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Design Fee Structures

18 years ago

It is well past time to separate this from Sam's thread - the poor guy must be pulling his hair out.

I think DD was being misinterpretted. I don't want to speak for her, but since the beginning of what should be a really good discussion was started, I'll try to rescue from the personal to the technical.

I respect anyone who does not want to participate and commend anyone who does. Fee structure does not have to include bottom lines like mine did. That just happens to be the way I do it and the way I chose to present it.

I think that terms like "assessing the amount of time" and charging an "hourly rate" without being specific is a legitimate way that someone could explain how (s)he charges if that is his/her way.

Others might charge by how many documents and what type are produced. Something like a standard plan package. I have seen several online designers do it that way - often having photoimages, a plan drawing, and plant information and care sheets. That explains the method without divulging anything more.

Some charge a % of the price of the built work - sometimes collected from the contractor other times the client.

A lot, and I do mean a lot, (I did this many years ago until I learned better ways) try to figure out how low they think they need to go in order to still get the job. Most don't admit it to themselves, but it is what they do.

Some charge a standard flat rate site unseen.

One problem a lot of designers have is that they cling to closely to things that don't matter. They just don't want to give up the funk. It is amazing what you learn from the reactions of others when you tell them something whether it is about design or how you do business. If you really think about it, how our pricing structure is perceived by potential clients is what makes or breaks the sale at the end of everything else to that point. Assumptions are what is left in the absence of that information. Sometimes a wrong assumption keeps people from further pursuing something that they would have with the right information.

I have observed that many people who venture into areas of the unknown - in this case hiring a designer, they will cling to either their first experience, or something that was told to them, as being a universal standard (ie, all landscape architects do hardscapes, but don't know plants - landscape designers are all plant experts).

The same is true with their perception of how the design business works. They tend to believe that their first experience, whether it is an unreturned phone call or a particular fee structure or their style, is how the rest of their experiences will go. How many threads from dissapointed would be hirers of designers? You can ignore that, or you can research it and react to it to help the situation.

Putting it out here will get a wide audience. Some will be pleasantly surprised that there are people out there who fit their needs. Some will tell you why a method is offputting to them. Some will be valid. Some will not. But, it gives you a chance to see how you are perceived which gives you a chance to correct misperceptions.

Another thing is that not all jobs are the same. This is a chance to explore other methods that may be more applicable to new or occaissional situations.

I've been amazed over the years of participating on this forum that so many things that I thought people saw the same way that I do are not viewed that way at all. I thought that everyone did certain things a certain way only to find out most did it a different way (ie, selling a landscape build with a design included vs. selling the design first and then the landscape after or planning the layout of plants followed by a bed shape which fit them vs. making a bed and then fitting plants into it).

This all comes from giving out information and finding out others reactions to how they perceive what you said. Its hard to learn more than your teacher knows. Once in business, we tend to rely on ourselves as teachers. When you consider that it is hard to learn more than your teacher knows, it is that much more difficult if you are your teacher.

Comments (20)

  • 18 years ago
    last modified: 11 years ago

    Good luck with this one Laag.

    Speaking of teachers and the irony of timing, A former professor of ours called me today to discuss residential fee structuring.
    Talk about when the student becomes the teacher and the teacher becomes the student.
    I'm going to have lunch with him and his partner next week, I'll pass along a hello to him if you'd like.

    ps. you might enjoy checking out the Landscape Architectural forum Land8lounge.com

  • 18 years ago
    last modified: 11 years ago

    I doubt if he'll remember me (TC?). I only took one seminar from him, but it was a really good class - grading & drainage, if I remember right. Send my regards just the same.

  • 18 years ago
    last modified: 11 years ago

    I wonder if, yet again, I'm outside the norm in how people do things...? While I've only once (just recently) hired anyone to do something related to landscaping (remove part of a concrete patio and replace it with paving stones...), I have frequently hired contractors for small construction jobs and once hired an architect and contractor to do a major renovation and addition to the house. In none of those cases did I ask about, or care about, fee structure.

    What I asked/cared about was (a) did they do the sort of work I needed done? (b) experience/references (c) quoted cost of the job - which usually consisted of part a fixed quote and part variable to deal with unanticipated problems or changes we might request as the work progressed. So it was the final projected cost that was the relevant thing for us. How the contractor broke that down was not something we asked about or cared about.

