finding all the softwares, you work from home, and you set up a sole proprietorship. Most people start moonlighting this way.

Low Plan

For marketing, you can use social media services that are free, like facebook and instagram. You can host your website for free on Wix. You can find clients by attending free meetups or sitting at a bar. For printing you can send out the prints and get the client to reimburse you.

We all went to architecture school – we know how to make things work when we have to.

The “Low” Plan costs: $0

 

The “Medium” Plan

But we know there is no free lunch in this world and even though our “Low” Plan might be doable, it’s not that sustainable. So let’s look at a slightly more realistic and practical way to do it in our “Medium” Plan.

Insurance and Business Entity

There are risks associated with every business. Even if we try our best, there are always things that can go wrong. So, to start a company, especially if you are putting your stamp on projects and therefore putting your license on the line, it’s good to be protected.

To protect your personal assets, you can set up a PLLC business entity (Professional Service Limited Liability Company). You can also form a PC, LLP, or a DPC (read more here), but they are less common. (Interestingly architects are not allowed to set up a regular LLC (Limited Liability Company) in the state of New York.)

To set up a PLLC in New York, it costs:
Filing Articles of Organization – $200 (one-time)
Publication Fee – $50 (one-time)
(Then you pay $9 every two years to renew afterwards.)

For insurance, the most standard ones are General Liability, Professional Liability, and Worker’s Compensation Insurance. The cost is highly dependent on your experience and the state you are in, among other things, so I can only tell you what I could find. For my first year, I got the quotes (rounded numbers):
General Liability + Professional Liability – $1,350/year
Worker’s Compensation – $480/year

To protect your home address and privacy, you might want to open a P.O.box. The cost of a P.O. box varies by location, but a rough ballpark goes:
P.O. box – $100/year

Equipment & Softwares

Even though the world is moving towards being paperless, and you see architects making punch lists on ipads all the time, you will still need paper to practice architecture in the foreseeable future. I found this HP DesignJet that can print 24”-wide drawings, which should satisfy most architects’ printing needs:
Large-Format Inkjet Printer – $650 (one time)

Let’s say you only draft in 2D and you haven’t caught up with Revit yet. For software you pay:
Autocad License – $1,260/year

Office

I like working from home, but if you need an office, with the new co-working trend there are a myriad of shared-office options out there. One of the cheapest thing to do is to sign up with companies like Spacious, which gives you exclusive access to their locations with free coffee all day (think members-only Starbucks). You will have to bring and work on your laptop though:
Shared Office Membership – $1,428/year

Medium Plan

The “Medium” Plan costs: ~$5,500

 

The “High” Plan

If you want to go all in and use money to save yourself some time and some headaches (which a lot of times is the smart thing to do), you can invest some more in your business.

Softwares & storage

On top of 2D line drawings, it’d be nice to be able to model things in 3D, render them, and post-process the images after. If you want to access your file anywhere from the cloud, you can pay for Dropbox Plus. Prices are:
DropBox Plus (1TB storage) – $99/year
Adobe Creative Cloud License (All Apps) – $600/year
Rhino 6 License – $995 (one-time)
and/or
Sketchup Pro – $695+tax (one-time)

Office

If you want your own desk, you can sign up for a “dedicated desk” or “private office” at one of the coworking offices like WeWork. New York City is one of the most expensive cities in the states, so it’s not cheap; but it’s still cheaper than your traditional rented office space. Plus there is no commitment:
Dedicated Desk at a Shared Office – $8,400/year

Website and Domains

Although websites like Houzz can help you generate a professional portfolio, it’s still nice to make your own and have a  unique domain in your email address. You can use services like Squarespace with Google’s G Suite:
Website – $216/year
G Suite (For Business Email) – $60/year

High Plan

The “High” Plan costs: ~$15,870 (yikes)

 

Other Costs

I didn’t include the cost of renewing your architect license, because you have to renew it whether you start your own business or not. Anyway, let’s keep that in mind too:
NY State Architect License Renewal – $287/3 years = ~$96/year

That’s all I have! There are so many other things to pay for too, like business cards printing, continuing education, account fees, lawyer fees…etc. But in these “plans” I included the things that stick out most to me as a start-up costs. Everything else can come later. I summed them up here:

Cost of setting up an architecture office - the three tiers

(click to enlarge)

Let me know if I missed anything in the comments!

In the next post, we will talk about how we can make that money back.

 

 

 

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