Architectural practices: how top 20% firms build profit by design

Great architects don’t just design buildings — they design businesses that work. Across Australia, the top 20% of architectural firms consistently outperform the rest.

Here’s what the data shows:

• Net profit margin: 20–25%
• COGS: 5–10%
• Wages: 30–35%
• Rent: 4–7%
• Overheads: 10–15%
• Owner’s compensation: 10–15%
• Average annual revenue: ~$1.4M

These firms typically deliver 20–50 projects per year, with design fees averaging 7–12% of project cost and a billable utilisation rate above 80%.

So what makes them different? They blend creative design with business discipline:

• Track project profitability — know which clients and project types drive profit.
• Use fixed-fee pricing and milestone billing to improve cash flow.
• Maximise billable hours and staff utilisation.
• Forecast pipelines to manage capacity and cash flow.
• Monetise IP — turn designs and templates into scalable revenue.
• Use benchmarking to set targets and measure progress.

At Success Tax Professionals, we use the TaxFitness Top 20% Business Benchmarking System to help practices like these identify opportunities, optimise performance, and reach the top tier of their industry. Because just like great architecture, great businesses don’t happen by accident — they’re designed.