EntreArchitect Podcast with Mark R. LePage EA210: Lessons Learned from Investing in 15 Architecture Firms with Todd Reding of Charrette Venture Group [Podcast]
Lessons Learned from Investing in 15 Architecture Firms
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One of the most surprising things about small architecture firms is how similar we all are. We’re all struggling with the same issues and trying to contribute to the world the best that we can. Charrette Venture Group invests in small firms, partnering with us to address the issues we face and helping us to plan for success.
This week at EntreArchitect Podcast, Lessons Learned from Investing in 15 Architecture Firms with Todd Reding of Charrette Venture Group.
Background
Todd Reding is the President and CEO of Charrette Venture Group. Todd has been a guest of the podcast on EA103: 3 Roadblocks Experienced by Every Entrepreneur Architect and What To Do About It [Podcast] and EA151: How to Grow Your Architecture Firm [Podcast].
Charrette Venture Group (CVG) is a firm that provides a wholistic approach to building a business; they provide services from management, leadership, finance, marketing, business development, and more to architecture firms who are seeking to build a strong business in the design space.
CVG’s mission is to be the best company in the world to help small architecture firms become stronger and more profitable businesses. Their eleven-member team is all based virtually, ranging from Mexico City to London. They work with small firms on every aspect of their businesses except the actual design work.
Todd’s background is in the entrepreneurial world. With an MBA from Northwestern University, he’s has been involved in starting and running businesses throughout his whole career.
What’s the biggest experience you’ve gained working with small firms?
The most surprising thing as Todd has learned more about this space is the depth of the relationships with each firm. The CVG team cares deeply about each investment partner, and truly gets invested across a long period of time.
All 15 firms have a very close, trusting relationship. Interactions at times are very honest and direct, sometimes telling firms what they don’t want to hear.
The firms CVG partners with are totally trusting and focused on growing their firms and earning a profit so they can do the design work that they’re passionate about.
Is this investment an equity deal?
CVG is paid a percentage of the architecture firm’s revenue instead of an equity stake. They look at the board and figure out how they can increase the revenue of the firms that they’re partnering with.
What tips do you have for those trudging through finding good client fits for their firms?
Check out High Performance Habits: How Extraordinary People Become That Way by Brendon Burchard. It can be a little sale-sy, but there are some great lessons in the book. One of them is the clarity of focus and creating a clear idea of what you want to accomplish.
Among all the firms CVG has worked with, that’s been the greatest challenge. Architects are great at focusing on details, but, when you’re running a business, you have to make sure you’re focusing on the right details. CVG helps firms have a clear understanding of what they do and don’t need to focus on.
Do many firms have a business plan in place when you first meet them?
Most firms have put little to no effort into planning out their business. Sometimes they have budgets or revenue plans, but they aren’t sure where it fits into market segment, project types, and more. Operationally, how are you structuring your budget so your marketing and business development dollars are allocated by each market type and segment to achieve your goals?
CVG works to understand the efficiencies of the firms. Your revenues can be up, but profits are down. Why is that? Are you making sure that everyone in your firm understands the budget and allocated hours for each project? What’s expected at each phase of the project?
What is the Architecture Business Plan Competition?
The Fourth Annual Business Plan Competition encourages small firms to put together and submit their business plans. CVG wants small firms to spend time creating high quality business plans.
Registration asks a few simple questions, such as:
- What’s the vision for your business?
- What are your projected revenues for 2018?
The goal is to ask specific questions about where your business is headed. Then, four jurors review submissions and select 15 semifinalists. The semifinalists will each be interviewed about their plan and the lifecycle of their business, as well as receive feedback from the jurors. From those 15, there will be 5 finalists who present their plan on a video conference and pitch their full business plan. The jurors will select 1 winner, who is awarded over $5,000 in cash and prizes, including round trip airfare and hotel in New York City during the 2018 AIA Conference on Architecture.
Anyone who currently owns or plans to start an architecture firm within the next year. You must have a listened architect on your team and be located within the US or Canada.
Registration is free and all submissions are confidential.
Deadline for registration is March 26, 2018. For more information and to register, click HERE.
What do you have going on for AIA 2018?
CVG is currently working on a space near the that’s exclusive to small firms. EntreArchitect will have a presence there, and the entire CVG team will be in New York for AIA 2018 with programs that are appealing to small firms. Come connect with other small firms and create community. Stay tuned for more information!
Connect with Todd online by visiting Charrette Venture Group online, or by connecting on LinkedIn, Facebook and Twitter.
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