Hi everybody, just looking for some input and advice. (This is a bit long, and I apologize in advance.)
I established my firm about 3 years ago in a small sized city about an hour south of Chicago. The county has a population of just over 115,000 people and is served by about 6 - 8 practicing architects. All but 2 are independent, and the other two have a small 6 person firm with 2 licensed professionals.
I am really struggling against one other architect who is playing in the same market as me. He deals mostly with private businesses and home owners, and occasionally a local municipality.
Looking for a little advice.
This individual has been practicing here for 25 years. He is well established. I am not going to hammer him personally, I like him, and we are in the same local chapter of the AIA and serve on the board together. Recently, we have been invited to submit on the same several projects. I keep losing, and the reasons is often the fee (according to clients).
This architect is notorious for delivering what I consider sub-standard professional services. Most contractors acknowledge that the drawings provide about half the information they actually need to bid the project let along build it. The drawings are design development level, 50% at best, and he offers very little in the way of proposal phase or construction phase services. There is a level of frustration in the contractor area because he also reacts to addressing issues very very slowly if at all. He has even mentioned to me that he simply triages the highest priority issues and defers the rest.
I don't think most owners realize that the problems they have with additional costs related to contractor driven change orders is a result of the lacking quality of the construction documents and I have to imagine that construction costs are being driven up by contractors who know they aren't going to get adequate timely responses.
I came from the corporate world, and am pretty much by the book. I have an office here, and occasionally an intern and book keeper to keep up with demand (when we were busy). Basically, I have more overhead than him.
We have lost several projects because his fees are always 2/3 of mine (or worse). I have evaluated the concept of coming down to his level and producing working documents, designs which are abbreviated, and not including proposal phase or construction phase services to stay competitive. At the end of the day, I simply don't feel comfortable providing an abbreviated (read crappy) level of service just to win a project.
On a plus side, we have taken a few clients off of him. A local church hired us for a 750K addition/remodel and we are working with one of the local hospitals because they were dis-satisfied with his quality of work. However, he is winning the majority of projects.
Sorry this has gotten so long, I just want to make sure that I fully explain the situation. At the end of the day, this guy is just cheap in all respects. His entire world revolves around who can do it the cheapest, regardless of quality. As the new player in town, I am having a hard time convincing clients that our fees are based upon providing a high quality set of working documents, design, and proposal/construction phase services. Unfortunately, most of them have often not worked with architects before, so getting them to understand the design/documentation process is a challenge, let alone explaining the differences in levels of service.
Talking with one of the local civil engineer consultants in town, he agrees with my perspective and says he hates working with him because of all of the problems and half baked solutions.
What bugs me more is the damage he is doing to the profession. Its a race to the bottom, lowest common denominator perspective, that I think damages the value a project adds to the project, and what an appropriate level of detail and delivery should mean. He has been here so long, and has been operating in this fashion, that contractors typically rule, and there is really nobody looking out for the owner. How he gets his drawings through permit is beyond me.
Anyway... thats long enough. What is a new architect to do? Sacrifice quality of work to land projects? Stay strong and offer a higher level of service and not get projects?
" Most contractors acknowledge that the drawings provide about half the information they actually need to bid the project let along build it."
You might want to think about cultivating strong relationships within the contractor community -- quite often contractors are in a position to recommend architects and, if they know your docs will make their work go more smoothly and with less overall cost to the owner, they can provide an independent voice to help differentiate the "value" of your services from the other guy -- and explain to owners why your [slightly] higher fees are worthwhile.
I'm just tuning in here to repeat what quiz said above. We've just recently acquired a huge client through the very same method. A few local firms have started building a lazy reputation and one of our often used contractors convinced a new client in our city to avoid certain big firms, even-though their fees are lower, because they would eventually pay more throughout the project due to omissions and/or incomplete working drawings.
On one project, a certain firm underbid us by almost 50% but our contractor friend convinced the client that it was in their best interest to hire us because we offered more complete and reliable construction docs.
hold on and the clients will come - the clients you want that appreciate value for services rendered - try to keep in mind that you dont always want the cleint that shops around for the rock-bottom fee. And the advice above about cultivating the local contractor and consutlant communities - golden! in small-town construction circles, everything gets discussed !
and thinking outside the box - have you considered merging? If you like him and he has a long-standing local rep for marketing and you are interested in providing good services/projects, maybe working together MIGHT be the answer for both of you - just a crazy thought
The reason why I started this firm 3 years ago is two fold.
One, I am buying my dads 15 year old Property Inspection/Environmental Testing/Energy Audit business. Because of this, a merger might be complicated, even though me and my dads business are separate legal entities, we operate them as one.
Secondly, the subject architect is in his early/mid 60s. The rest of the architects are 60+ except one who is in his early 50s.
I am 36.
I started the firm because it was a good time to get my foot in the door and capture some of the demand as other architects stop practicing.
I keep telling myself to be patient. Its tough when you have bills to pay.
you need to define your niche. take a look at all of their past projects and make a chart of typologies. put marks in each (education, residential, etc) and see what types of work they are mostly doing... any possible underserved areas? the goal is to 1. find new lead sources so that you are not fighting for same slice of pie 2. to do better work and gain a reputation for quality, and 3. to become a specialist in a certain typology ...one that you can dominate.
Dec 18, 14 8:36 pm ·
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Struggling with competitions low fees
Hi everybody, just looking for some input and advice. (This is a bit long, and I apologize in advance.)
I established my firm about 3 years ago in a small sized city about an hour south of Chicago. The county has a population of just over 115,000 people and is served by about 6 - 8 practicing architects. All but 2 are independent, and the other two have a small 6 person firm with 2 licensed professionals.
