Three recently qualified Part 3 students, (including you!) have won an open architectural competition to design and see through to completion an archive and education centre building project for Leith Docks worth £2.2 million with a fee of £150,000. The project will be funded by the Forth Ports Authority. As a result of this you intend to formally start up an architectural practice in Edinburgh. Please note your examination pair are two of the three individuals who will be involved in the setting up of the practice. This exam paper makes no reference to the Covid-19 pandemic.
Question 1: Form of Business
Note from Practice Formation meeting:
We need as a fledgling practice to consider clearly our form of business options.
Our accountant has suggested three potential business forms for us to consider,
without particularly going into detail on any. Limited Liability Partnership, Limited
Company or a Co-operative.
Can you investigate the above ‘form of business’ options and provide a brief critical
appraisal of their advantages and disadvantages. Should we be considering a
hierarchical or flat organisational structure?
Are there any ethical issues we should consider in deciding on a form of business?
Look at key factors, such as business structure, professional liability, tax and
administrative duties etc. A suggestion for an analytical framework might be Overview/
Ownership-Legal Structure/ Risk/ Tax/ Perception and Future development, feel free
to add any other critical terms you might think appropriate. Conclude by making a
recommendation as to which ‘form of business’ we should adopt and how this might
shape the future direction of the practice.
Question 2: Job Programming & Fee Management
As this is our first project and we will shortly incur all of the set-up costs for the practice, we really need to ensure that this job is a profitable one. Can you please write a brief memo to summarise the office management procedures we can set-up to analyse the profitability of the project as it progresses?
Can you also please refer to the RIBA Plan of Work 2020 to prepare a simple Gantt chart programme for the pre-construction stages of the project using the attached pro-forma? Please use the colour coding in the key and add some figures in the boxes outlined in black. Note that I’ve already added some formulae in the spreadsheet to assist you (cells containing a ‘0’). Assume that our practice will be up and running in February 2021. Can you indicate on the chart the estimated number
of resources (hours by each staff member) for each of the job stages and therefore how much of our £150,000 fee we should charge for each stage? As discussed at our recent meeting construction work is scheduled to start in February 2022; we will not employ anyone else at present; we expect to allocate 70% of our resources on the project to the pre-construction phases; the cost to the office for each of us is £50/ hour; and our target profit on the project is £10,000. Keep in mind that we may need to work some overtime initially to revise the concept design, following recent changes to the client brief, but all three of us can’t work full-time on the project beyond this stage. We expect the Planning Permission and Building Warrant applications will take up to four months each for the Council to process. Please use the attached spreadsheet.
Question 3 – Getting Work
Obviously we are delighted to have won our first commission and we look forward to working on this in the coming months. We have also been approached by a family member to design a house extension in the Borders, including some internal alterations to the existing Victorian property. All new work is welcome!
But we need to now ensure that we continue to attract more work on a regular basis and we need to devise a set of clear and carefully considered methods for getting that work in.
I wonder if you could write a short memo on the development of a ‘Getting Work’
practice-strategy. It should include both general points on good practice and any
specific targets we should have.
(End of Questions)