    And I would never start a conversation with a potential contractor by saying 'I have $X to spend, can you do the work for that?' To me, that seems like an open invitation for the contractor to charge you that, even if he could do the job for less! When I start by asking a potential contractor if he does the sort of work we need done, it is partly to get a feel for whether our job is too small - or to big- for him. I describe what I want done in enough detail that we can come to some mutual understanding of whether we're talking about a On small jobs, we often don't bother with multiple quotes. We usually deal with contractors we've used before and are comfortable with, or ones friends have recommended, or ones recommended by a local building supply company we deal with regularly. If we're comfortable with the contractor we're talking to, it's not worth the effort and time to get multiple quotes to save a few hundred dollars - or even a few thousand on a bigger job. We place more value on hiring someone we are likely to work well with and who we are reasonably confident will do a good job.

    From the sounds of the posts on the other thread, it seems that pricing structure is a bigger issue that we feel it to be...? Or is there a disconnect between how clients view that than the contractor does...?

  • 18 years ago
    last modified: 11 years ago

    OK.......I'll bite :-) I really don't have any issues regarding discussing my rate structure and it may very well help to enlighten those out there who are mulling over the value of hiring a professional designer.

    Let me first preface this by saying that I have a rather unique client base. The majority of my clients are middle income urban and suburban homeowners with typical lot sizes ranging from 5000sf to around 10,000sf. They are split about 50-50 as to those who will do the majority (if not all) of the installation work themselves and those who will contract to have the work done for them. On second thought, I'm not so sure how unique this client base is - based on the queries of posters to this forum seeking help, it may very well be the norm :-)

    I charge a flat rate for design fees that is based on: 1)the size of the property/project, 2)the complexity of the site, and 3)the scope of what the client envisions for their landscape. My fees range from $500 (the minimum for any drafted plan) to $3500 (larger properties with extensive hardscaping and other amenities) but the majority fall into the $850-$1500 range. I charge an hourly rate for design consultations ($125 plus mileage) and also for project management services ($50/hr).

    I chose to go with the flat rate because a firm quote for the design eliminates any surprises to the client and with my client base, that seems to be important. And, technical dinosaur that I am, I draft by hand and that is a time-consuming process that would unnecessarily impact a hourly rate structure. After doing this for some 15 years, I have a pretty good handle on how long it takes me to draft a complete set of plans based on the scope of the project and that is factored into the quoted fee at what I feel is a reasonable rate of compensation. Were I to computerize my drafting (which I have considered and continue to do so), it would translate to a much higher hourly rate, but there is something quite appealing about a well-drafted, hand drawn plan that clients are drawn to and I personally enjoy the process. It would also mean a financial committment in terms of software and equipment that my modest design business - which is a sideline, not my primary means of support - perhaps does not justify.

    It may be just my rather specific client base, but firm budgets are seldom a consideration. Budget is always a part of the initial client meeting/discussion - I make it one if not brought up by the client - but for the most part, either because they're doing the majority of the work themselves or because the scope of the project is fairly modest, budgets tend not to be a limiting factor. Another reason budgets tend not be a restriction on the project is because many of my larger and more complex projects are phased in over a period of years and even some of the smaller DIY landscapes are long-term projects as well. Therefore, it's pretty difficult to make a direct comparison of design fees to total project cost.

    This is certainly not going to be a rate structure that works for everyone. I realize that the way I conduct my business is rather specific to both my lifestyle and to my client base. But based on the level of design activity I engage in, it works for me and it accomplishes what I feel is a very important ability to bring professional design services to middle income homeowners with modest (or even small) properties and and not unlimited budgets.

    I would add that I generally have 2-3 design projects going at any given time and their timeframe for completion is typically 45-60 days, given site/client visits and my schedule. This does not translate to a living income by any means but it is a pretty lucrative supplement.

  • 18 years ago
    last modified: 11 years ago

    First let me thank gardengal for her honesty and input. This fee structure is quite in line with what I have seen in this area for LD as a supplementary income and is a good value. It should be good for both sides.
    I have developed business plans for several startup companies in other fields and unless pretty much every hour in the day can be billed to a customer, gardengal's rate structure won't be enough for a family to thrive on.
    If your aim is to have a thriving business, the value of the projects needs to increase or the profitability of each project needs to rise. There is a time in successful, individual contributor businesses where the pricing is based on what you know and not how long it takes you to perform the task. This is at the high end of the quality range and the customers are willing to pay for talent (and you have to deliver). This is a way to increase your profitabiity on projects and limiting the increase in revenue of projects that you can afford to do.

