Any studio leads here? I have managed several departments, mostly geared towards architectural software and training. The 3D side has always been my baby, but it is time to let it go and start mentoring. I accepted an opportunity to start a visualization department at a large architectural firm. So, we’ll be doing in-house renderings for in-house projects and outside projects. I have a great opportunity with strong backing. I would appreciate any tips from the department lead folks.
Congrats! Very happy for you, and good to have more job security at a time of industry uncertainty. Are you going to be doing the interviewing and hiring for new roles? Personally Id say that was the biggest thing whenever Ive been a senior / lead in any place, making the sure the influx of talent was a good fit, setting the right culture from the start.
What made you choose to leave your own practice?
Yes, I will be hiring and firing. I ran a few departments, but I was never given the power to hire/fire.
For 12 years, I have been so busy, it has been crazy. I always had at least a two-month backlog, and I probably took on more work than I should have. Two months ago, I was working on my last scheduled project with several leads, but nothing was signed. I usually have more leads, and they sign right away. I went into panic mode, thinking I could have no work by the end of the month. It lasted for two weeks, and more leads came in, and all signed, so I have been buried for two months, as usual. The experience was pretty terrifying for me. I stumbled across a listing for a director’s position, and on a whim, I applied, really thinking nothing of it. Well, they called, and after a week, I was hired. Today, I have one project to finish, all of my leads have been placed onhold, and I have nothing scheduled for next month - the first time in 12 years.
My mind was going towards looking for full-time work when my wife’s insurance changed. We went from her work covering her and 1/2 of me to them covering 1/2 of her and none of me. Plus, rates tripled. I have been uninsured for six months, and I am not getting any younger.
Having said that, February is always my slowest month, and, as a couple of months ago, I am sure the floodgates will open again, and I’ll be flooded. If 1/2 of my leads move forward, I would be booked for a couple of months. Working for yourself takes thick skin and isn’t for the faint of heart. You know, how will I get this work done, too, will more work comes in, and the cycle repeats over and over?
Thank you!
Wow. That’s scary.
Maybe it means your clients are testing ai, but some find that it still takes time/effort and they need to hire at least someone to do the basic job.
I don’t think it is AI. People are holding their money tight to their chest. My clients say, “Things are slow.”
On a side note, this company is interested in my client list. I have over 1000 contacts, and 600 are clients I have worked with over the last 12 years. Of course, there was talk about what I would do with my current business. I will not flip my clients overseas, which has been the trend over the past decade, and I can’t leave them hanging. They brought up me bringing my list, but I don’t think just giving them information is propor and if they want it, they should buy it from me. How do you sell a client list? Is it a % based on sales?
This company has been around for ages and is extremely busy. The visualization department is new, and starting with 600 clients has to have value. I worked hard to build my clientele.
When my friend quit running his archvis business (which I produced work for) I bought his client list, 99% of which subsequently presumably died or otherwise
quit their businesses. He eventually let me off the hook for payment, which was cool.
One client remained and they are now my primary client for 10 years or so.
Anyway, yeah, your list has a value and I’d say it is a relatively high value. Pick a number you’d be happy with, using some metric or other, then negotiate from there, considering you’ll be then
still dealing with them in some manner.
My business consistently grew every year for 12 years. From around $ 80,000 my first year to well over $150,000 the last couple of years. Of course, there are expenses associated with that. When working for a larger company, you get benefits, and I had to take care of all of that. I also had a small payroll each month, paying people who helped out when I needed them. There is software and hardware - you all know.
- Percentage of Gross Revenue: A standard starting point is charging 30% to 50% of the gross revenue generated by those clients over the last 12–24 months.
That is a big number, but it is half of what they should expect to earn over the year, and my clients return over and over, so it compounds for them.
The new company brought up my client list, but it isn’t in the contract, so it should be negotiable. I can’t imagine them expecting me to give it to them. I can easly send all of my work to someone else, which I already have interest in (50/50), but I want to take care of my clients, who pay me good money for my look and feel. I feel that list would dwindle quickly if they paid me good money for mediocre work. I would be taking the same path most of the US freelancers took years ago, which I don’t want to do.
Anyway, thoughts?
Ball’s in your court, so good luck with getting the best deal for all parties. If they’re sensible they’ll see those exact points that you laid out 
I guess then there are the assets I can bring. I have nearly 700 models over on 3DSky ($4200), and almost all of the Evermotion tree libraries. As you said, the ball is in my court.
Earn-Out Model…. Look it up. It’s a fair way of mitigating risk on their side instead of paying you a lump sum - that would basically be selling them your books (which is another option)
Awesome, thank you!
The way I see it, after thinking it over a bit, they are hiring me to start their studio at an annual salary we have already agreed upon. Right now, they have a few techs doing their in-house work, which is the quality of the stuff we were doing twenty years ago. They have huge clients, some of the largest in the country, and they also do their renderings. They want to expand it into a visualization studio.
They also have the opportunity to buy my business, which is a totally different thing. There is a non-disclosure, so I can’t work for anybody else, but that doesn’t mean I can’t sell my business to someone else. Think about it, you are out of college, want to start a visualization company, and you don’t want to start from scratch. So you take daddy’s money and buy someone out so you can hit the ground running. When I was forced into it after a layoff and had money sitting there, I would buy someone who had spent more than a decade building something successful. I can’t imagine this company, which I will share later, thinks I’ll bring my client list for free, since that talk was an after-talk, and again, it isn’t in the hiring contract.
I don’t need to separate all the parts and pieces; I just need to come up with a price and justify that price. Contacts, clients, and assets. I’ll simply add things up, and it is what it is. Digital assets do depreciate, since older assets are not as good as newer ones, but I buy new assets for almost every project, so my library stays fresh. From what I read, thanks to Rusteberg, we agree on a high price and a low price. The low price is upfront, and the high price over a little time, if things work out well for them.
Not exactly. An earn-out model means you get paid based on actual revenue that materializes from transitioned clients over time. A buyout, or selling your book of business, would be a fixed valuation paid upfront (or in scheduled installments) based on past performance and projected future value, regardless of whether every client actually converts. In that case the buyer assumes the risk of client drop-off, while with an earn-out the risk is shared because compensation is tied directly to real, realized revenue after the transition.
I prefer the paid upfront, even if it is short-sighted :). I’ll just share my books, and we can agree on a price. If they are not interested, I’ll have to consider my options. It isn’t any different than any other service or brick-and-mortar business; you sell your assets. I already have someone offer me a 50/50 deal. As the projects come in, they do the work, and we share the profit. Another person offered any image, regardless of what it is, for a flat fee, regardless of what I charge, which, again, has been where things have gone over the last decade.
Personally, I get excited about the idea of canceling all of my software and subscriptions, which is a lot. If I were to flip my work, I would still need to keep most of that to manage the projects and be able to jump in if a project went south. Pros and Cons to everything, and a lot to think about.
In this company’s best interest, they’ll buy my client list. All these clients will find someone else, so why not them?
I am thinking of selling between 1-3 times my annual revenue - nice and simple.