Important factors while setting up AEC business

Important factors while setting up AEC business

Setting up a successful business empire requires great perseverance and efforts. Setting up an AEC business is a skill based business and this requires large scale human capital, strategic planning and determination with a penchant to be in sync with the changing market trends. After setting up a business, it is also vital to run it successfully. A right combination of attitude, aptitude and medium level investment, technical expertise will certainly be required.  Figuring out strategies to run this business efficiently, managing human resources and capital, marketing the services, killing completion etc. is the key to success. Good Results follow automatically once your system has right people, right technology and right amount of money invested in the right direction.

Some of the AEC services include CAD Drafting, BIM Services, Architectural Construction DrawingsMEP BIM Modelling and coordination etc.


Planning and financial projection planning is the first stage of any business.  It can either break or make a company. Architectural and Engineering companies are different from a normal business enterprise. This type of business comes with high investment and is dependent on market condition much more than any other business.  Construction industry is very volatile and the market depends on the overall economy of any country. Hence we need to plan finances keeping in mind cash crunch, business trends and other sudden investments. Hiring human resources and training them also is one of the major investment requirement in this industry.  This becomes all the more crucial when the business is engineering or CAD has it is a dynamic business. There are opulent changes that invade this industry and needs to keep changing. The technologies keep changing and one has to continuously keep changing the practices and execution methodologies. It is essential that we conduct proper feasibility study, make a steady plan for financial investments.  Client base, target market, revenue flow, budgeting and marketing strategies all these topics needs to be covered when we are thinking about starting an AEC business.  Due to constant market fluctuation and monetary instability, proper analysis or anticipation of future trends cannot be very accurate. Keeping these factors and market conditions in mind, a company should be prepared to ensure that there is enough cash flow to manage any sudden crisis that arises in business.

Finance is the most important aspect and has to be thought of first before starting a business. Without a proper financial backing and investment capacity it is not beneficial to start a business. With the constant threat of recession hovering around the construction industry, it is always good to be on guard with the finances.  Finance is as important for business as oxygen is for body. Funds have to be generated keeping in mind a lot of factors. In business like Architectural and Engineering Outsourcing there are many aspects which requires high inflow of money. Investment capital and operational capital both are important. Money has to be invested in building infrastructure, technical infrastructure, Manpower and other amenities. Technical infrastructure costs spike the overall investment ratio as the cost of high end computers, software and constant training or skill up gradation cost is very high compared to other businesses. For companies who are operating BPO or FPO do not need that kind of investment, neither they have to worry about operational costs that much. Also ROI, Returns on investments are not very fast in this industry has the investment is massive and the revenue generation is slower. Also AEC companies overall have less security and more risk in terms of finances. Operations cost is equally high and the growth rate is not very fast like IT or BPO sector. Project size or project amount are calculated in millions opposite to any normal back office or IT project. Owing to fluctuating market conditions, reserve funds also needs to be on the higher side to handle sudden and critical situations in business.

Marketing Expenses:

There are two types of AEC companies that we deal with, one can be off-shore and another on-shore. Off-shore companies and On-shore companies have to spend extensive amount marketing the services.  Client Acquisition and marketing of services is critical and an incurring expenditure. In the start, before you build a reference market or garner business through word of mouth, companies on-shore or off-shore need to do extensive branding, performing internet marketing. CAD or BIM Outsourcing companies in Asian locations also spend money on Search Engine Optimization, Pay per Click, Social Media or any form of paid marketing services to spread the word of their existence. Word of mouth is the most effective way to get more Architectural and Engineering projects. Experience speaks for itself. It is very difficult to inculcate trust initially on the start of business because clients would like to get references of companies who we have served. Initially, it becomes difficult to look for referrals too. It is important to invest in the right marketing staff to ensure we are able to get our website to rank on top.  Command on English language is a must in industries catering to foreign clients. Thinking innovatively and out of the box, constantly working on new skills to reach out to a large market is important to thrive in this kind of competition.

Technical Expertise and Constant up gradation of skills

Technical Expertise in different Architectural and Engineering Domains such as CAD Drafting, BIM Modelling, Architectural Construction Drawings etc. with experience of different standards and construction codes is a major challenge. There may be issues in hiring staff as such staff is niche and may cost more than usual Architects or Engineers. Apart from domain, software expertise needs to be thoroughly examined prior to hiring process. With constant changing trends and up gradation of software, every company needs to invest on training and development of a particular employee to prevent stagnancy. Since the scenario is constantly changing and newer technologies that make construction processes more efficient are evolving consistently, it is important to keep pace with the changing requirements of the industry.  Architectural work and Construction companies would certainly prefer to work on technologies and companies, which can make their projects cost effective and quick than work with companies who do not work with latest project types.

Effective Project Management

Project Management is one of the key elements contributing to the on-time delivery and effective communication with our client. Especially, in Architectural and Engineering business completing and delivering projects on time with good quality is the key to successful business run.

Effective project management and internal communication channel determines how the project is managed and executed.

Managing Productivity

Managing and measuring productivity is again crucial in running Architectural and Engineering companies successfully. Management has to be vigilant enough to take necessary measures to ensure the resources are utilized to the optimum based on the skill sets and experience.  Ratio of hours quoted to client vs. hours consumed for project completion should be equal or less but not more than 10%. Giving appropriate quotation or bids to clients plays an important role along with the hourly cost. Hourly charge can be optimum only when we are productive.


Some of the AEC Services include CAD Drafting, BIM Modelling, BIM coordination, Architectural Visualization, Construction Drawings etc. Setting up a business like this certainly proves to be extremely profitable when the above criteria’s are fulfilled.

Written By:
Bhagwati Pathak
Bhagwati Pathak is an Executive Director at Tesla Outsourcing Services. Technical Project Management, BIM, Client Management, and Leadership are her forte. With an expertise in BIM and a flair for writing, her articles provide a direction to contractors, sub-contractors, engineers, and architects in employing the right methodology for an Architectural, Structural, or MEP CAD / BIM project.

Leave a Reply

Your email address will not be published.