Prime cut

It doesn’t sound too bad does it, sub-prime? It seems to imply that although you’re not getting filet mignon, the item sitting on your plate is a decent piece of sirloin steak or, at worst, a piece of rump.

On closer inspection it turns out that the culinary equivalent of sub-prime is actually the scrapings from inside a road-kill rendering machine, mechanically compacted into something that barely resembles meat.

When I first worked at an architect’s office, I thought the word “recession” was an excuse to sack a lot of older (and more expensive) architectural staff, while cheaper ticks like me took over their work. It was a very different matter when I began working for myself.

I set up my own practice in 1986 and through a combination of lucky contacts and a surge in housebuilding, found my firm with masses of work and a rosy outlook by the end of the decade. However, when the tide started to turn, I became marooned by the collapse of that market. I’d been gung-ho about working for speculative developers and hadn’t noticed the gaps between bills going out and money coming in. Quite soon I stopped getting paid altogether and by the time the courts agreed I was owed £50,000 there was nobody left to pay me.

Rather than a decent sirloin steak, ‘sub prime’ is more like the scrapings from inside a road-kill rendering machine, compacted into something that resembles meat

All businesspeople have to find out about the British legal system sooner or later, and what a deeply dispiriting exercise this is. Probably the most galling aspect of those two years in Chancery was that my personal indemnity insurance company ended up paying my lawyers more than I’d have accepted to walk away in the first place. The firm survived – just – but I ended up owning a good deal less of my house. In retrospect, I should have got rid of my six employees three months earlier than I did.

After I’d settled the case, a partner in a big commercial practice who’d been my expert witness said to me: “Never let a client owe you more money than you are prepared to write off.” This means billing little and often.

Earlier, when clients asked me if I needed money on account, I’d say, “It’s okay, wait until I send you an invoice.” But a wise builder told me, “Always accept money on account, as they’ll need to find less to pay you next time.” Since then I’ve asked for as much as I dare. At the start of a project clients tend to be enthusiastic and have funding. They can easily write cheques that equate to three or four weeks in staff time before you’ve done anything except look credible. A cheque in hand is worth two BACS transfers “when I’m back in the office”.

When it started getting sticky again at the end of the nineties I was running a much smaller operation, relying more on self-employed architects and had a broader client base and a little more commercial work. I was also tougher about getting paid.

Instead of going to see potential clients, you can direct them to your website. If you never hear from them again, you’ve saved yourself a day’s unpaid work

By then, we were using computers to draw with and email enabled us to have secretarial work done without employing anyone. I also had a website. If you run the sort of practice that I do, a website does not generate work, but it does save a lot of time and disappointment. Instead of going to see potential clients, you can direct them to the website so that they can get an idea of your work. If you never hear from them again, you’ve saved yourself a day’s unpaid labour.

I have just finished serving six years on the RIBA council, and over that time I’ve met architects operating firms of all sizes. Right now I’m delighted that I’m not running a practice employing 200, 50 or, indeed, 15 people. Having learned the hard way, I now hardly owe anyone any money.

And as a couple of my clients seem to be doing well out of other’s misfortunes, and I’ve just been commissioned for a publicly funded project, things are looking up. Not that any of this is so wonderful in itself, but at least I’m much less exposed than I was last time.

The same can’t be said for everyone else. The business of choosing, purchasing and paying off one’s own house used to be considered complicated and daunting. However, for the past four or five years TV has been putting across the idea that property development is a skill-free operation and all anyone has to do is dig an underground house next to their neighbour’s foundations and they’ll be millionaires when they sell it. This attitude has meant the whole residential property business has been running ridiculously out of hand for years and it all had to go sub-prime sooner or later.

At least it means there will be more building firms around prepared to offer sensible prices to build the Olympics …