Employee vs. Self-Employed Architect

“I like beer, so I decided to try making it myself. I bought special tools for home brewing, found a recipe, and purchased the necessary ingredients: hops, yeast, and grain. Sounds simple, but the whole process was not like that at all. Questions piled up: how long to grind the grains? At what temperature? Is the tank sealed enough? And on and on. Everything had to be prepared with a lot of work, and after 3 weeks, the beer was fresh and ready to drink.
In the end, it was fine, neither great nor bad. If I had continued, it would have gotten much better.
I learned that just because I like beer, it doesn’t mean I have to own the place that makes it.
The process of opening a business in architecture is similar. Do you have to be the owner of the business to enjoy architectural design?
You need to understand what the process means and only then decide whether to make the transition from employee to self-employed.”
From the book “Architect+Entrepreneur” by Eric Reinholt

Simultaneously?

It is not recommended to be an employee and work as an independent at the same time. This is the situation for an amateur entrepreneur who is truly unfree. Financially, he is not dependent on his business, and therefore does not invest all his time and effort into it. There is a desire only for short-term success – completing a certain job, rather than building a business and striving for long-term success. If you’ve made a decision, then don’t tread on water – jump into it.

Jumping into deep water is indeed scary, so you should think about the worst thing that can happen if the move doesn’t work out. It is important to understand that starting an architecture business does not involve huge financial investments. It requires some thousands of shekels. Failure will not lead to financial collapse, but perhaps to ego damage. In the worst case, you can go back to being an employee.

The Difference

Moving from an employee architect to a self-employed means changing attitude towards the process of creating architecture. The transition requires taking on additional roles as a business-man/woman, in addition to being an architect. Something that is not taught at all in architecture studies. Establishing a business requires self-development and learning an entire world, which you did not deal with as an employee: account management (income, expenses, invoices, collection, salaries), marketing, employee management, renting an office, purchasing computers and softwares, brand-logo and business card design, establishing a website, office standards, and more and most importantly, it requires the ability to get projects.

An employed architect is not burdened by administration and financial pressures, but rather by the pressure of work and schedules. The projects arrive at his desk, usually together with preliminary sketches for their development from the owners of the office.

An independent architect, on the other hand, can express his thinking and design. He can also choose, at a certain point, the projects and clients he wants. With great power comes great responsibility, and he is fully responsible for design and supervision of its construction. There is no one to fall back on.

The Time

An employee has a fixed, relatively balanced schedule. A self-employed person has more flexibility to manage his time, to decide when to come and go, but in practice, responsibilities and clients require high availability, and there is a danger of blurring the line between private and business life.

The transition from working as an employee in a large office to a small independent office, at least in the beginning, requires adapting to both professional and social changes.

Money

The employee has relative job security, with a fixed salary that increases over time. However, employees in senior positions face a glass ceiling, which is not high in the architecture industry, typically around 15-20 thousand NIS. This amount is low for the most senior and experienced employees in their field relative to other professions.

A successful self-employed has the potential to earn large sums from their work. They can surpass the salary cap but are doomed to anxiety and financial uncertainty throughout their journey. Sometimes, a partner can provide assistance in carrying this burden.

You should know that in Israel today there are no social rights for the self-employed – there are no unemployment benefits or social security benefits from the National Insurance like those for employees. In the case of a difficult period or when the business is closed, the self-employed have no support from the state. Moreover, the self-employed also lack rights granted to employees by employers, such as: a fixed payment at the beginning of the month, vacation and sick days, recovery pay and mandatory pension provision. They are solely responsible for their own conditions.

The business meaning of independence is to earn money not only for personal working hours (money for time) but also to build a profitable resource over time, similar to investing in stocks or real estate, including the risks involved. However, the vast majority of architecture firms are still service providers who make money by selling work time, experience, and professional talent. They do not earn money passively.

Social and technological changes can lead to the creation of new models in the labor market, beyond the conventional division of employee and self-employed. These may include more flexible remote work options, freelancing, part-time jobs, and joint shareholdings in businesses.

Therefore, deeply consider if and when you take the plunge. Recommendations for the first steps to opening an office in the next post.