  • 17 years ago
    last modified: 11 years ago

    With all the hoo-haa on Sam's thread regarding designers and their fee structures and whether or not small projects were well served by them, I expected a somewhat greater response to this post than it has thus far received. Especially from those who were so vocal in the previous thread.

    I really do think this type of information is very enlightening and valuable to those who might be considering professional design assistance and I appreciate laag's initiating it. However it would be great if we could generate some additional participation and solicit other viewpoints as the way it stands right now, the information is skewed to a particular client base and a specific way of doing business and therefore seriously incomplete.

    C'mon pros......where's your comments?? And those of you who have been the clients rather than the service provider, what's your experience been?

  • 17 years ago
    last modified: 11 years ago

    I am hoping for more homeowner input on what they think it costs, what experiences they have had, what they expect they will get for their money.

  • 17 years ago
    last modified: 11 years ago

    I will weigh in as past client and potential client. I have become more interested in transparency simply because I have become more knowledgeable myself about plant material and what it seems to cost, and more knowledgeable about the time and expertise it takes to do a site plan, and more realistic about what I can and can't do myself. So I think I am way past the stage of folks going, "You mean you want $500 just to do a PLAN ? I expected you to landscape my whole property for that!"

    I say "seems" because I realize I can't take the lowest price available at a box store for say a 3-gal whatsit, which might be root-bound or have other problems, and say, why can't you get it for that. And also because I know I can't get a wholesale price or volume discount on other plants as could a professional and if their actual plant costs seem low, I won't say to myself, well if it's that cheap I can afford that myself, because again, I know I can't actually go buy the stuff for that. And I know that I can't, or certainly have demonstrated that I won't, plant 5-and 10-gal trees and shrubs myself because hey, you have to dig a REALLY big hole, so I feel I am willing to accept visible labor costs.

    So I guess that would scare some people off 'cause they would think I would look at their actual costs (material, labor, brainwork) and mis-interpret it, whereas some professionals scare me off when they list, crape myrtle 3 gal--$500 or whatever, and it and every other plant includes the labor costs and whatever profit. So it may sound weird, but in some ways I would like to see all the material costs (at cost) and then, here's the $$ we will charge you to design and install with these materials. I may well be kidding myself as to how I think I react to those #'s, but there you have it.

    Now, the flip side is like the poster who said he never thought to dissect the fee structure because he knew and liked and trusted the LD or whomever. So I can see myself a bit there too, but only because I am kind of doing the math behind the scenes, and would have a GENERAL idea of how much soil, labor, plants, and expertise you ought to get for a certain amount of money, or be willing to juggle the math, e.g., say, I really like this person's attitude, plan, reputation more than anyone else's etc AND I think I am also getting enough tangible material along with it even though I could get a different mix (more tangibles and less expertise) from another person.

    As an evolutionary thing in my journey on GW and LD, I also think I value design more now and would be more comfortable with some of those higher design plan $$'s because I am most interested in solving problems and improving design aspects of my property and possibly willing to pay for interacting with the professional and for a "proposal" without committing to the installation by the same person. Again, that might not be the most economical way; an attractive fee structure to me is one in which if you went that way, then a certain $$ would be deducted from the final $$ installation, though again, that's not all that transparent, since the LD would come up with that fee and then say, lookee here, I took $500 off of it...

    Just my idiosyncratic wanderings of the mind...

  • 17 years ago
    last modified: 11 years ago

    I had a house built 3 years ago and contracted with a landscape designer to do the entire yard. It's 3/4 of an acre in size. After doing other properties myself, I was not interested in doing it piece meal over time. I paid about 350 -400 for the plan and drawing, and met with the landscaper 3-4x prior to the installation. The entire front yard, size yard and back yard, including 2 stack stone walls, and 1 brick walkway cost me approximately $20K. Each plant was itemized as well as the labor costs. I really didn't care what the landscaper's fees were, I was paying for knowledge I didn't have. (I have a real estate license and am use to having to defend earning a commission so understand the sentiments here.) I chose the landscaper based on his vision of the property, other jobs he had done and the way we clicked as far as landscape styles. I was turned off to another company that would only take the job at a certain dollar level. I'm probably not the norm here, but I believe I received more than I paid for, and I can still call this landscaper up and talk about any problems I'm having. Overall, it was a great experience and worth it.

