Business Management and Application for Architecture Reviewer PDF

Business Management and Application for Architecture Reviewer Lesson 2 Marketing Architectural Services "Marketing is the heartbeat of every business—it turns ideas into opportunities and connections into lasting succ...

Business Management and Application for Architecture Reviewer Lesson 2 Marketing Architectural Services "Marketing is the heartbeat of every business—it turns ideas into opportunities and connections into lasting success." Specific Learning Objectives - Identify strategic concepts of marketing architecture in the practice of the industry. MARKETING - Process of bringing new business to a firm in order to sustain and grow the practice. Communicate with prospective and existing clients. Get the work in the door-including correspondence. The firm’s/ Company website. The quality of the firm’s design work. The firm’s reputation. The way the receptionist answers the phone. IMPORTANT THINGS IN MARKETING ARCHITECTURAL SERVICES PROCESS Convincing prospective clients of a firm’s creative and problem-solving ability. Attention-to-detail and follow-through. Passion for the project. PURCHASE DECISION - Process of deciding if you will go or pursue to really get the project. - “Business development” has a much better ring to it than “sales.” Business development process is about convincing the prospective client that the firm is the best firm for the job. GOOD DECISION MAKING - Leads to better results (and fewer repercussions). - Better decisions might leave you with more options and flexibility. - Conversely, a good decision might shut off other options but open up a new opportunity. - When you make better decisions, it also means you're learning from your mistakes. HOW PASSION FITS IN? - "This project is important and we really want to win it, so the facts aren’t really important here. We’re going after it full-on no matter what.” THE MARKETING TEAM - They are central to business success. - They are tasked with everything from building awareness of your brand, - promoting products or services, and - providing customer service and engagement in public forums. 1  Lesson 3 Good Strategy & Bad Strategy in BUSINESS PLANNING “When you speak of ‘strategy’, you should not simply be marking the pay grade of the decision maker. Rather, the term ‘strategy’ should mean a cohesive response to an important challenge.” Specific Learning Objectives - Identify the difference between Good Strategy and Bad Strategy and why it matters. STRATEGY GOOD STRATEGY BAD STRATEGY “Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is as much about what an organization does not do as it is about what it does.” - Richard Rumelt GOOD STRATEGY - Good Strategy, by contrast, specifies how the organization will focus its resources to respond to a challenge and move forward. Good strategy has three part: Diagnosis Guiding Policy Coherent Actions TWO SOURCES OF STRENGTH STRENGTH Having a good strategy- one which coherently coordinates all policies and actions Being able to discover new strengths- by making subtle changes in your viewpoint. “Bad strategy is not simply the absence of good strategy. It grows out of specific misconceptions and leadership dysfunctions. Once you develop the ability to detect bad strategy, you will dramatically improve your effectiveness at judging, influencing and creating strategy.” -Richard Rumelt BAD STRATEGY FOUR MAJOR HALLMARKS OF BAD STRATEGY 1. FLUFF - the started strategy is gibberish or superficial restatements of the obvious mixed with buzzwords. - Fluff results when expertise, thought and analysis are completely absent. 2. Failure to face the challenge 2  - which is serious because if you cannot define the challenge, you cannot come up with a strategy to improve it. 3. Mistaking Goals for Strategy - being content to have statements of intent rather than concrete plans for overcoming obstacles. “We will grow revenue by 20% a year while maintaining a profit margin of at least 20%” 4. Utilizing Bad strategic objectives - fail to address critical issues and objectives are impracticable. BAD STRATEGY Bad Strategy flourishes because: Lack of Clear Goals Template-Driven Approaches Emulating Superstars “A good strategy defines a critical challenge. What is more, it builds a bridge between that challenge and action, between desire and immediate objectives that lie within grasp.” -Richard Rumelt GOOD STRATEGY UNDERLYING STRUCTURE “KERNEL” Diagnosis - Define the key challenge in clear, simple terms Guiding Policy - Define a clear direction for addressing the challenge Coherent Actions – Define how to execute the guiding policy. 1. Accurate diagnosis - A good diagnosis will classify things as they stand, - align facts into patterns and maybe even bring to the surface knowledge about how similar situations were handled in the past. - In practical terms, the diagnosis will be a judgement of the true facts of the situation which replaces complexity with a simpler problem which can be solved. “At a minimum, a diagnosis names or clarifies the situation, linking facts into patterns and suggesting that more attention be paid to some issues and less to others. An especially insightful diagnosis can transform one’s view of the situation, bringing a radically different perspective to bear.” -Richard Rumelt 2. Guiding Policy - It outlines the overall approach to be used to overcome the obstacles highlighted by the diagnosis. Good Guiding principle - anticipate what might arise, reduce complexities and ambiguities, - exploit the leverage which is available and create policies and actions which are coherent in that they build on each other. 