First off.... $200 is bullshit. Never bill your direct labor. Bill hourly rate is a multiplied value  where you take your direct labor and multiply it by a multiplication factor.

There is a reason. You are in business. This means you have to operate this like a business. You should in some regards treat it as if you are running a corporation (except how you handle your taxes). You are always making an income not just for yourself but also for the business. In fact, you should have separate bank accounts. One for business and another for personal. This is for your accounting of business. Depending on what business type that you are using as a business, you will have different tax rules to follow. 

Lets say you are a sole-proprietorship, all revenue is taxed and accounted on your personal income tax but for business accounting, you don't live on all your income. You live on maybe 15%-20% of it but you need to multiply what you are going to be reserving for what you live on. Lets assume you typically were living on $25/hr at a job but your take home was in fact closer to $18/hr. But you are in business and you have liability so you want to have a direct take home of $30/hr then you factor that in. What you set for direct labor/take-home (in your case), it should be only 15-20% of your Billed Hourly rate. You have other costs like your professional liability insurance, health insurance and dental plan. If we do the math, your direct labor plus your indirect labor costs such as insurances should be under 30% of what your billed hourly rate. The rest should be going to the business to pay for business expenses, your taxes from total revenue from the business (which would include your taxes for your direct labor/take home from the business). Your business should retain at least a net profit of 15% of the total gross revenue.

Your fee is your's business's gross revenue.

As a rule for a financially successful business, you should bill at least 5x times as much but better at about 6x or more than your direct/labor take home. It is hard to get this when your fellow architects are morons when it comes to billing because their stupidity by shear dominance is lowering the price ceiling so low that it architecture as a business is broken and unsustainable because what clients are willing to pay because of 90% of your competitors they get quotes from are selling themselves short in such unsustainable level that you don't make enough money to grow a business.

Residential sector is a terrible market place even though they maybe account for 80% of the permits issued and what is built but they don't account for 80% of the capital in construction in addition they have every one on earth competing. Work on non-exempt buildings because you get twice as much money per sq.ft and the average project size is typically 10x the size. The amount of time it takes to design a 20,000 sq.ft. commercial building is not that much more than a 2,000 sq.ft. house.

For this type of work, it would be a billed hourly rate type project. If it is the first time you do it, it is best to do it that way. However, if your client doesn't want to do it at an hourly rate, I would recommend you triple the amount of time you are suggesting.

It will take more than that because you will need to be thorough as you maybe called to do additional work.  I would say it would could be anywhere from 15 hours to 40 hours depending on how thorough you need to be and other variables.

Example:

40 hours at $30/hr. = $1200. Multiply it by 5x - 7x... for a Billed Hourly Rate over estimated hours,  the billed flat fee would be about $6,000 - $8500.

If you can do it in say 25 hours, under given scope of work and detail of documentation, then you can bill it closer to $3700-$5500. 
You better be thorough about documenting everything and have a clear organized plan in how and exactly what you are going to document. You should think out exactly how you are going to document the place efficiently. I recommend you use a laser meter and have a tape reel on hand as well as a tape measure on your hip. 

If you can realistically document this in 15 hours then a price in the range of $2000-$3300 would be appropriate. 

Definitely any of this substantially under $2,000 for this work, it would be ridiculous unless you have justifiable reason to be generous. It is up to you in how you will bill this. 

A flat fee is basically calculated using billed hourly rate multiplied by an estimate amount of time including float in your time. Hence why I would not estimate less than 15 hours. 

My point is not to suggest a specific price or for you to price things my way but I would suggest you price yourself so not to screw yourself. You need to be able to make money and pay the bills.

Although it is 1500 sq.ft.. There is a bit of dimensioning. How much you want as a direct labor rate is up to you to decide. Since you are an architect, I would assume you want to be making a livable direct take home income.

Some may suggest a lower price but you are a business and if you can make good on this as a business, it will help you remain solvent. 

Donna,

3x is what caused architecture firms to not have any income to grow. If you take into account direct labor, insurances, taxes on your direct labor rate, then billed hourly rate would be about 3x the combined direct labor cost and insurances and its immediate peripheral costs.