I am really struggling against one other architect who is playing in the same market as me. He deals mostly with private businesses and home owners, and occasionally a local municipality.
Looking for a little advice.
This individual has been practicing here for 25 years. He is well established. I am not going to hammer him personally, I like him, and we are in the same local chapter of the AIA and serve on the board together. Recently, we have been invited to submit on the same several projects. I keep losing, and the reasons is often the fee (according to clients).
This architect is notorious for delivering what I consider sub-standard professional services. Most contractors acknowledge that the drawings provide about half the information they actually need to bid the project let along build it. The drawings are design development level, 50% at best, and he offers very little in the way of proposal phase or construction phase services. There is a level of frustration in the contractor area because he also reacts to addressing issues very very slowly if at all. He has even mentioned to me that he simply triages the highest priority issues and defers the rest.
I don't think most owners realize that the problems they have with additional costs related to contractor driven change orders is a result of the lacking quality of the construction documents and I have to imagine that construction costs are being driven up by contractors who know they aren't going to get adequate timely responses.
I came from the corporate world, and am pretty much by the book. I have an office here, and occasionally an intern and book keeper to keep up with demand (when we were busy). Basically, I have more overhead than him.
We have lost several projects because his fees are always 2/3 of mine (or worse). I have evaluated the concept of coming down to his level and producing working documents, designs which are abbreviated, and not including proposal phase or construction phase services to stay competitive. At the end of the day, I simply don't feel comfortable providing an abbreviated (read crappy) level of service just to win a project.
On a plus side, we have taken a few clients off of him. A local church hired us for a 750K addition/remodel and we are working with one of the local hospitals because they were dis-satisfied with his quality of work. However, he is winning the majority of projects.
Sorry this has gotten so long, I just want to make sure that I fully explain the situation. At the end of the day, this guy is just cheap in all respects. His entire world revolves around who can do it the cheapest, regardless of quality. As the new player in town, I am having a hard time convincing clients that our fees are based upon providing a high quality set of working documents, design, and proposal/construction phase services. Unfortunately, most of them have often not worked with architects before, so getting them to understand the design/documentation process is a challenge, let alone explaining the differences in levels of service.
Talking with one of the local civil engineer consultants in town, he agrees with my perspective and says he hates working with him because of all of the problems and half baked solutions.
What bugs me more is the damage he is doing to the profession. Its a race to the bottom, lowest common denominator perspective, that I think damages the value a project adds to the project, and what an appropriate level of detail and delivery should mean. He has been here so long, and has been operating in this fashion, that contractors typically rule, and there is really nobody looking out for the owner. How he gets his drawings through permit is beyond me.
Anyway... thats long enough. What is a new architect to do? Sacrifice quality of work to land projects? Stay strong and offer a higher level of service and not get projects?
stay the course -- the word will get out that you produce quality
if it's really ruining you financially, you may need to consider restructuring to eliminate some overhead and run a leaner ship
thanks proto. Right now it isn't ruining us financially, but we have slowed considerably this fall.
I am "between projects" right now, looking for that next work, but issuing a few proposals this week.
Its tough to see the damage being done and knowing I am losing projects that I could provide great service for.
" Most contractors acknowledge that the drawings provide about half the information they actually need to bid the project let along build it."
You might want to think about cultivating strong relationships within the contractor community -- quite often contractors are in a position to recommend architects and, if they know your docs will make their work go more smoothly and with less overall cost to the owner, they can provide an independent voice to help differentiate the "value" of your services from the other guy -- and explain to owners why your [slightly] higher fees are worthwhile.
Good luck
I'm just tuning in here to repeat what quiz said above. We've just recently acquired a huge client through the very same method. A few local firms have started building a lazy reputation and one of our often used contractors convinced a new client in our city to avoid certain big firms, even-though their fees are lower, because they would eventually pay more throughout the project due to omissions and/or incomplete working drawings.
On one project, a certain firm underbid us by almost 50% but our contractor friend convinced the client that it was in their best interest to hire us because we offered more complete and reliable construction docs.
Thanks for all of the replies.
I know whats right here, doing a quality job. And I want to maintain that level of quality.
Its just tough to see the contracts awarded to the low guy over and over.
hold on and the clients will come - the clients you want that appreciate value for services rendered - try to keep in mind that you dont always want the cleint that shops around for the rock-bottom fee. And the advice above about cultivating the local contractor and consutlant communities - golden! in small-town construction circles, everything gets discussed !
and thinking outside the box - have you considered merging? If you like him and he has a long-standing local rep for marketing and you are interested in providing good services/projects, maybe working together MIGHT be the answer for both of you - just a crazy thought
Its just tough to see the contracts awarded to the low guy over and over.
You likely don't want those clients...and, if they end up dissatisfied, they may come find you anyway
Interesting the concept of merging.
The reason why I started this firm 3 years ago is two fold.
One, I am buying my dads 15 year old Property Inspection/Environmental Testing/Energy Audit business. Because of this, a merger might be complicated, even though me and my dads business are separate legal entities, we operate them as one.
Secondly, the subject architect is in his early/mid 60s. The rest of the architects are 60+ except one who is in his early 50s.
I am 36.
I started the firm because it was a good time to get my foot in the door and capture some of the demand as other architects stop practicing.
I keep telling myself to be patient. Its tough when you have bills to pay.
you need to define your niche. take a look at all of their past projects and make a chart of typologies. put marks in each (education, residential, etc) and see what types of work they are mostly doing... any possible underserved areas? the goal is to 1. find new lead sources so that you are not fighting for same slice of pie 2. to do better work and gain a reputation for quality, and 3. to become a specialist in a certain typology ...one that you can dominate.
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