3 “A good guiding policy tackles the obstacles identified in the diagnosis by creating or drawing upon sources of advantage. Indeed, the heart of the matter in strategy is usually advantage. Good Startegy create advantage by magnifying the effects of resources and actions” -Richard Rumelt 3. Coherent Actions to be undertaken - A good strategy always involves doing something to move forward. - There must be clarity and coordinated action- that is, the actions taken must be coherent and consistent with one objective. “Strategy is primarily about deciding what is truly important and focusing resources and action on that objective. It is a hard discipline because focusing one thing slights another” -Richard Rumelt EXAMPLE SCENARIO Scenario: An architectural firm has been struggling to win new projects and is losing market share to competitors. They recognize the need to revamp their approach to stay competitive and grow their business. Accurate diagnosis Accurate Diagnosis and Objective Setting: The architectural firm conducts an extensive assessment of its current position and identifies issues such as outdated design trends, limited sustainability efforts, and insufficient client engagement. Their objective is to regain market leadership and secure new projects. Guiding Policy Definitive Guiding Policy: To address these challenges, the firm formulates a guiding policy for their strategy. The policy is to "Reestablish industry leadership through cutting-edge, sustainable design, and proactive client collaboration." This policy provides a clear direction for their strategy. Coherent Actions to be undertaken Strategy Development: The architectural firm develops a strategy that aligns with their guiding policy: o Sustainable Design Integration: They focus on incorporating sustainable design principles into all projects, staying ahead of industry trends. o Client Engagement Initiatives: The firm initiates proactive communication with clients, involving them more deeply in the design process. o Educational Outreach: They engage in educational programs and workshops to raise awareness about sustainable architecture. o Design Awards: They target design awards to highlight their innovation and expertise in sustainable design. o Execution: The firm executes their strategy by incorporating sustainable design, enhancing client engagement, hosting workshops, and participating in design competitions. 4  o Results: Over time, the architectural firm experiences a resurgence in project opportunities. Their focus on sustainable design and proactive client engagement attracts new clients and design awards, helping them regain their position as an industry leader and achieve their growth objectives. o EXAMPLE SCENARIO Scenario: An architectural firm specializing in residential projects has observed a decline in client satisfaction and referrals. They aim to address this issue and improve their business prospects. Accurate diagnosis Accurate Diagnosis and Objective Setting: The architectural firm conducts an internal assessment and identifies problems, including inconsistent project delivery, miscommunication with clients, and a lack of attention to post-construction feedback. Their objective is to enhance client satisfaction and increase referrals. Guiding Policy Definitive Guiding Policy: To address these challenges, the firm formulates a guiding policy for their strategy. The policy is to "Prioritize a client-centric approach by ensuring clear communication, consistent project delivery, and ongoing post construction support." This policy provides a clear direction for their strategy. Coherent Actions to be undertaken Strategy Development: The architectural firm develops a strategy that aligns with their guiding policy: o Improved Communication: They establish a robust client communication system, o including regular updates and feedback sessions. o Streamlined Project Delivery: The firm standardizes project management o processes to ensure consistent project delivery and timeliness. o Post-Construction Support: They introduce post-construction support, assisting clients with maintenance and addressing concerns even after project completion. o Client Testimonials and Referral Program: The firm encourages satisfied clients to provide testimonials and participates in a referral program. o Execution: The firm executes their strategy by implementing a structured communication plan, optimizing project management, offering post-construction support, and promoting client testimonials and referrals. o Results: Over time, the architectural firm experiences a significant improvement in client satisfaction, increased referrals, and a stronger reputation in the residential design sector. Their client-centric approach leads to better project outcomes and sustainable business growth. 