As design firms grow, their ambitions also expand. Initially, they focus on local projects and specific types of design. However, over time, they begin to explore new markets, take on different project types, and face new challenges that push the boundaries of their creativity and capabilities.
Recently, adapting to slowing geographical markets and shifting trends and typologies has become essential. This change requires a thorough reflection on current strengths, followed by the development of a strategy that clearly outlines the associated risks and rewards. This guide highlights the key considerations that every design firm should examine before expanding beyond its current market. It aims to assist leaders in making informed decisions about where and how to pursue growth.
Why?
When considering entering a new market or typology, it’s essential to clarify your design firm’s purpose for exploring the available options. If your motivation is solely to increase revenue, the firm may not thrive and could waste valuable time and resources. Instead, reflect on whether you believe this opportunity will truly benefit the company. Are there team members with valuable experience in this market or typology? Moreover, does this venture offer opportunities for training and skill enhancement for your team? Embrace the possibilities for growth and transformation.
Deciding the why is essential as it will guide the where, when and the amount of investment required.
Investment & Time
When entering a market or new typology, the firm must establish its willingness to invest funds and time. This is vital for gauging the success of the expansion. If this is not defined, it can become a burden or create pressure or disinterest within the firm.
The time commitment often outweighs the importance of financial investment. It’s essential to recognise that growth can take many years, and it is not instantaneous. Building a new business requires time, and the team and management must share an understanding of the expected timeframes and goals, such as when we expect to win the first project or when we expect to break even.
Which market or typology?
When entering a new market or typology, there is much to consider. There are many opportunities available for your design firm, but there is a need to narrow the possibilities through an evaluation process that may include questions like:
- Is the market stable? What is the current market growth?
- Does our team have experience in the market or typology?
- Are our clients working in this market or typology?
- Do we have collaborators in this market?
- Is our brand known in this market?
- What is our service offering? Can we offer the same services in this market?
- What is the process for winning work? Private or Public tenders?
- Who are our competitors?
- Are there experienced and talented people available?
- Are there language or cultural barriers?
These are the initial exploratory questions to narrow the possibilities of markets or typology. After this, you need to consider the various business operational issues, including:
- What are the country (client) regulatory requirements? (company registration, taxes, insurances, workplace, standards, etc.)
- Do you require local company directors?
- What is the banking sector like? How hard is it to transfer money to the home company?
- What are local salary expectations? What are the market-standard employee benefits?
How to enter a market?
There are many ways to enter a market or industry. Relying on a single factor, such as rapid growth, the presence of other firms, or the excitement of a city, can lead to a higher risk of failure. Therefore, it is important for your company to conduct a comprehensive analysis of each option to determine where the best chances of success are.
Some of the ways that you can enter a market include:
- Design Competitions are a possibility to enter a new market, but are a long shot at success
- Collaboration with other design industry firms (architects, engineers, etc.)
- Working alongside your home country’s or local trade department or missions
Explore your current market
Recognising that establishing a new market or typology requires a level of investment (time and funds), it may be wise at this point to take a step back and reassess your current business. Your firm should consider whether you have thoroughly explored your existing market (clients, typology) and identified any growth opportunities in your area. While it may not seem as thrilling, it could ultimately prove to be a more suitable long-term solution for expanding your business.
Seek advice
To start, consider reaching out to local designers to explore your genuine interest in the field. While you may come across some unsettling stories and challenges, it’s important to view these as valuable learning experiences. Understanding both the obstacles and opportunities can empower you to make informed decisions as you enter the market.
I encourage all firms, regardless of their size or experience, to seek advice before entering a new market or exploring a new typology. You can engage a consultant at different stages: at the beginning, during the exploratory process, or after you have shortlisted your options. A consultant can guide you through a detailed process, helping you evaluate all possibilities based on data, research, and experience. This assistance can help you avoid potential pitfalls along the way.
Entering new markets or types of projects goes beyond simply pursuing profits; it involves developing your business, pushing your team, and setting yourself up for sustainable relevance and strength in the long run. Growth opens possibilities for new perspectives and unlocks doors for greater collaboration, along with new ideas and experiences. The process will take time, commitment, and perseverance to navigate these opportunities; however, the rewards can transform both the firm and its people.
This article was initially presented as part of ArchidoGlobal seminar in Shanghai, China. Held by ArchiDogs and World Landscape Architecture.
Cover Image Credits:
Left to Right
1. Burj Khalifa & Dubai Mall Heart – Dubai | Image Credit: Damian Holmes
2. Big Ben and London Eye – London | Image Credit: Damian Holmes
3. View of One World Trade Center (Freedom Tower) from Little Island (by MNLA) – New York | Image Credit: Damian Holmes
4. View of Sydney Harbour Bridge from Barangaroo Reserve (Design by PWPLA & JPW) | Image Credit: Damian Holmes