STAGE 2 THE OUTLINE BUSINESS CASE

STAGE 2
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This work stage deals with the preparatory work needed prior
to developing a detailed business proposition, including SWOT
analysis, advice, market research and training. A business plan
should start to develop, including the second iteration of the
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equivalent to preparing a sketch scheme. It investigates and establishes the
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SWOT analysis
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well-tried and understood means of assessing where you stand and where
you might go. It can be carried out by an individual working alone, but
is also ideal to develop as a group, either in a structured discussion or
brainstorming session. Involve anyone who you think might be able to
contribute or could have a stake in the success of the practice. Tackle each
section on its own and do not let either pessimism or optimism get the
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PEST(LE)
Political, Economic, Social, Technological, (Legal), (Environmental).

STEEPLED
Political, Economic, Social, Technological, Legal, Environmental or
Ethics/Regulatory, Demographic.
de Bono’s Six Thinking Hats (www.debonothinkingsystems.com)
White (Pure facts, logical), Green (Creative),
Yellow (Bright, optimistic, positive), Black (Negative, devil’s advocate),
Red(Emotional), Blue (Cold, control).
Heptalysis
Market opportunity, Product/solution, Execution plan, Financial engine,
Human capital, Potential return, Margin of safety.

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STARTING A PRACTICE A PLAN OF WORK
Example SWOT analysis
Background
A number of locally experienced architects are joining forces to set up a new
partnership. There is the prospect of reasonable work from a previous client and
they have been offered workspace on a business park.
Evaluation
Strengths:
• Strong skills base developed from years
of working on major projects for other
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• Good contacts in the development sector
• Complementary mix of skills between
proposed partners
• Expertise in cladding systems and
education design
• Good computer skills including BIM
• Good local knowledge
• Hard-working ethic
• Business nous
• Active online presence – with many
followers
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Opportunities:
• Major house building programme locally
– growth area
• Good relationship with local newspaper
might lead to regular publicity or even a
column
• Contact with previous client suggesting
potential £500,000 project
• New local breakfast networking club
proposed – opportunity to join at start
• Local ideas competition for town centre
improvements
• Campaign for new arts centre – could
offer pro bono design assistance
• Friendship/working relationship with
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projects
• 2IIHURIRQJRLQJSURMHFWZRUNIURP
previous employers
• Part-time teaching job available
• Semi-retired local practitioner willing to
act as practice mentor.
18
Weaknesses:
• No previous experience running a
business and little knowledge of business
procedures
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• Proposed partners all of a similar age and
background
• Lack of expertise in housing sector – the
most likely source of work
• High expense of maintaining licenses for
drawing software
• Low capital base (need to get healthy
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• Imbalance between partners and staff
(currently no staff)
• Potential embarrassments in online past
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Threats:
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dominate most of the available work in
the vicinity (includes previous/current
employers)
• Major projects in the area tend to be
included in county-wide framework deals
• 2QO\HQRXJKIXQGVWRVXUYLYHIRUQLQH
months without fees to cover overheads
• Local planning authority relatively hostile
to innovative/modern proposals
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stay at current practice to work on major
arts project
• Most likely potential client is in
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 STAGE 2 THE OUTLINE BUSINESS CASE

Assessment
There are adequate saleable skills among proposed partners, but
the local area appears problematic, both in applicability of skills to
local needs and the degree of market share in the hands of potential
competitors. The partnership may need to look outside the immediate
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Current skill areas, including familiarity with working in BIM, need to
be kept engaged if they are to remain an asset. (Note: the location is an
area of growth and so will need to expand its school provision in time).

Local clients may be persuaded over time, but they should not be
relied on for immediate income. Marketing initiatives are potentially
worthwhile, but the amount of time and resources they absorb must be
carefully controlled. Alternative sources of income at early stages may be
key to long-term survival. Thorough investigation of local opportunities
may be useful – the mentor could be very useful for this. It will be
important to develop new areas of skills to better match the future
needs of the locality.

Actions
• Look for job opportunities within current areas of expertise, but be
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• Run credit check on potential client(s).
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• Develop marketing strategy, including competitions, etc.
• Start practice blog with regular twitter feed – remember to monitor.
• Network and make contacts.
• Explore opportunities for getting into local supply chains and
framework deals.
• Improve understanding of long-term potential of local area (consider
taking on mentor on a consultant basis).
• Look into options for using cloud-based computing services.
• Consider alternative part-time employment (teaching, etc.) while
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for initial period.

19
STARTING A PRACTICE A PLAN OF WORK

Market research
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into the potential market for your services. This research will continue
throughout the life of the practice, but at this stage it should still be
relatively straightforward to get the type of information you need before
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Your main interest will be in the size of the market and the range of
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able to help you with this, both your own advisers and others, including
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prepared to offer advice, despite some of them being potential long-term
competitors.

