The cost for you to render services does not linearly increase with the size of the project.
My fees don't increase linearly, they increase proportionally.
Aug 30, 14 11:25 am ·
·
linearly or proportionally.. either way... okay.
Miles, sarcasm doesn't always communicate across the web in text without use of emoticons like :roll eyes:
I don't know you or most other people on here... personally. We never had in-person or even phone conversations to know personalities so I take text based communication in the default serious tone.
Implying that a 2.5% residential fee is big doesn't need an emoticon to indicate sarcasm.
Aug 30, 14 11:45 am ·
·
Miles,
Fair enough. When I first looked at the comment, I felt you had to be joking but I don't know you enough to be sure. There is alot of people who thinks a 2%-3% fee is big.... surprisingly.
Considering clients would have a difficult time being taking these guys serious enough to pay them more than $100.
Imagine this guy:
Try taking this guy serious enough to pay him $1.00
Imagine that. Remember him?
Sure, there was a joke behind this whole 5 cent gimmick.
Some people think paying more than $500 on plans is expensive because they think we are just a plan house and that we have all these plans in drawers and just ready to whip it out so they would think 2% on a $375,000 construction cost of a ~2500 sq.ft. house design is big if not "too expensive".
Carrera, that's correct I'm not licensed, I do light commercial work, sometimes shop drawings and what not. Should of stated that.
Aug 30, 14 12:18 pm ·
·
In your case, Miles, now looking into who you are... I probably can't imagine you, or even your father at that, to seriously entertain the notion of doing a residential design project for 2-3% unless it is really big house with a fairly high cost per sq.ft.and you are just doing it for a friend or something so you won't be profiting as much from for the work involved.
Aug 30, 14 12:24 pm ·
·
clairev,
You are in Texas... right? Not sure if I am comingling other threads on the same line.
The projects would be light commercial up to like 20,000 sq.ft. if I remember the Texas exemptions, correctly.
You fees for commercial work seems a bit low for the work involved. How are you doing on building business capital besides paying for your place to live? Are you generating capital. What's the contribution margin per project rendered?
Aug 30, 14 12:33 pm ·
·
Carrera,
Texas is a fairly price pressured market as the price ceiling in the residential side is pretty low there.
Richard, when establishing a fee to charge it is the market that dictates and establishes fees. The notion of sitting down with a calculator and totaling everything up will never yield a competitive number. The market dictates fees in many ways including those scoundrels you’ve been worried about. It’s a matter of making the sale then sitting down with a calculator and figuring how to do the job and modulate the services you offered to eke out a profit.
Then during the job the trick to holding onto the profit is a matter of keeping a running tab on things, daily on small things, and making course corrections to hold to the budget. Just remember, when you contract to do a particular task it just states the task title and leaves the content wide open. Even if they tie you down to daily site visits it never states how long you have to stay there.
Taxes – I would keep taxes out of your project budgets. Your company (LLC) doesn’t pay taxes; profits are a pass-through to your personal taxes.
Cash – In what you are doing cash can be one of the scoundrels and you have no clue its happening. Guys doing jobs for cash can cut 30%+ off their comparative fees and never even get scratched. There is no level of modulating services to combat that. Housing is huge into this, clients aren’t required to send 1099’s on personal expenses like design fees for their new house and don’t.
Texas – Exempt up to 20,000 S.F.!? Man! I don’t have the facts at hand but that has to be 40% of the market. Did you type that correctly? To hell with going to school, just move to Texas.
“Holy dog shit! Texas? Only steers and queers come from Texas, Private Cowboy, and you don't look much like a steer to me, so that kinda narrows it down.”
The issues I've been running into is random people and Mexicans charging little to nothing for work, there's a guy a few miles away, he works at a custom millworker shop and does plans on the side, the guy charges $.20 cents a square foot. That's one, another is a guy that only charges $.25 a square foot, and with that guy, I just got a client that did the design with him, the whole plan was in one sheet, no cross sections or detailing, just your elevations, floorplan, roof plan, foundation plan and nothing else. One the worst plans I've seen lately. The plans didn't pass review for permits and many subcontractors said they were wrong. The guy calls me and that he had paid $300.00 for the plans. Like wtf. Said he really needed to sit down with me. Long story short, I met with him in my office, showed him one of my plans which consisted of 18 pages, and then charged him 2,500 dollars for design alone. The guy freaked out and told me it was way too much and that I was way too expensive. Told him thank you, walked away, then came back and asked me if I could lower the price and told him I couldn't help him at the cost he's asking for. He came back with 700 dollars which insulted me even more.
