Sydney recap – The engine of growth

Jennifer Crawford , 3 July 2023

The ACA was delighted to host the first Business of Small Practice (BoSP) event in Sydney last month, featuring keynote speaker Warwick Mihaly and a fantastic panel who generously shared their experiences and advice. Jennifer Crawford provides a recap.

On a crisp winter’s evening, the attendees at the first BoSP event in Sydney found a discrete door on Campbell Street in Surry Hills and headed downstairs to what you would expect to be a comedy club or funky bar rather than the venue for a formal CPD event.

Over the next hour, the indomitable Warwick Mihaly entertained us with stories, ideas and lessons about how his 13-year-old practice in partnership with Erica Slocombe has grown and developed over time. This business is what Warwick calls: “The most important project of our lives”.

It was a refreshing presentation to have the nature of the business of architecture laid bare rather than purely architectural hero shots of projects. Rest assured, there were beautiful shots of wonderful projects too, but that was secondary to the discussion about business and growth.

Warwick was extremely generous in sharing knowledge and numbers as well as his views on mission statements, diversification and “spreadies” (the term he is trying to get into the vernacular for spreadsheets).

Mihaly Slocombe has grown over the years to an office of nine including the directors, architects, a practice manager and architectural assistants. While their projects have been predominantly residential in nature, they have sought to diversify into other areas of practice and have completed other types of projects, such as public buildings and educational facilities.

Warwick professed to love counting things and so shared data such as the amount paid in gross wages over the 13 years and how many project hours were spent, as well as the proportion of projects that end up being built. Hint: it’s 27%.

He then posed a series of questions to the audience:

Why are we in business?

Are we architects to be in business or are we in business to be architects?

What is creative business?

Why grow?

The answers to these questions for Mihaly Slocombe included achieving financial security, decent salaries, and for the business to be a vehicle for creating purpose, wealth and happiness. It was also the opportunity to “buy all the best equipment” – a reference to conversations held with winemakers in Italy. (It’s a bit of a long story.  You’ll need to ask Warwick.)

While the growth of Mihaly Slocombe has at times been unplanned, reactive and intuitive, another suggestion for the audience was to consider their ideal practice size.  What would you like it to be? Working out an organisational chart to suit that size would assist in making future growth more planned, proactive and rational.

Considering recruitment is also critical. Is it junior staff that need training and constant supervision or is it staff with complementary skills that can address different aspects of the business? Potentially, using part-time employees at different life stages can assist with different parts of the business, not just necessarily design where the directors may actually be faster and more efficient.

This also addresses the question of ‘Who?’, not ‘How?’ While many practice owners may be looking at questions such as how to win new work, how to set up the necessary systems, and how to competitively price services, it may be more of a question of Who? Who can help do all those things?

Are bigger projects better? Small projects come with small problems, but big projects come with even bigger problems, such as the on-again off-again nature of larger projects and how long it can take them to get off the ground. In these cases, cashflow is king. Diversification of projects and client types (not keeping all your eggs in one basket) was also seen as a method of providing economic insulation with the cyclical nature of the economy.

But how do you win one of those projects in an alternative sector? Warwick mentioned that sometimes it comes down to luck and being ready. Having a LinkedIn profile that shows you are ready when a new project officer needs to find a large list of architects for a series of projects in a hurry. They need bodies. As Warwick said: “We can be bodies”.  Indeed, it is these smaller but strategic projects that can lead to repeat or larger projects.

In saying this, another key element to successful growth is deciding what to say no to. It’s a matter of determining what is or isn’t the right fit for the practice. At first, the Mihaly Slocombe team were submitting applications for tenders that may or may not have been suitable for the practice. After some focused attention on who in the business was putting together those applications and deciding exactly which projects were more suitable, the success rate of the applications went up to around 24%.

The next challenge in the growth process for Mihaly Slocombe is slowly shifting between gears. The practice is no longer small but not yet big. This transition comes with its own challenges of cashflow and deciding which projects will really work for the practice. “Growth is good but thorny,” says Warwick.

 

Following Warwick’s presentation and after a quick drink and pizza break, he was joined by Lee Hillam of Dunn & Hillam Architects, Sandra Furtado of Furtado Sullivan and Steve Kennedy of Kennedy Associates Architects for a panel discussion with some knowledge sharing of the growth journeys of their practices.

A great discussion and Q&A session ensued, with Lee discussing the practice principles and rules acting as bumpers in a game of 10 pin bowling, so that you know what to say no to in order to keep on the path that works best for you.

Both Steve and Sandra talked about the idea of trust with clients and how important that was in maintaining client relationships, successful projects and repeat projects.  Steve also mentioned about treating people the way in which you’d like to be treated. An oldie but a goodie. Steve also had a slightly different take on saying no in that some projects come from surprising sources and could potentially provide that life-changing moment.

To wrap up the night, what would our panel do if they had to start all over again? Lee would employ a great admin person very early on to handle a lot of that work that isn’t the best use of a designer’s time, Warwick would like less ad hoc growth in his business, and Steve still thrives on the risk.

So much to consider and a great night was had by all. See you at the next BoSP presentation!