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include the planning applications area of local authority websites, property
ownership data from the Land Registry (www.landregistry.gov.uk) and the
records of government grant schemes (see www.gov.uk/browse/citizenship/
government/government-funding-programmes).

You will need to size up the strength and character of the competition
you are likely to come up against. This will be relatively straightforward if
you are proposing a rural or town practice based on the local area, with a
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host of specialties and peculiarities.

Consider your network of contacts and how to maintain and develop this as
a source of work. Even for the largest practices a large proportion of work
comes through people they know and meet regularly – this is even more
important for small and vital for start-up practices. Tapping your friends
and family for work may be a painful prospect, so discover how to grow
your contact group to reach your preferred market.

This is a time for wide-ranging discussion and exploration, not only to

evaluate your potential market, but also to discover how the type of
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20
 STAGE 2 THE OUTLINE BUSINESS CASE

Advice
Get advice. This is worth saying again. Get advice. It comes in many forms,
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good, some well-meaning and some downright bad. You will need enough
advice to be able to tell the difference and to make your own judgments,
without being overwhelmed by different voices.

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an essential part of your business set-up (your bank manager, solicitor,
accountant, etc.), and with whom you may choose to stay associated
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published sources, business presentations and courses, as well as from
government-sponsored programmes such as the Business Support Helpline
(see www.gov.uk/business-support-helpline) and the Start Up Loans
Company (www.startuploans.co.uk).

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to promote themselves. The quality and applicability of advice will vary
considerably.

Business training
From your preliminary analysis, of both your current skills and the market
you are planning to enter, you may decide that it would be useful, or even
essential, to get training before or soon after you start your business. Some
practitioners have put themselves through rigorous management courses or
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shorter courses.

There is a wide range of courses available, including business seminars

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such as marketing or running an effective practice. General business skills
training packages are also provided by many organisations including banks,
colleges and universities as well as private companies. If your education
to date has been mainly architectural, then it is more than possible that
you will not have had any business training to speak of, and this may be
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it only helps you to better understand your future clients’ thinking and
motivations.

21
STARTING A PRACTICE A PLAN OF WORK

Investment and risk

Your initial budget analysis will have generated questions about your
start-up costs, including equipment costs. You need to begin to plan your
strategy for this. Are you going to start small and cheaply and build up
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you want to get going with a big splash, investing heavily and showing real
commitment from the outset – death or glory! – or will it be somewhere in
between? The same will apply to your choice of premises. If you start from
a room at home there is every chance you will get stuck there, but if you
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Taking into account the advice you have obtained, work out how much
you are prepared to risk to get your new business off the ground. What
level of investment are you prepared to put in and how long can you go
before you start to break even and begin to pay it back? Are you willing
to re-mortgage your house to provide investment, or even risk losing it
altogether if the business fails? This is a sensitive area that needs to be
discussed with all those potentially affected, including family as well as
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not only the size and scope of your plans, but also the business model you
ultimately decide to use.

The outline business case (OBC)

By this stage you should be starting to see the shape of your proposed
business, if only in outline. Commit it to paper, describing your aims and
goals and how you envisage the character of the business, its ethos and
style. Who will be its clients, and where in the market will it sit? What are
the timescales and intentions for growth/stability? Where would you like
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general and aspirational, other parts more precise and thought out. Not
too much detail is required in the plan at this stage, but it should include
a further iteration of your cost plan, as you accept or reject options for the
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22
 STAGE 2 THE OUTLINE BUSINESS CASE

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• Strategic objectives
• Proposed key personnel, skills and strengths, past successes
• Proposed advisers
• Services to be offered
• Market for services and barriers to entry
• The competition
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• Threats and risks
• Business strategy
• Proposed business structure and management skills
• Marketing approach
• Training plan
• Growth plan
• Staff recruitment and requirements
• Premises and equipment
• Financial plan and projections
• Investment required
• Sources of potential investment
• Long-term aims.
These topics will be developed further in Stage 3, The Business Plan.

23
STARTING A PRACTICE A PLAN OF WORK

CHECKLIST
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• 'RD6:27 VWUHQJWKVZHDNQHVVHVRSSRUWXQLWLHVWKUHDWV DQDO\VLV
• Seek advice.
• Carry out market research – into both services required and the level
of demand for them.
• Size up and understand the potential competition.
• Assess your own skills and knowledge and get appropriate training to
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• Establish a basic risk and investment strategy.
• 3UHSDUHDQRXWOLQHEXVLQHVVFDVHIRU\RXUSURSRVHGœUPGHVFULELQJLQ
general terms your approach to all aspects of the business.

24