Managing both time and money effectively is perhaps the most challenging aspect of running an architectural practice. Whether you're a solo practitioner or managing a growing firm, understanding how to allocate these precious resources can make the difference between thriving and merely surviving. These two fundamental templates provide a starting point for structuring your practice's operations, but remember—every firm is unique, and you'll need to adapt these templates to your specific situation.

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Why Resource Allocation Makes or Breaks Architectural Practices

For architects, two critical resources demand careful management: time and money. While both are essential, time allocation typically proves more challenging yet ultimately more impactful on your firm's success. Why? Because time is the main determinate of profitability. Once spent, it cannot be recovered.

The templates we'll examine are built around two key assumptions: a 3:1 ratio between income and labor costs (known as a 3.0 billing overhead factor) and approximately $150,000 revenue per employee. These benchmarks have proven realistic for many successful small-firm architectural practices, providing a solid foundation upon which to build your resource allocation strategy.

These templates intentionally exclude consultants, reimbursable expenses, and contract workers to maintain clarity and focus on core operations. Including these elements would complicate the model without adding proportional value for most firms.

Understanding Time Allocation: The 66/34 Split

Time Allocation Example

The time allocation template reveals a critical insight for small firm architectural practices: successful firms typically maintain approximately 66% billable time versus 34% overhead time. This 2:1 ratio supports the 3.0 billing overhead factor mentioned earlier.

Breaking down the overhead categories shows where your non-billable hours should be invested:

General office tasks (11.5%) - Including record-keeping, correspondence, and library management
Paid time off (8.7%) - Averaging about 180 hours per person annually
Business development (5.3%) - Marketing, networking, and proposal development
Software management (2.4%) - Training, updates, and system maintenance
Special projects (2.4%) - Pro bono work and developing new capabilities

The remaining overhead is distributed across bookkeeping (1.2%), finances (1.0%), professional development (0.6%), facility management (0.5%), and benefits administration (0.5%).

This template was developed by calculating hours based on my experience in my firm, then deriving the percentages. You can customize it by adjusting staff numbers and average hours to match your specific situation. Then further update the allocated hours since we are all unique.

Money Allocation: Following the Dollar

Money Allocation Example

The money allocation template provides a comprehensive breakdown of how architectural fees are distributed across various expense categories. Built on the assumption of $150,000 revenue per employee, this template offers a roadmap for financial sustainability. Adjust this revenue/person amount to suit your experience.

For a five-person firm generating $750,000 in annual (net) architectural fees, the allocation breaks down as follows:

Direct labor: 33.33% ($250,000)
Indirect labor: 8.50% ($63,750)
Payroll expenses: 13.00% ($97,500)
Facility costs: 10.00% ($75,000)
Insurance: 8.00% ($60,000)
Project management: 4.00% ($30,000)
Business management: 3.00% ($22,500)
Various smaller categories: 3.50% ($26,250)
Profit: 16.67% ($125,000)

Unlike the time template which started with hours, this template began with percentage allocations based on my experience, then it calculates the corresponding dollar amounts.

I did some research to determine that revenue per employee typically falls between $130,000 and $180,000 across small-firm architectural practices, with $150,000 representing a middle ground.

Customizing Templates For Your Practice

The templates serve as starting points, not rigid prescriptions. Every architectural practice operates within unique circumstances that will necessitate adjustments. Consider these factors when adapting the templates:

Geographic location and local market conditions
Firm specialization and project complexity
Staff experience and expertise levels
Technology integration and efficiency
Current phase of business growth

To customize the time allocation template:

Start by evaluating your current billable versus non-billable time
Identify categories where you're significantly above or below benchmarks
Set realistic targets for incremental improvement rather than attempting dramatic changes
Implement tracking systems to measure progress
Review and adjust quarterly

For the money allocation template:

Calculate your current revenue per employee
Compare your expense percentages against the template
Identify the largest discrepancies for focused attention
Develop a phased approach to bring outliers closer to benchmarks
Monitor changes in profitability as you implement adjustments

Implementing These Principles In Your Practice

Successful implementation of these resource allocation frameworks requires both commitment and consistency. Many architects excel at design but struggle with business management—recognizing this challenge is the first step toward improvement.

Start by honestly assessing your current situation:

What is your actual billable time percentage?
How does your revenue per employee compare to the $130,000-$180,000 range?
Which overhead categories consume disproportionate resources?
What is your current profit margin?

Next, identify the highest-impact changes you can make:

Increasing billable time through improved project management
Reducing administrative time through technology or outsourcing
Adjusting your fees to align with the value delivered
Implementing more efficient systems for routine tasks

Remember that sustainable change happens gradually. Focus on consistent improvement rather than overnight transformation. The most successful architectural practices continually refine their approach to resource allocation based on evolving circumstances and goals.

Ready to implement these principles in your own practice? Download our free customizable spreadsheet templates that includes both time and money allocation frameworks. This tool will help you track your resources against industry benchmarks and identify opportunities for improvement.

[DOWNLOAD FREE SPREADSHEET TEMPLATE]

By thoughtfully managing both time and money allocation, you can build not just beautiful architecture, but also a sustainable, profitable practice that supports your creative vision for years to come.

2 Rules Of Thumb For Architects To Allocate Time And Money