The problem is just doing 3x your direct labor is not sufficient to grow a business especially if you want to ever have employees. The corporations that grow does not spend more than 20% of their income on salaries and wages of employees because you got 25%-30% of your income taken out by federal taxes and about another 15-20% from state taxes and in some cases,additional amount taken out to pay local business taxes where they may tax your income. 

There is a reason to bill more than 3x direct wage/salary. Generally 5x to 7x because you got lean periods that you need to think about. One reason architecture firms have failed is they spend about as much as they get so when a crash in the economy occured, they ate sh-t. Software and other businesses that grow do not pay more than 20% of their income on wages/salaries because they build money to absorb losses or lean cycles but also to be able to invest in growth. This truth still applies to us because a business doesn't grow if you don't have any net profit for the business itself. You got to treat your business like a separate person to some extent when it comes to accounting except for calculating taxes unless you are being taxed like a corporation which is subject to double taxation. However, to confuse tax accounting and business accounting where you separate your personal and business stuff into separate silos (bank accounts). In a sole-proprietorship, you simply have to take both business and personal accounting and you are taxed once on all income that you receive from a sole-proprietorship business and directly to yourself not through your business. 

After all, if you are going to grow a business, you need to pay for yourself and for your business which is what architects often fail to do sufficiently. They are just billing for themselves, their taxes and their insurances/etc. and often have no money set aside for their business. Therefore, you almost never make enough money to grow a business. 

You don't grow it by taking it all for yourself and use it. You got to sort of pay your business it's 'salary' as well so you can have a business checking and savings and grwo your business account in addition to your own. 

If you take too much for yourself, there is nothing there for the business to grow. Do the math. If you only do 3x, You take 1/3 for direct wage/salary take-home, 1/3 to 1/2 for taxes. The rest is your health insurance, PLI, license fees, etc. You have nothing left.

If you want to grow a business, you need to just about double the revenue coming in. Taxes will consume 1/3 to 1/2 of your revenue. The difference is, your take-home remains the same amount but consumes less percentage of your total revenue and your insurances and all should be about the same. Therefore, you make enough so there would be a certain amount left over to put into the business itself to grow it.

Understanding the accounting?

If you are going to bill using 3x multiplier, you need to based on BOTH direct and indirect labor costs which includes health insurances, etc. Basically, total labor costs. Ideally, it should not take up more than 30% so a 3.5x multiplier is better financially. 

I was speaking of 5x to 6x direct labor -take-home. 

Alot of people make the mistake of using 3x multiplier on direct wage/salary amount and they end up cutting their own throats as a business or themselves. 

The point is making enough money to pay you and your business so to speak.

There is also alot of tricks to calculating. Either they are including more than just direct salary/wage when doing the 3x multiplier... which they actually should. Because an employee's wage/salary should be between 15%-20% of revenue and not more than that. 

It's all math. However you play with the numbers, the issue is you need to provide room for the business as well without resorting to techniques used for maximizing a profit once you issue a billed hourly rate. 

If I was paying an employee a wage of $20/hour to do the work involved. I can either do $20/hr times 5x to 7x  

OR

I take the wage/salary plus all other background costs like worker's comp, other taxes an employer has to pay, health insurance, etc. and figure out what that would be per hour. So a $20/hour employee may actually be a $30-$40 hour employee. (Just rough math) and then I multiply by say 3x or 3.5x or 4x or so.

In this example, the math would actually rough out about equal.

They sometimes use additional tricks to maximize profit by billing out as if the principal was doing all the labor and in fact they are using lower priced employees for most of the labor hours spent. But that is tricks to maximize profits. One should not use these tricks to make a profit. They should already be making a profit. Maximizing is just to maximize your profits earned which should be done within reason without compromising HSW, either.

I think we are seeing each other's points.

In your case, you have multiple income streams because your teaching work is essentially subsidizing. 

Not best business practice model, of course but people have used it to drive prices down on the marketplace which when abused is harmful to the profession. I'm not intending this as criticism of you Donna. 

