How to determine standard rates? Exceptions?


Hi all, 

How do we determine our standard rates? When do we make an exception?

Some work has come my way from volunteering last month. Since this is private word of mouth connection, I'm now having to determine my rates. How do I go about creating my rates without undermining our profession?

To be more exact, I'm being asked to create a site plan roughly 200' x 200' with several elements such as fence, watch towers, and display boards. This site is to host historical content. 

Please advise. 

May 26, 20 12:54 pm

I am by no means an expert at determining rates for architectural services. However I will give you what knowledge I have.  

For architectural services for a building design we typically charge 7% of the construction costs.  This is then broken up into 20% SD, 20% DD,  40% CD, and 20 CA.  Obviously this percentage and fee breakdown depends on the project type, it's location, and the types of services the client has asked for.  

Without knowing more about your project and your situation (licensed , insurance, is this a side gig, your location, your experience ect) I would say you should charge an hourly fee.  To determine that rate you're going to have to wing it.  A good rule of thumb is to take what you want make an hours in take home wage and multiply it by 2.5 or 3.0 it to account for overhead costs.  This number would be your billable hourly rate.  

May 26, 20 1:35 pm  · 
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The project that the OP describes sounds like mostly exhibit design, which is a niche in which design work tends to be very much disproportionately higher than would be covered by the percents usually used for residential or commercial architectural design. Professional exhibit design firms typically set their fees in the range of 20% to 35% of an exhibit's total budget. When I take on this type of project I put on my exhibit designer hat, rather than architect, when developing fee proposals.  On the other hand, a lot of this type of project are for entities for which I might consider discounted rates or pro bono work.

Going through the exercise of determining an hourly multiplier is a good thing to do, for your own in-house fee development purposes, though personally I never bill hourly.

May 27, 20 10:56 am  · 
1  · 

Very interesting. I've never done exhibit work.

May 27, 20 12:25 pm  · 
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About how to "make an exception": lots of firms have different tiers of rates, that they use for different types of projects, and sometimes for different regions in which they work.  It's not unusual for a firm to make the decision to take on some amount of discounted work for the sake of the community - such as for non-profits or for public projects in the town(s) where the firm's partners or staff live, and even to take on some amount of totally pro bono work.  Discounted rates for projects for the "public good" are sometimes set at the break-even point or sightly above it.  

Determining the line between giving back to one's community and "undermining the profession" is the harder part of this, and takes some collective introspection within the firm, to develop an official policy.  For most firms, for a project to qualify for discounted rates it needs to be for a non-profit and have clear, definable benefits to the community.  In some firms there do tend to be things like residential projects for friends of the partners that sneak into the firm's lineup at discounted rates or even as freebies - but a lot of firms have strict policies against that sort of thing, and prescribe that if it doesn't meet the public good test then the client should either be paying the full rates (or the firm member should deal with the project on their own time, outside of the firm, if it's a favor-for-a-friend situation - but then it's up to that staff member taking on the side project to determine what's a close enough connection to make it worth the undermining of the profession...

May 26, 20 2:45 pm  · 
1  · 

It is true that some firms will have discounted rates for certain clients / charity work or may not bill all of their hours to client for some project work. However that's not what the OP was asking about. The OP to me appeared to be asking about how to determine basic rates for services.

May 26, 20 3:36 pm  · 
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Your reply above had already covered how firms determine basic rates. As I indicated in my first sentence, I was addressing the OP's other questions: "When do we make an exception?", and the concern about setting rates/policies for such exceptions, without generally undercutting reasonable rates.

May 26, 20 10:37 pm  · 
1  · 

Fair enough. I interpenetrated the OP's question to be more about determining fees in general as it seems they have no experience doing so. Also they are asking about fees for what appears to be a very simple site plan.

May 27, 20 9:43 am  · 
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A primer that isn't bad.

May 26, 20 3:35 pm  · 
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Interesting read.

May 27, 20 9:50 am  · 
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My apologies for the lack of interaction during the discussion.  I've been reading all post, researching the link provided, and applying what I understood. I've come to a number for now. All has been very helpful and appreciate the insight from everyone. Will need to revisit again as my services develop. Thank you all once again! 

Jun 1, 20 8:03 am  · 

I highly recommend getting this book by my friend Keith Granet:  The Business of Design

Jun 1, 20 9:35 pm  · 

Will look into it. Thank you Erik.

Jun 8, 20 7:57 am  · 

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