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Setting up your own practice can be an exciting but also daunting experience, and it is wise to seek assistance and advice from your lawyer, accountant and professional colleagues and organisations. Many of the pitfalls of establishing a business can be avoided with the right advice and careful planning.
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Registration
To use the title ' architect A person who is registered with the relevant Architects Registration Board (or equivalent) in their state or territory. View full glossary ' and to promote your services as an architect, you must be registered. Registration brings with it professional obligations and responsibilities, designed to protect the public interest. Each state and territory have specific registration requirements for architects and, while reciprocal recognition applies, it is necessary to be registered in each state or territory in which you intend to work. Some jurisdictions have additional requirements in relation to architectural practice and matters such as professional indemnity insurance, and you will need to ensure that you comply with such requirements. See Acumen notes Architects act and Codes of conduct.
Corporate structure
The corporate structure you choose to establish your practice is an important decision that will have significant implications for the way in which you manage your business. It is important to recognise that your practice is a business and that your professional activities and corporate structure will combine to help develop your practice into a valuable asset. Common options include:
- sole practitioner
- partnership
- company structure
- trust structure.
Your lawyer may help with matters such as partners' agreements, office and equipment leasing, employment contracts, business registration and a variety of other matters essential to running a business. Seek professional advice in relation to the most suitable corporate structure for your practice.
See Acumen note Business structure and planning which includes more information on the above common corporate structures.
Tax and regulations
An accountant may assist you in understanding and complying with the numerous regulations affecting small business, including:
- GST Goods and services tax levied under the GST Act - A New Tax System (Goods and Services Tax) Act 1999. View full glossary
- record keeping
- business activity statement (BAS)
- pay as you go (PAYG) tax
- fringe benefits tax (FBT)
- withholding tax
- payroll tax
- equipment leasing
- financing
- insurance
- financial management
- financial planning
- superannuation.
Most state and territory governments have agencies that offer advisory services to small business.
Insurance
Some insurances are required by law, while others are optional, and depend upon a risk/affordability assessment. Refer to Acumen note Insurances for privately owned architectural practices.
Office space and equipment
The location of your office can have an important influence on your practice. Providing a greater work/life balance by supporting flexible working arrangements (including working from home) can assist in attracting and retaining good staff. If working from home however, you must ensure that you comply with local government regulations regarding home businesses. As the practice grows, you will need to consider matters such as:
- accessibility to and for your clients
- capacity for change – try to ensure that leased commercial office space allows room for growth or contraction
- adequate parking for you, your staff and clients
- adequate storage areas
- the image the office presents.
Equipment
Your image and professionalism rely on your capacity to present your work to clients and other organisations efficiently and to a high standard. Equipment needs will vary from practice to practice, but the following gives a guide:
- telephone
- mobile phone
- photocopier
- binding machine
- computer
- back-up system
- printer
- plan printer and/or plotter
- safety equipment and protective clothing.
Library
When establishing a practice you will need to set up a technical library to support your professional activities. This can be in the form of a digital library. Refer to Acumen note Library of Standards.
Office procedures and systems
Even the smallest practice will benefit from an office-procedures manual, regardless of how informal it is. By formalising the procedures to be followed for various activities you develop a checklist which, over time, becomes an invaluable project-management tool. This can be particularly useful when the practice only occasionally undertakes certain types of projects (eg where the practice usually does domestic work but occasionally has a commercial project, or vice versa). Some government and private clients require architectural practices to be quality assured and a well-developed office manual will form the foundation of your quality-assurance system.
- Establish and document the procedures that you will use to run projects and your practice.
- Develop an effective filing system for general filing and drawings.
- Develop and use standard pro forma for repetitive activities.
- Use systems and forms that are common to architectural practice.
- Keep records of successes and failures – learn from your mistakes.
- Don't rely on your memory.
Refer to Acumen note Office administration and office structure, for further information.
Employing staff
Employing staff carries legal and moral responsibilities which need to be clearly understood. These obligations require an employer to observe applicable award terms and conditions. Where an award does not exist, an employer must comply with any existing provisions and is morally bound to ensure that the terms of employment are reasonable.
You also have obligations to deduct income tax, pay FBT and pay superannuation for those you employ, at levels set by the government. Your accountant can advise you of details and current rates. If you are self-employed or a sole trader you do not have an obligation to contribute to superannuation, although it is prudent to do so.
For comprehensive advice on employing staff, see Acumen note Human resources in addition to the Institute’s HR Hub.
Professional development
The architectural profession must be able to demonstrate to clients and the public that its members are continuously developing their professional skills. New technologies, materials or methods of construction, social expectations and many other factors demand that architects maintain their professional skills through some form of continuing education. It is a requirement in some states and territories that architects undertake Continuing Professional Development (CPD) to maintain registration. Refer Acumen note Continuing Professional Development (CPD).
Conclusion
Setting up your own architectural practice should be a rewarding and positive experience. It provides an opportunity to fulfil professional goals and satisfy personal ambitions, but in doing so you will need to clearly define your objectives and expectations, carefully plan the establishment of your business and closely monitor its implementation.
Further resources
- Starting a Practice notepack.
- A+ membership is practice-based and provides a range of special benefits. See the Australian Institute of Architects membership webpage for more information.
- The Institute's HR Hub provides further information about starting a practice including the employment of staff and use of equipment and technology - refer details below:
Disclaimer
This content is provided by the Australian Institute of Architects for reference purposes and as general guidance. It does not take into account specific circumstances and should not be relied on in that way. It is not legal, financial, insurance, or other advice and you should seek independent verification or advice before relying on this content in circumstances where loss or damage may result. The Institute endeavours to publish content that is accurate at the time it is published, but does not accept responsibility for content that may or has become inaccurate over time. Using this website and content is subject to the Acumen User Licence.