Dec 15, 2024
From $60k to $160k: The 28-Year Journey of a Solo-Architect
Tyler Suomala
Creator of Growthitect
Welcome to Money Memos! Money has always been taboo in our industry. But that's shifting…
Despite the growing need for financial transparency, many architects have kept firm finances close to the vest, even with partners and close colleagues.
But now, more architecture firm owners are sharing financial insights to grow stronger, more resilient firms.
In an effort to provide real, candid insights into the financial side of running a practice (and to shake up the silence around money), I've created Money Memos. This series brings you anonymous and rare looks into how your peers are navigating the numbers.
Want to participate? Submit your Money Memo here
Here's a look at a "one man band" in Long Island, NY. He told us, "while always questioning my income level versus other jobs or just working somewhere," his decision to be a solo-practitioner for 28 years now, "actually gives me tremendous freedoms I often do not appreciate as much as I should."
Projects:
Multi-family & commercial. No residential.
Office Situation:
I work from home and spend $0 on an office. I go to my commercial clients office as they are too busy to come to me anyway. There are some small tax deductions for my home office taken by accountant.
Earnings & Revenue:
I started my practice 28 years ago at about $60k. Now my revenue is between $140k and $160k per year with $10k-$12k in expenses (the leftover is my "salary"), but it still seems like I give it away.
Most projects are multi-year journeys to get approved and construct and the fees are spread out. So the revenue fluctuates based on project/contract stage.
My biggest financial goal is to keep doing what I am doing and charge more for it. I mostly charge hourly fees to repeat commercial customers.
Work/life balance:
Good when it’s slow and bad when it’s busy…
Debt:
$0 because I pay as I go. But I do keep at least two months expenses in my checking account.
Savings & Investments:
When working bigger projects, I try to divide fee into chunks so I can put larger amounts into an I-401k as my forced retirement savings.
Best & Worst Expenses:
Errors & Omissions (E&O) insurance is my best & worst expense. It lets me sleep better (went many years without). But it's also my biggest expense. It fluctuates with my revenue but it's about $3,500 for $160k of revenue.
Biggest Mistake:
While charging a fair hourly rate means I never lose money, I think the end result (a building) has much more value. But I keep doing it because the same clients have kept calling me for decades now.
Firm owners: Want to participate? Submit your Money Memo here