What I do and what the other guys do can't be compare quality of plans with so much detailing and service, to se other what I call sketcher that does design work.
What do you guys think of that?
Aug 30, 14 1:48 pm ·
·
Carrera,
The 20,000 sq.ft. is correct. Two stories though. I don't recall if its gross sq.ft. of building or ground area.
"The issues I've been running into is random people and Mexicans charging little to nothing for work, there's a guy a few miles away, he works at a custom millworker shop and does plans on the side, the guy charges $.20 cents a square foot. That's one, another is a guy that only charges $.25 a square foot, and with that guy, I just got a client that did the design with him, the whole plan was in one sheet, no cross sections or detailing, just your elevations, floorplan, roof plan, foundation plan and nothing else. One the worst plans I've seen lately."
That is why I was hesitant in referring to you as one of those scoundrels. You're pressed down by the scoundrels in the market hurting your ability to charge more.
I have been dealing with this issue for a little while now. How have you overcome that issue?
Aug 30, 14 2:37 pm ·
·
Not entirely.
I been working with this issue for awhile myself. Trying to be able to deliver the services necessary for the work to be competent not just meeting the code but actually competent.
However, one thing you have going for you on one part is you have the architectural stone and veneer. So you can possibly subsidize some of your losses by rendering fees below break even point from profits from the architectural stone veneer.
This is a common tactic used by corporations that manufactures game consoles and sell them way below cost because they subsidize the loss through software which is historically high contribution margin. The disc costs maybe $0.10 and the package total may cost $0.75 and they sell the software for $20-100.
You need to use something of this sort if you are going to compete on price.
They are probably heavily subsidized. Often through fraudulent means. I'm not suggesting an actual fraudulant method of subsidizing costs.
You are just taking some of the profits on a high contribution margin venture and passing it over to something that you are getting zero contribution margin (just breaking even) or worse.... losing money on every sale of service. The trick is you need enough contribution margin on your other 'ventures' (architectural stonework and veneer) to absorb. That's your challenge.
For me, I would do software to subsidize the losses but it isn't the 1980s or early 1990s anymore. What level of work I need to put in just to be able to sell the software needs a corporation with a significant software development team.
This makes things a bit challenging in that regard.
However, charging higher prices in part means I am not accepting clients that aren't ready for proper design services or is too cheap to pay the proper fees.
With that prospective client, you might have to be blunt and say, if you can afford to build a $425,000 to $500,000+ sq.ft. home that he can afford to pay the $2,500 design or more. You need to educate them that you are delivering a service not a product with building design work. You are providing design service and that your services involves much more than just drafting buildings and be clear that the service is not a stock plan shop.
Clairev, Richard is correct, people at that level do look at it as a product….but stopping into a stone shop to get plans doesn’t help that perception. If I were in your situation as a vendor of product I’d offer the plans for “free” as a part of a bigger package of materials and install labor….simply hide the cost of the plans into the packages. Design-Builders do it all the time so do homebuilders and landscapers.
Aug 30, 14 3:57 pm ·
·
Yep, Miles, the $2500 is pretty small fee. Maybe the project was smaller. Then again, the lower fee because some of the work was already done. Okay. perhaps. Don't know the exact conditions of the matter. Correcting errors and making a proper set.... might not be the same as designing from scratch.
Where has everyone been? Has anyone recently searched for the job listing "architect" to find almost every listing a "Data Systems Architect" or "Solution Architect", "IT Architect" "or some other tech sector "architect"? The name is lost already. You don't see "IT Doctor" that often do you? I bet that the AMA would be suing left and right if that term was being used. Let's stop fighting amongst ourselves for the sacred title. The profession as a whole needs to defend the "name" so it does not get eventually usurped and relegated to a secondary definition.
The Word "Architectural"?
^ Apparently you are immune to sarcasm.
