Here's a behind-the-scenes look at a 20-year-old architecture firm located in a large southern US city, as told by the owner. The firm has 3 employees and focuses on high-end residential.

Salary:

I pay myself a $120k base salary ($10k per month). Plus $40k-$50k for retirement, I have a solo 401(k), and $20k-$50k total for bonuses throughout the year, based on business profitability.

My base salary has been the same for the last 10 years. What has changed is the amount I save for retirement and how much I bonus myself throughout the year.

Work/life balance:

For me, it’s great! I work M-F and my total hours fluctuate depending on the work load. I average about 50 hours per week.

Debt:

No debt. I made this a priority from the beginning. We’ve been fortunate that our clients pay on time and most of the time, they pay for services up front.

We have a Capital One 2% cash back card. We use it to purchase everything. The cash back I receive at the end of the year is used to help with employee bonuses.

Revenue & Profit:

We strive for a 20% profit margin overall. Some projects are less but most are higher around 30 - 40%.

The last 12 months has generated about $1.75M in revenue, which is up about 15% from the previous year.

Best Expense:

If there is a “favorite” expense (lol), I would choose our accounting software. It’s literally how we manage our cash flow, expenses, and forecast projections.

Savings & Investments:

I use a part of firm revenue towards investments such as training and equipment. Other investments are team building - dinners, recreational activities and hosting events at my house.

I also invest firm profits in real estate ventures. One goal is to create passive income investments.

#1 Financial Goal:

My main goal is to grow our revenue AND profitability by working on less projects.

I know it sounds counterintuitive, but I’d like to focus on higher revenue projects that are more profitable. I don’t want to scale a business that “does more work”, I want to scale into bigger work with clients that value our skills and time, and are more than willing to pay for personalized service.

It's possible because we’ve slowly been working towards this goal and are seeing results.

Biggest Mistake:

Growing too quickly for the sake of “growing” and not having the proper systems in place.

We’ve adjusted by scheduling our work and educating clients why this a good thing for them - personalized service with very high quality results. In the process, we took on less work and raised our fees. This eliminated prospects that were focus on cost vs our quality mindset.

Also, not properly understanding cash flow and cash flow projections was an early mistake.

Book Recommendations:

So many to list! Business books:

• Markup & Profit - Michael Stone

• They Ask, You Answer - Marcus Sheridan

• Building A Story Brand - Donald Miller

I also enjoys books that nurture the right positive mindset like:

• Mind Gym - Gary Mack

• 7 Days at The Links of Utopia - David L Cook

In the latter, the opening forward by Tom Lehman has a great quote: “know what you do well and perfect it”. This quote changed EVERYTHING for me and my business. It made me see what we as a firm do well and how we can grow/scale if we perfect our process and systems.

For us, it was the personalized service to our clients and how much they valued it because it delivered the quality they expected.

Final Nugget:

Starting a business is hard - period! But having a positive mindset that is open to learning and surrounding yourself with likeminded people has been key to our success!