REVENUE GENERATION OPPORTUNITIES

YOUR BUSINESS DOES NOT RUN ON GOOD FAITH, IT NEEDS CASH

Don’t put all your eggs in one basket. Of course your firm provides architectural services, but what happens when the economy is down and nobody is building?

 

Finding opportunities to generate revenue aside from design projects can be tricky. Luckily there are many opportunities to add value to the development market from seminars and books to holding your own properties and developing projects yourself.

 

We all hear that the best way to make more revenue is through innovation. “Research has shown that one of the major challenges for businesses in the information era is the problem of appropriability (Davis, 2002), or the ability of a firm to profit from its investments in innovation.” (Jonnalagedda, Sreelata. “Revenue Generation in the Information Era: Opportunities and Challenges.” IIMB Management Review, Elsevier, 18 Feb. 2011, www.sciencedirect.com/science/article/pii/S0970389611000036.)

 

Which is not to say that innovation is wrong in any way, but we must be strategic. Always thinking about how we are going to use the resources and information that we gather and produce. Architects, whether we know it or not, have the potential to produce huge value outside of the buildings we design for the communities we serve. However, it is a trend in the information age (and likely before) that we give away the valuable information for free; thinking that people will pay for drawings (as stated earlier - no one wants drawings, they have other desires that our services provide).

Revenue Generation Strategy is all about finding alternative ways to add value to your market, increasing brand recognition, and reducing the barrier to entry for the cost of your premium service. Developing multiple sources of revenue for your firm will allow you and your team to focus their efforts where they make the most impact for the client - not on billable hours.

 

Benefits

  • Profit Insulation - Multiple sources of revenue generation increase profits

  • Market Volatility Protection - Multiple revenue sources lower the risk of market downturns

  • Competitive Advantage - Set you apart from the competition

  • Expertise Positioning - Positions you as the expert

  • Brand Recognition - your market recognizes your company for the value it adds

  • Experimentation Application - Maximizes your efficiencies and reduces the loss of revenue to misplaced research and development

  • Production Efficiency - Helps to develop systems that target specific services

  • Results Predictability - Helps to develop predictable outcomes for team delegation

 

Misconceptions / Mistakes

  • Multiple sources of revenue will be hard to keep up with - Most alternative revenue sources are upgrades to existing services or high value products requiring little effort after they are developed

  • Multiple sources of revenue will require many teams of people - It is unlikely that any firm will need specialists or employees that they don’t currently have (even one-person firms) to produce, deliver, or sell alternative revenue sources

  • We do not have time to focus on things other than architectural services - No company is 100% efficient, and producing these alternative can be a welcome break to the everyday grind for your team

  • Things will return to how they used to be (pre-internet, Pre-social media, pre-pandemic) - the world has never “gone back” or “returned” to anything. Your company will have to adjust to the changing environment either way, you might as well take control of your future

  • It will take too long to develop - some sources require more effort than others. All alternatives that you and your team brainstorm should be analyzed in terms of effort and returns

  • Our clients know what they need when they engage us - Some clients and developers are well prepared, but everyone is interested in better value and education.

  • We do not have time to sell other products as well as architectural services - Many revenue sources that we have helped develop either make the delivery of services easier or enhance existing services, which we will discuss further in a minute


 

Solutions / Best Practices

  • Determine where your expertise lies and the best way for you to educate your ideal market about the benefits your expertise brings to their projects

  • Break your highest value services into chunks that individually add value

  • Define a sales process in which you add value and get paid prior to engaging the client into a contract for design services

    • Consider what education your clients need at each phase that would help set them up for success in the coming phases

  • Stop thinking about what you do and begin thinking about why people want it

  • What would help a client ensure they were on their way to a successful project before they engage you?

    • What could you produce or develop to provide this solution?

  • What do your clients need to know to ensure a successful project?

  • What are the 6-8 most common questions you get asked prior to a client signing an agreement?

    • Develop an informational or value adding service for each of these issues

  • Determine your value ladder

  • Outline the ideal sales process through the value ladder