5  Lesson 4 BUSINESS PLAN "By failing to prepare, you are preparing to fail.’’ -Benjamin Franklin Specific Learning Objectives - Identify the importance of a BUSINESS PLAN and how to create one. BUSINESS PLAN A business plan is a document describing a company's business activities and how it plans to achieve its goals. Startup companies use business plans to get off the ground and attract outside investors if needed. For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives. There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include. IMPORTANCE OF BUSINESS PLAN GUIDANCE DIRECTION - A business plan serves as a roadmap for your business, guiding you through each stage of starting and managing it. - It helps clarify your business goals and strategies, ensuring that you stay on track as your business grows. SECURING FUNDING - Investors and lenders typically require a business plan to assess the viability of a business before providing financing. - A well-structured plan demonstrates that you have thoroughly researched and developed your business concept, making it easier to secure the necessary funds. MARKET VIABILITY - The process of creating a business plan forces entrepreneurs to conduct thorough market research and analysis. - This not only helps validate the business idea but also, - highlights potential challenges and opportunities in the market, making it more likely that the business will succeed. SETTING OBJECTIVES - By detailing your business goals in writing, - a business plan helps you communicate these objectives clearly to stakeholders, including employees and investors. - This enhances alignment within the team and boosts motivation as everyone understands their roles in achieving the business’s success. PREVENTING COMMON MISTAKES - Many startups fail due to a lack of planning. - A business plan addresses various aspects of the business model, 6  - including financial projections and operational plans, which can help prevent costly mistakes EFFECT OF NOT HAVING BUSINESS PLAN LACK OF DIRECTION - Without a business plan, entrepreneurs often lack a clear vision and direction, which can lead to inefficient use of resources and time. - Decisions may become reactive rather than strategic, resulting in wasted efforts on initiatives that do not contribute to business goals FINANCIAL MISMANAGEMENT - Businesses that skip planning may not accurately assess their startup costs or ongoing financial needs. - This can result in underestimating required capital, leading to cash flow problems or running out of funds before becoming profitable INABILITY TO MEASURE PERFORMANCE - A business plan typically includes metrics and benchmarks for success. - Without these, owners may struggle to assess what is working and what isn't, which impedes the ability to make informed decisions and adapt strategies based on performance DIFFICULTY IN ATTRACTING INVESTMENT - Investors often require a business plan to evaluate potential risks and returns. - Without a well-documented plan, businesses may find it challenging to secure funding, as investors are less likely to trust a venture that lacks a clear roadmap MISSED OPPORTUNITIES - Without the guidance of a business plan, companies may overlook growth opportunities. - A structured plan helps identify and prioritize potential paths for expansion, marketing strategies, and partnerships KEY ELEMENTS OF A BUSINESS PLAN OVERVIEW - Serves as a concise introduction to the business, outlining its mission, vision, and core values. - It typically includes key elements such as the business name, location, and a brief description of its products or services. - The purpose of this section is to provide potential investors and stakeholders with a clear understanding of what the business aims to achieve and its unique positioning within the market. EXECUTIVE SUMMARY - Typically outlines the business concept, highlighting the products or services offered, and identifies the market need that the business addresses. - It also includes an overview of the business model, - detailing how the company plans to generate revenue, - as well as key financial highlights such as projected revenues and funding requirements. - Additionally, the Executive Summary communicates the future vision of the business, outlining long-term goals and growth strategies. GENERAL COMPANY DESCRIPTION - This section typically includes vital information such as the business name, location, and the type of business entity (e.g., sole proprietorship, partnership, corporation). 