I've got a small design-build firm and I'm looking for input on my fees. I've got the fee structure worked out, and I've got placeholder fees included, but they're borrowed from either architects OR general contractors (I'm both). I need to figure out a fair pricing structure, probably including a discount for the bundled design/build services. I'd charge a full design rate, but knock off a percentage if clients stick with me for construction.
Here's the structure, with placeholder fees. I live in Chapel Hill, NC, fyi. :
75 cents/ sq. foot to document existing spaces and conditions.
1% deposit of estimated cost of construction at beginning of schematic phase, to be applied towards final balance.
12% of cost of construction for design and construction drawings
20% of cost of construction for general contracting/ project management.
How do these fees look? Crazy or on target? And what's a reasonable discount for bundling services?
Grateful for input! Hard numbers are ALL over the map on this topic...
Thanks.
thisisnotmyname
Nov 14, 16 2:17 pm
Can you clarify on these:
Are you doing commercial or residential? What is the average construction for your projects?
x-jla
Nov 14, 16 2:23 pm
From my experience gcs rarely explicitly state the percentage they charge, but rather imbed it into each item in the bid. I work in landscape though so it may be different and more formal with your area. Design on the other hand is usually either rolled into the overall agreement at a certain point and treated as a deposit, or rebated (partly) upon signing the build contract. Also, being that you are designing and building, your final drawings will be less neutrally contractual by nature. If your doing design build but still treating each separate what's the benefit to the client? It has to read as a singular service or the design/build unity gets lost and your essentially running two different businesses. I find it hard to believe that a person will pay a full design fee from a design build company. 12% is fair for design, but not very competitive for design/build in my area. Almost all of the ones I've dealt with give design away dirt cheap up front and then make up for it on the build end with design fees more or less "hidden..." Most clients who go to a design build company are too cheap to pay for a designer upfront...and if you give them full plans and then show them a 20% go fee they are likely going to use those plans to shop around...You need to create an incentive to stay. And the plans need to be delivered in a way that ensures build contracts are solidified prior to any final drawings being delivered.
Hi all,
I've got a small design-build firm and I'm looking for input on my fees. I've got the fee structure worked out, and I've got placeholder fees included, but they're borrowed from either architects OR general contractors (I'm both). I need to figure out a fair pricing structure, probably including a discount for the bundled design/build services. I'd charge a full design rate, but knock off a percentage if clients stick with me for construction.
Here's the structure, with placeholder fees. I live in Chapel Hill, NC, fyi. :
75 cents/ sq. foot to document existing spaces and conditions.
1% deposit of estimated cost of construction at beginning of schematic phase, to be applied towards final balance.
12% of cost of construction for design and construction drawings
20% of cost of construction for general contracting/ project management.
How do these fees look? Crazy or on target? And what's a reasonable discount for bundling services?
Grateful for input! Hard numbers are ALL over the map on this topic...
Thanks.
Can you clarify on these:
Are you doing commercial or residential? What is the average construction for your projects?
From my experience gcs rarely explicitly state the percentage they charge, but rather imbed it into each item in the bid. I work in landscape though so it may be different and more formal with your area. Design on the other hand is usually either rolled into the overall agreement at a certain point and treated as a deposit, or rebated (partly) upon signing the build contract. Also, being that you are designing and building, your final drawings will be less neutrally contractual by nature. If your doing design build but still treating each separate what's the benefit to the client? It has to read as a singular service or the design/build unity gets lost and your essentially running two different businesses. I find it hard to believe that a person will pay a full design fee from a design build company. 12% is fair for design, but not very competitive for design/build in my area. Almost all of the ones I've dealt with give design away dirt cheap up front and then make up for it on the build end with design fees more or less "hidden..." Most clients who go to a design build company are too cheap to pay for a designer upfront...and if you give them full plans and then show them a 20% go fee they are likely going to use those plans to shop around...You need to create an incentive to stay. And the plans need to be delivered in a way that ensures build contracts are solidified prior to any final drawings being delivered.