Starting to Rebound

We just closed off 2009. We had an 18% reduction in revenue compared to our top year 2008. For the first 6 months we had reduced our cost by 30%, but our outlay in the second half year crept back up, because we have been investing in the latest technologies and we have hired more staff. We are back to our modest, but strict maximum size of 15.

2010 seems to start "good". We have fewer projects, but bigger ones. However, less projects is also less stability. We will see.

 

Yesterday, I was talking to a relative/partner at HKS, homebased here in Dallas.

Their last big-big project was the new Cowboys stadium; now they're treading water with smaller work while working on developing in "emerging markets"...they've opened offices in Dubai, India, and Shanghai.

Highrise spec office-space construction is dead in the water, as is luxury highrise condo work. Healthcare is good, educational good, corporate work good.

Me...I'm taking requests for ceiling moldings, front door treatments, and chimneypieces.

 

I hope you are right, but i wouldnt be suprised if we see a very slow recovery taking several years to build up any real steam...hopefully we have hit the bottom at the very least, but I wouldnt be shocked to see a double dip recession either...i have little confidence in the current adminstration and congress actions...remember, it took 14 years to recover from the 1929 depression, in no small part to part inept government laws that only prolonged the angony... I do see a parallel here....

 

....not a bad idea; hopefully not too late to the ball......was in Shanghai last month; construction is still gangbusters (big Expo coming), competition for both design and construction projects is fierce, some design offices profiting very little on work out the door.....if they have staying power they might be good......

In Hangzhou a friend did 2 restaurants gratis to keep a developer 'in his pocket'....we'll see....
A Canadian acquaintance is returning from Dubai after closing a studio that did 2 large resorts; neither will be completed any time soon.....

 

I have essentially walked away from my firm. It was a difficult decision to come to, especially since my name is on the door, but it was a definitive crossroads situation. Our billings were down 66% from last year and we were faced with crushing office space leases in our Chicago and Pasadena offices. My partner and I reached an impass on what kind of projects we would concentrate on moving forward, so I declined to continue to collateralize our credit lines and leases with my personal assets. I have promised myself that moving forward I will take on only design projects that interest me, and I feel like it's a great new day dawning. For the moment I'm enjoying the family and will soon be tearing the Dino apart to install a new starter. The there is a brake job to do on the Mangusta and a bunch of things to do on the GT40. I feel great about the future, and I'm already getting calls from people who want to discuss work.

 

sometimes out of adversity comes opportunity.....good luck, and have fun!


Tritone

 

Daryl,

Way to go. Don't let the office dictate what you have to do.

 

No recovery here in Florida. I have closed in a few porches in 2009, hopefully there will be a bathroom remodel for 2010! The normal good year gross revenue was around $400-500k, 2009 had $2,450, about a 99.5% drop in the gross fees. If I make $3,000 gross this year I guess technically my recession is over.
I'm going to do some custom woodwork installs starting next week (as a laborer).
Feast and famine is deadly accurate in this business.

BT

 

It is defiantly hit or miss in the Powersports industry(Motorcycles, ATV, Watercraft, Snowmobiles) The last 2 shops I worked at are down over 50%. The current shop here in MT is down about 4% in sales but service is through the roof. But on the flip side our competition here in town lost Yamaha due to poor sales and unable to pay the bills.

 

Bill, Hope things will improve in 2010.

 

Bill,

Sorry to hear that. I did not know it was that bad in your neck of the woods.

 

Best wishes and sympathies, Bill.

Regarding famine: Been there with 1985-1999 S&L crisis and simultaneous oil bust here in TX. After Christmas '87, my wife and I had $20 in our personal checking account, $0 in business account with a $1700 receivable due in January '88.

Soon after, I took advantage of the good old boy network and found contract work with other architects until back on my feet, then reopened a small office in 1992.

The silver lining in your cloud is your reputation. The phone will start ringing again, and the feast will resume.

 

Thanks for all the positive support! There is no doubt that 2010 should be better for me than 2009. Mathematically it is almost certain. I'm still on the fence about whether I should just start a new career, or if I should hang in there and give architecture a chance for another 12-18 months. I've seen recessions before but this is way beyond a normal recession (at least in south Florida). I think I will look at 2009 as a sabbatical!

BT