My points isn't unique to me, either and you can see this substantiated through empirical evidence.

shuellmi,

Elaborate what it is a multiplier of?

How is the base being calculated before the multiplier is added. There is a lot of tricks to playing with the numbers.

My point isn't that 3x or 3.4x or 3.5x or 4x is evil or bad but it is important to figure the base. If it is the direct wage or salary base amount then 3x would be problematic mathematically.

The accounting nonetheless should allow room for the business to grow and be sustainable and absorb mild lean periods. Long periods of lean period like found in this recession is hard to absorb if not impossible. However, I am talking about more normal lean periods.

My point is meant for people to understand to not cut themselves short and build a sustainable business. 

I want to make clear that there is many ways to play the numbers. My way isn't the only way to play the numbers. The 5x to 6x is about the suitable figure when you use the base wage amount or what the salary would be based on a 40-hr a week work week. The firms that are growing and doing pretty good billing using a 3x to 5x multiplier is including more than just the actual base wage or hourly rate of a salary that including also the benefits, etc. 

Definitely charge a fair amount for the time spent.

when you are in business, billing should not be treated like a hobby gig. Far too many do that and it hurts us all when we do that.

Like said earlier, when you calculate a flat fee, you use your billed hourly rate and multiply it by the estimated number of hours including float.

In this case, you estimate your hours and then multiply your BILLED HOURLY RATE. It should jive.

So you estimate 15 hours. Determine your billed hourly rate that you would do the job.

You may round numbers up to an easy number.

Remember, you are calculating for all time spent to the project. Hours spent doing work for the business unpaid is bad practice to do when running a business.Your time = money.

I agree, a flat fee would be appropriate but you need to have a good sense of the time it will take without underestimating your time. Over estimating a little... fine. Under estimating is bad and will bankrupt you if that becomes a continuous habit.

Be realistic with time estimated. Then use your billed hourly rate times the estimated number of hours and that's your flat fee for the job. You might round it off a little. Generally, rounding up to the next $100 unit or $250 unit of measure. Small clients don't like dealing with odd dollars and cents stuff. 

That is how I would handle a flat fee but I have to be realistic about my time I estimate. If I underestimate... it is best not to repeat that.

Carerra, sure. Keep in mind, all other fees system is built on the foundation of a billed hourly framework over time because everything in our cost economy of running a business such as labor is based on money over time duration. So when you calculate your costs over the estimated time, you need to make a profit. 

You are just re-packing the fee. If you don't know the amount of time it will take, you use a billed hourly fee. If you have an estimate with float accounted for, you package a fixed price fee.

That is true also. Add to point - But a 10+ year veteran is expected to perform better and faster but they charge more per hour for their time. Of course, you need to know how much time something is going to take you first. This way, you can appropriately value things. How do you know the value something is but you need to know how how much time to at least bill. That's being the minimum to calculate from. Then if you have value, you adjust how much you charge per hour. 

I agree with your point but you need to know where you are cutting your throat at and then you try to get the most people are willing to pay you for doing the service without it being below the bottom line for you because that bottom line is the point where you may need to say 'No' to doing the project unless. 

Ultimately, you are only going to get paid what the client is willing to pay.

If one has an idea about the time, they can figure out their billed hourly rate point and what the minimum fee they are willing to accept for the project. In a highly competitive market like this project would likely be, the lowest bidder is the one that usually wins.

These clients are often shoppers so they tend to look for the lowest price... at least that is the predominate demographics is like. Therefore, if you are billing higher than the lowest bidder, you got to substantiate why you are charging that much. The lowest bidder is incompetent and doesn't have a clue what he or she is doing and they can't substantiate a bid that is reasonable. Therefore, you need to think your time's worth and maximize what you can get but you need to know how low you can go and make a profit when the haggle time comes.

At the same time, you need to know the market price ceiling is. If it is below your minimum level that you are willing to go and still make a profit then you need to say 'No' to the project unless you have good reason that it may turn into a good project that pays out. If it is higher than that and the client is willing to pay then you go and seize it.

I agree with the notion of Carrera.