What if the economy trundles along like it is for the entire decade? Is one of the impacts of this economic crisis going to be the death of the large design firm?
When I began my own company in 2005, I was determined to keep my business as small as possible. My hope was to do well enough to be able to select between interesting projects rather than needing to add additional employees to deal with a growing workload. At the 2006 ASGCA meeting I sought out a few of the architects, who all ran small firms, for advice. Clyde Johnston was the first and he gave me one of the most thoughtful pieces of advice any architect ever offered up, “Keep your business small, employees to a minimum and work out of your house. At some point you’ll be really grateful you did.”
Five years later I found myself dealing with one of the tougher periods in recent memory. I have weathered this storm despite having an extended period where no work was coming in. I’ve watched massive lay-offs at big firms, small firms struggle to survive, people forced to leave the business, and been grateful to survive. I was fine because I had no employees, no office, no lease arrangements and no debt. I worked out of my house, drove my own car, paid for everything as I went and ran my business with no outside help. I only required the usual yearly audit by my accountant/pirate to make sure that I had my affairs in order.
I think the business of golf architecture is in the process of changing for the long term. I’ve noticed a recent trend where companies have approached some of the remaining employees about them going out on their own. The truth is the employees don’t really have a choice. The employee is allowed to maintain a link with the original company. This allows them to still work together or have the former employer recommend them for work. The former employer is either hired as sub-contractors to the original firm or as independent by the owner if they are both working on the same project. This is a nice arrangement, but the reality is the original company needed to reduce its payroll and commitments.
Interestingly, you can see how this approach may represent the ideal future from both perspectives. The former employee will enjoy the opportunity to build their own company based around their own personal interest or skill set. They will certainly enjoy the tax benefits and may if lucky see a substantial increase in income if things go well. This may lead to the independence that some designers crave. The employer will enjoy having much more flexibility in the business, less overhead to worry about, and the chance to restructure or redirect the company if they desire.
A number of years back I watched two major designers make a major change in their business. Their firms had grown substantially and they were no longer happy since the business end had begun to dominate their lives. They dropped their staff and became much more selective about work. They still earn a nice income, are in great demand and no longer have the complications of running a large business. Their examples had an impact on my desire to be a small boutique shop.
I know through my own experience that being small does present complications on occasion. Usually the question is about how you can you possibly meet all the obligations without having a team behind you. Lately a few architects manage to deal with this by banding together by name. The company shares the two or three or even four names, but each remains independent as a business entity. They combine forces when they need each other or work independently when they don’t. This helps them deal with questions about the size of the firm or the ability to put a team in place. It’s a clever way to keep it simple and still meet the requirements of certain types of projects.
I think one of the reasons this trend is going to gain strength is that one of the most influential companies in golf design is made up of multiple independent contractors. We easily associate the group under one name, but the reality is that they are an accumulation of companies. I think the future will see hundreds of small individual businesses that have the ability to work on projects together or work on their own projects as individual. This will make the golf design business a lot more flexible and cost effective to deal with a market that will never be near as strong as when the large firms emerged.
Being small and nimble has turned out to be an incredible advantage in these tough times that we still are going through. I look at all the decisions that I made and the one that mattered the most was the decision to keep the business small enough to provide me with flexibility if things went bad. And I’m very grateful that I did.
I’m curious to see what others think will happen to the golf design business if the economy goes no where for the entire decade.