Summary: With consumer confidence low, credit uncertainty high, materials prices on a roller coaster ride, and international tension continuing, the AIA convened a Web seminar September 24 to address “Strategies and Tactics for Architects in an Economic Downturn.” The 90-minute Webinar covering the overall picture, firm financial management, staffing strategies, and market positioning is now available on line.

The live Webinar features AIA Chief Economist Kermit Baker, PhD, Hon. AIA; CMMI Managing Principal Robert Smith, AIA, LEED-AP; RM Klein Consulting Principal Rena Klein, FAIA; and Perkins Eastman Associate Principal David Koren, Assoc. AIA, CPSM.

Slow growth for a while longer: The economy has been growing extremely slowly in 2008, Baker points out. And, based on the Architectural Billings Index, 2009 could present financial obstacles. With inquiries stabilizing to some extent, there is hope for billings to follow suit, and it is critical that firm principals keep a close eye on the progress of their current and backlogged projects as well as developing market trends.

Cash is your lifeblood: Marketing, collections, and cost control are the three most important concerns in a destabilized market, advises Smith. In times such as this, “cash is the lifeblood of your firm,” he says. If you haven’t established a line of credit, work on that right now and establish a relationship with a bank you can trust. He also offers four financial yardsticks to watch: project backlog and pending proposals, aged accounts receivable, monthly breakeven (how much it costs to run your business, excluding profit), and utilization rate (billable to non-billable hours). He also presented tactics to overcome flagging yardstick performance.

Your staff are your allies: To manage staff in a downturn, you must think of every member of your firm as your strategic allies, Klein says. The principals make the decisions and yet they have to be open to the idea that any one person can have ideas on cutting costs, expanding services, or bringing in clients. Layoffs are a last resort, she says, and, for small firms, whenever the yardsticks show that cash reserves and backlogs are getting unsustainably tight, consider laying off your office instead of staff by creating a virtual office.

Most of all, don’t panic: Consider compensation packages as part of your long-term overhead when considering whether it’s time to lay off personnel, advises Koren. The market will pick up again, and you don’t want talented people out there with bad feelings toward you. Most of all, he says, don’t panic. Know your business, markets, position, and competition. Engage in SWOT analysis (strengths, weaknesses, opportunities, and threats) within your firm and with clients and consultants with whom you have good relations. Spend your resources wisely. Network and find strategic partners. Architects are problem solvers, he says, Use that ability now with your eyes wide open.