The cost for you to render services does not linearly increase with the size of the project.
My fees don't increase linearly, they increase proportionally.
linearly or proportionally.. either way... okay.
Miles, sarcasm doesn't always communicate across the web in text without use of emoticons like :roll eyes:
I don't know you or most other people on here... personally. We never had in-person or even phone conversations to know personalities so I take text based communication in the default serious tone.
Implying that a 2.5% residential fee is big doesn't need an emoticon to indicate sarcasm.
Miles,
Fair enough. When I first looked at the comment, I felt you had to be joking but I don't know you enough to be sure. There is alot of people who thinks a 2%-3% fee is big.... surprisingly.
Considering clients would have a difficult time being taking these guys serious enough to pay them more than $100.
Imagine this guy:
Try taking this guy serious enough to pay him $1.00
Imagine that. Remember him?
Sure, there was a joke behind this whole 5 cent gimmick.
Some people think paying more than $500 on plans is expensive because they think we are just a plan house and that we have all these plans in drawers and just ready to whip it out so they would think 2% on a $375,000 construction cost of a ~2500 sq.ft. house design is big if not "too expensive".
Carrera, that's correct I'm not licensed, I do light commercial work, sometimes shop drawings and what not. Should of stated that.
In your case, Miles, now looking into who you are... I probably can't imagine you, or even your father at that, to seriously entertain the notion of doing a residential design project for 2-3% unless it is really big house with a fairly high cost per sq.ft.and you are just doing it for a friend or something so you won't be profiting as much from for the work involved.
clairev,
You are in Texas... right? Not sure if I am comingling other threads on the same line.
The projects would be light commercial up to like 20,000 sq.ft. if I remember the Texas exemptions, correctly.
You fees for commercial work seems a bit low for the work involved. How are you doing on building business capital besides paying for your place to live? Are you generating capital. What's the contribution margin per project rendered?
Carrera,
Texas is a fairly price pressured market as the price ceiling in the residential side is pretty low there.
Richard, when establishing a fee to charge it is the market that dictates and establishes fees. The notion of sitting down with a calculator and totaling everything up will never yield a competitive number. The market dictates fees in many ways including those scoundrels you’ve been worried about. It’s a matter of making the sale then sitting down with a calculator and figuring how to do the job and modulate the services you offered to eke out a profit.
Then during the job the trick to holding onto the profit is a matter of keeping a running tab on things, daily on small things, and making course corrections to hold to the budget. Just remember, when you contract to do a particular task it just states the task title and leaves the content wide open. Even if they tie you down to daily site visits it never states how long you have to stay there.
Taxes – I would keep taxes out of your project budgets. Your company (LLC) doesn’t pay taxes; profits are a pass-through to your personal taxes.
Cash – In what you are doing cash can be one of the scoundrels and you have no clue its happening. Guys doing jobs for cash can cut 30%+ off their comparative fees and never even get scratched. There is no level of modulating services to combat that. Housing is huge into this, clients aren’t required to send 1099’s on personal expenses like design fees for their new house and don’t.
Texas – Exempt up to 20,000 S.F.!? Man! I don’t have the facts at hand but that has to be 40% of the market. Did you type that correctly? To hell with going to school, just move to Texas.
“Holy dog shit! Texas? Only steers and queers come from Texas, Private Cowboy, and you don't look much like a steer to me, so that kinda narrows it down.”
(Full Metal Jacket 1987)
The issues I've been running into is random people and Mexicans charging little to nothing for work, there's a guy a few miles away, he works at a custom millworker shop and does plans on the side, the guy charges $.20 cents a square foot. That's one, another is a guy that only charges $.25 a square foot, and with that guy, I just got a client that did the design with him, the whole plan was in one sheet, no cross sections or detailing, just your elevations, floorplan, roof plan, foundation plan and nothing else. One the worst plans I've seen lately. The plans didn't pass review for permits and many subcontractors said they were wrong. The guy calls me and that he had paid $300.00 for the plans. Like wtf. Said he really needed to sit down with me. Long story short, I met with him in my office, showed him one of my plans which consisted of 18 pages, and then charged him 2,500 dollars for design alone. The guy freaked out and told me it was way too much and that I was way too expensive. Told him thank you, walked away, then came back and asked me if I could lower the price and told him I couldn't help him at the cost he's asking for. He came back with 700 dollars which insulted me even more.
