Here's a behind-the-scenes look at a 99 year old architecture practice in the Northeast US as told by one of the 4 Principals. The firm has 30 employees and focuses on K-12, higher education, and healthcare projects.

Office Situation:

We'd like to own but we rent from a government entity so there are lots of issues to buy the building. Rent is $19,000/mo.

Salary:

My salary is $117k/yr plus a car allowance (including maintenance) that works out to about $800/mo. Year end bonuses are dependent on firm profit.

It had been stagnant for a while, but recently adjusted from $110k/yr to $117k/yr.

Work/life balance:

It's out of whack. I still work 55+ hours every week.

Debt:

The only debt is about $24k that we owe a former partner as part of their retirement & selling back their shares. But that will be paid off this year.

We use the Elan Vis credit card. It has decent rewards but not used a great amount.

Revenue & Profit:

Over the last 12 months, we've generated $5 million, plus or minus, in revenue.

Revenue has ranged from $5M to $7m each year. Last year was a disappointing year — always have to hustle to find new work.

Our profitability varies. 20% is ideal and 15% would be great. Most years it falls between 10% and 15%.

Our top financial goal is to improve cash flow and build a one month reserve to cover expenses.

Best & Worst Expenses:

Best: The HCD Healthcare Conference. Great way to get re-inspired.

Worst: Rent — I wish we could buy the building. A close second is subscription costs on software.

Biggest Mistake:

We took on the wrong client for the wrong fee last year. It cost us a lot of money.

Book Recommendations:

Read as many as you can…always be learning.

Final nugget:

Consultant costs (engineering) continue to rise, outpacing inflation and fees. The percentage of revenue to consultants is an important metric to track.