May 11, 2025
Inside a 4-Person Architecture Firm That’s Hit a $700K Ceiling
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 behind-the-scenes look at a 13-year-old architecture firm in Metro Detroit, as told by one of the 2 partners. The firm has 4 employees and focuses on commercial offices, breweries, distilleries, medical, religious, retail, and multi-family projects.
Ownership Structure:
We are a certified minority- and women-owned business, with a 49% Principal Architect and 51% Principal Interior Designer. Both principals are actively involved in client meetings, contract negotiations, and overseeing business operations.
Office Situation:
We rent approximately 1,100 sq.ft. Our rent is $2,500 per month.
Salary:
Base salary for principals are $120k. Employees are hourly at 40 hours per week.
The base salary has not changed in 8 years. However, bonuses have ranged from a few thousand to $50k. As of the last two years, no bonus was paid out and partners have flipped the bill for corporate taxes at the end, reducing their annual salary by $5,000 to $13,000. We also took no pay beginning in 2025 for the first month.
Work/life balance:
This part is great, we work 9 hours per day 4 days per week and then one 4 hour day per week. The half day is also a work-from-home day.
Debt:
Our only debt is what we've paid in taxes and withheld in salary. We have a line of credit as a safety net which is barely used.
We do not use credit cards, but we have the corporate visa check card.
Revenue & Profit:
Over the last 12 months, we've generated about $642k in revenue with a 15% profit margin.
We've hit a plateau and haven't been able to break the $700k mark in the last 4 years.
We do invest revenue, however, it seems to return back in our account to pick up payroll when client checks extend past 45 days in AR.
Best & Worst Expense:
Software is the worst expense that cannot be avoided. The best expense is any kind of team building activity, from paying our employees when we volunteer at local food pantries to monthly yoga.
#1 Financial Goal:
This is tricky. One business partner is nearing retirement and is solely focused on transition. The other partner loves what they do and never wants to quit.
Growth is a goal with out-of-state markets in the future.
The original financial goal was to top over $750k annually but it seems that is no longer the focus by one partner that wants to sell the company or make it employee owned. At this time, both options are unrealistic.
Biggest Mistake:
Not target marketing and not hiring a business coach. We learned to pinpoint and market to specific industries instead of a shotgun approach.
Another mistake was hiring a publicist, which got us press but no clients.
Currently engaging with a business coach, we’ll see how that goes.
Book Recommendations:
I have not read many to make a recommendation. My business partner was part of the Goldman Sachs 10,000 small businesses, however, that does not seem to have helped the business more then it has harmed it.
Firm owners: Want to participate? Submit your Money Memo here