What I do and what the other guys do can't be compare quality of plans with so much detailing and service, to se other what I call sketcher that does design work.
What do you guys think of that?
Carrera,
The 20,000 sq.ft. is correct. Two stories though. I don't recall if its gross sq.ft. of building or ground area.
http://www.tbae.state.tx.us/Content/documents/LawsEnforcement/ArchRequiredFlowChart.pdf
clairev,
"The issues I've been running into is random people and Mexicans charging little to nothing for work, there's a guy a few miles away, he works at a custom millworker shop and does plans on the side, the guy charges $.20 cents a square foot. That's one, another is a guy that only charges $.25 a square foot, and with that guy, I just got a client that did the design with him, the whole plan was in one sheet, no cross sections or detailing, just your elevations, floorplan, roof plan, foundation plan and nothing else. One the worst plans I've seen lately."
That is why I was hesitant in referring to you as one of those scoundrels. You're pressed down by the scoundrels in the market hurting your ability to charge more.
I have been dealing with this issue for a little while now. How have you overcome that issue?
Not entirely.
I been working with this issue for awhile myself. Trying to be able to deliver the services necessary for the work to be competent not just meeting the code but actually competent.
However, one thing you have going for you on one part is you have the architectural stone and veneer. So you can possibly subsidize some of your losses by rendering fees below break even point from profits from the architectural stone veneer.
This is a common tactic used by corporations that manufactures game consoles and sell them way below cost because they subsidize the loss through software which is historically high contribution margin. The disc costs maybe $0.10 and the package total may cost $0.75 and they sell the software for $20-100.
You need to use something of this sort if you are going to compete on price.
They are probably heavily subsidized. Often through fraudulent means. I'm not suggesting an actual fraudulant method of subsidizing costs.
You are just taking some of the profits on a high contribution margin venture and passing it over to something that you are getting zero contribution margin (just breaking even) or worse.... losing money on every sale of service. The trick is you need enough contribution margin on your other 'ventures' (architectural stonework and veneer) to absorb. That's your challenge.
For me, I would do software to subsidize the losses but it isn't the 1980s or early 1990s anymore. What level of work I need to put in just to be able to sell the software needs a corporation with a significant software development team.
This makes things a bit challenging in that regard.
However, charging higher prices in part means I am not accepting clients that aren't ready for proper design services or is too cheap to pay the proper fees.
With that prospective client, you might have to be blunt and say, if you can afford to build a $425,000 to $500,000+ sq.ft. home that he can afford to pay the $2,500 design or more. You need to educate them that you are delivering a service not a product with building design work. You are providing design service and that your services involves much more than just drafting buildings and be clear that the service is not a stock plan shop.
can afford to build a $425,000 to $500,000+ sq.ft. home that he can afford to pay the $2,500 design
0.005% design fee? Now you're talking.
Getting pretty windy in here.
Clairev, Richard is correct, people at that level do look at it as a product….but stopping into a stone shop to get plans doesn’t help that perception. If I were in your situation as a vendor of product I’d offer the plans for “free” as a part of a bigger package of materials and install labor….simply hide the cost of the plans into the packages. Design-Builders do it all the time so do homebuilders and landscapers.
Yep, Miles, the $2500 is pretty small fee. Maybe the project was smaller. Then again, the lower fee because some of the work was already done. Okay. perhaps. Don't know the exact conditions of the matter. Correcting errors and making a proper set.... might not be the same as designing from scratch.
I'll start another thread regarding costs and issues.
Where has everyone been? Has anyone recently searched for the job listing "architect" to find almost every listing a "Data Systems Architect" or "Solution Architect", "IT Architect" "or some other tech sector "architect"? The name is lost already. You don't see "IT Doctor" that often do you? I bet that the AMA would be suing left and right if that term was being used. Let's stop fighting amongst ourselves for the sacred title. The profession as a whole needs to defend the "name" so it does not get eventually usurped and relegated to a secondary definition.
Actually, the AMA is suing Dr.Dre. Actually when you have a doctorate your are called a Dr.
AMA suing Rug doctor.
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