7  - It outlines the company's mission statement, which encapsulates the core purpose and values driving the business. - It often highlights the history of the business, including its founding, significant milestones, and key achievements. - It may also address the industry landscape in which the business operates, detailing market trends, competitive advantages, and the target customer base. - This section helps establish the context for the business plan, - offering potential investors and stakeholders a clear understanding of what the company stands for and its role within the market. HISTORY & MARKET POTENTIAL - Highlights the company's journey and the landscape it operates within. - The history part outlines key milestones, such as the founding date, significant changes, and achievements that establish the company's credibility. - Meanwhile, the market potential portion analyzes the current market size, growth trends, customer demographics, and competitive dynamics, showcasing opportunities for expansion and outlining the company's strategic position. - This combined information provides a clear picture of the company's background and its viability in the marketplace. OUR MISSION - Articulates the company's core purpose and primary objectives. - It serves as a guiding principle that shapes the company’s strategic direction and informs decision-making. - A strong mission statement succinctly communicates what the business stands for, including its values, target market, and the unique value it offers to customers. OUR VISION - Defines the long-term aspirations and desired future state of the company. - It outlines what the business aims to achieve over time, serving as a source of inspiration and a guiding framework for strategic planning. - A compelling vision statement provides clarity on the company’s purpose and encourages commitment from employees, stakeholders, and customers. OPPORTUNITY - Identifies potential avenues for growth and expansion that the company can leverage to achieve its objectives. - This section analyzes external factors that present favorable conditions for the business, - including emerging market trends, shifts in consumer behavior, advancements in technology, and gaps in the market that competitors may overlook. INDUSTRY & MARKET - Analyzes the broader industry landscape and the specific market the business targets. - It begins with an industry overview, detailing the current size, growth rate, and trends affecting the sector. - Next, it covers market analysis, focusing on customer demographics and psychographics to identify target segments. - Additionally, this section reviews the competitive landscape, assessing key competitors' strengths, weaknesses, and market positions. - Finally, it highlights market opportunities, showcasing areas for potential growth and differentiation. 8  - This comprehensive analysis not only contextualizes the business within its operating environment but also emphasizes its potential for success. BUSINESS STRATEGY - Outlines how the company will achieve its goals and gain a competitive advantage. - It includes strategic objectives, which are specific, measurable goals the business aims to reach. - The value proposition defines what sets the company's products or services apart from competitors. - Market positioning details how the business intends to position itself in the market and the target customer segments it will focus on. TEAM - Outlines the key individuals driving the company’s success. - It typically includes profiles of essential personnel, highlighting their roles, qualifications, and relevant experience. - This section also presents the organizational structure, clarifying reporting relationships and team dynamics. MARKETING PLAN - Outlines the strategies to reach the target market and achieve sales objectives. - It includes a description of the target market, detailing customer demographics and behaviors, and outlines marketing strategies like content marketing and social media engagement. - The section also presents the sales strategy, focusing on distribution channels and pricing, along with a marketing budget that allocates financial resources for promotional activities. - Finally, it defines metrics for success, establishing key performance indicators (KPIs) to measure the effectiveness of marketing efforts. - A comprehensive marketing plan is essential for aligning promotional strategies with overall business goals. OPERATING PLAN - Outlines the essential processes and resources required to deliver products or services efficiently. - It includes a description of the production process, detailing how goods or services are created, as well as information on facilities and equipment necessary for operations. - The plan also addresses supply chain management, focusing on suppliers, inventory, and logistics. Staffing and human resources are covered, detailing hiring, training, and organizational structure. - Finally, it incorporates quality control measures to ensure high standards and customer satisfaction. - This comprehensive plan serves as a roadmap for effective execution and adaptation to challenges FINANCIAL PLAN - Outlines the company's financial forecasts and funding needs. - It includes revenue projections, estimating sales over the next three to five years, and an expense budget detailing expected operating costs. - The plan also presents a cash flow statement to project inflows and outflows, ensuring liquidity, and a break-even analysis to identify the sales volume required for profitability. - Lastly, it summarizes funding requirements, detailing the capital needed to launch and grow the business, including potential sources of funding. - This section is vital for demonstrating financial viability and attracting investors 9