|
View previous topic :: View next topic
|
| Author |
Message |
arch1432
Joined: 17 Oct 2005
Posts: 1
|
 Posted: Mon Oct 17, 2005 8:46 pm Post subject: advoce on starting/buying design firm |
    |
|
This is still in the preliminary stages, but I may have an opportunity to take over an architecture firm at which the sole principal will no longer be able to operate the firm. I have not yet discussed any specifics, so I cannot say much about the terms of any deal. But, I was wodering if anyone might have any insight or advice for what I should be concerned about. The business has been "closed" for a few months now, but there was a steady client base prior to that. I am not sure what the status is of any ongoing projects.
Thanks! |
|
| Back to top |
|
 |
gleearch
Joined: 07 Jul 2005
Posts: 185
Location: Oakland, CA , USA
|
| Posted: Tue Oct 18, 2005 9:06 am Post subject: |
|
|
What exactly are you buying when you buy an existing architecture business?
How do you value an architecture firm? If it was a retailer you can value based on products the business owns has purchased, etc and on the revenue stream, assets and liabilitites.
When you purchase an architecture firm, you need to make sure you know exactly what you are purchasing. Is the name of the firm part of the purchase agreement. Is it a generic name or of the previous owner. If it's the previous owners name, is that what you want? If yes, is it because of name recognition and if so are you expecting the previous client base to return? Will the previous client base return mainly because of the firms name or because of a personal relationship with the previous owner.
If none of the above are factors, are you buying the business because of the equiptment, office location (does the business own the building, rent or lease, what are the terms and can it be assigned to you as the new owner or do new terms have to be drawn up?)
When you purchase this business, does it mean you also take over any liabilities as well as assetts? Clients can be considered assets, though if they are not paying they quickly become liabilities. Will debt from the business be assigned to you as the new owner?
These are just a few questions right off the top of my head. I'm sure you have thought of them already.
There are many reasons to buy a good thriving and profitable business but some things need to be considered before hand. Will the business thrive when it changes hands. Do you have a business plan or are you hoping to use the previous owners plan?
Anyway, my two cents for whatever it's worth.
Good luck.
_________________
Gerard Lee Architects
http://www.gleearchitects.com
San Francisco bay area, Oakland, CA based sustainable architecture & planning firm specializing in residential, education, commercial, community & civic projects. |
|
| Back to top |
|
|
gleearch
Joined: 07 Jul 2005
Posts: 185
Location: Oakland, CA , USA
|
| Posted: Thu Oct 20, 2005 8:09 am Post subject: |
|
|
Oh, another thought.
As far as completed projects or past projects completed under the previous owner. Does professional liability for those projects carry forward to you as the new owner? Since technically the projects are executed by the previous firm, if the firm transfers ownership, the liability may carry forward too. 10 years.
You probably should talk to a lawyer who understands the AEC field and not some lawyer who says that all law knowledge can apply. Not true.
Um, add a half cent to the two cents above.
_________________
Gerard Lee Architects
http://www.gleearchitects.com
San Francisco bay area, Oakland, CA based sustainable architecture & planning firm specializing in residential, education, commercial, community & civic projects. |
|
| Back to top |
|
|
Prabodh
Joined: 22 Oct 2005
Posts: 10
Location: USA
|
| Posted: Sat Oct 22, 2005 9:43 pm Post subject: |
|
|
Your lawyer may be able to advise you on how you could take over the brand (in this case the firm name) without the inconvenience of handling business liabilities.
Also, you may like to include in the contract that the current firm principals introduce you effectively to the key clients.
_________________
Prabodh Jain
www.VITRU.com
3D Architectural Rendering Services
(732) 361-2796
Vitru creates photorealistic computer generated 3D architectural renderings, photomontages and animations. We provide interior views and exterior views as required. |
|
| Back to top |
|
|
|
blogger
del.icio.us
digg
slashdot