  • 17 years ago
    last modified: 11 years ago

    Design Program :

    1. Preliminary design phase and Site Analysis -16 to 20 hours
    -Meet with you to explore your goals , budget & determine the areas to be addressed.
    - Note the sun and shade patterns, soil profile, drainage conditions, , irrigation pressure
    and flow rates.
    -Provide you with two to three preliminary design concept ideas based on our conversation to
    date. These drawings will be drawn to scale and in colored pencil perspective form to
    further aid you in visualizing the concepts.
    These design compositions will reflect and speak to the architectural style of the house
    and will take into consideration your familys lifestyle + long term maintenance needs,
    overall installation budget and code compliances appointed by the county of Marin.
    - Areas to be addressed in this phase ( I ) - FRONT ENTRY / MOTOR COURT AND THE ADJACENT GARDEN AREA BEHIND EXISTING STORAGE BUILDING

    2. Design review meetings - 4 hours
    -Meet to review plans and sketches that were done in the preliminary design phase . We
    will discuss what options and styles that appeal to you . From this exploratory review stage
    we will then define the final design direction We will also discuss the estimated costs
    for the installation of the project. Two meetings at 2.0 hours each is budgeted

    3. Final Design Direction plans / The Master Plan. - 8 to 10 hours
    - Meet with you again to review and verify the final design direction & material choices.
    We will go over the layout and add any changes and revisions if required.
    When this layout is approved I can use these plans to submit to any Design Review
    Boards if required.
    - At this time we will also review the estimated installation costs with the landscape installer,
    any other contractor (s) that may overlap with our work.

    4. Construction Plan Package - 18 to 24 hours
    - It is very difficult to assign a hourly cost estimate to this phase without knowing the full
    extent of the project. The above time estimate is based on our conversation to date.
    - These plans will show the construction details, elevations, and specifications for the
    building of the landscape project at the front entry & adjoining side garden.
    - Included are the Demolition and Grading Plans , Drainage Plans, Hardscape
    Construction Detail Plans , Planting & Soil Prep Plans, Irrigation Schematic , and the
    Outdoor Low voltage Lighting Plans.
    - NOT included are any engineering plans.
    -A set of final construction plans will be blueprinted and I will send them out to any specialized engineers and the bidding contractor(s) . If required the contractor will use these plans in submitting for your building permits.
    Proposed fees -
    My hourly fee is $ 125.00 per hour.
    Fees for the above listed work shall not exceed 15% of the landscape installation construction costs of the project.
    I bill only for only the hours that I work on the project.
    Invoices are sent out once monthly and are due upon receipt. Invoices are considered late after a period of 30 days and will be charged a late fee of 1.5 % per month of the balance due.

    ---- - Design Cost Budget - Front Entry Area and Adjoining front garden : Approximately $ 5750.00 to 7250.00

    Every client is different in their capacity to understand a plan and envision the final project so the documented time estimates are based on an average time frame for a project of your size

    * Engineering Services are not a part of this contract.

    Ownership of Documents
    Original drawings remain the property of the designer. I will provide you with as many copies as requested.

    Reimbursable Expenses
    Blueprinting , photocopies , fax , postage , photo film and developing are billed to you at my cost - no mark up.
    Travel is billed for during peak traffic hours only at the rate of $ 45.00 per hour .
    Travel is not billed for during off peak traffic hours. For this reason it is best to schedule our meetings during off peak traffic hours.

    Conflicts and Disputes
    Any controversy of claim arising out of this contract shall be settled by the common court.

    Construction Oversight and management is separate from this contract for design services.
    Construction oversight is billed out at the hourly rate of 125.00 per hour. Once the building contractor is chosen for the project I can provide you with an estimate for construction oversight.

    If this contract is agreeable to you please sign once copy and return it to our office with a refundable retainer fee of $ 1500.00 as authorization to start the job. Please retain one copy for your records.

    Owner _______________________________________________________ Date __________

    Respectfully,

  • 17 years ago
    last modified: 11 years ago

    interesting d-d.... As a potential client, I wouldn't care about having all those details written out, although I can see why you might want them in writing in case of disputes. We had a rough time line for the house renovation/addition but it was not written into the contract. We had a desired completion date but it was not a hard-and-fast thing because we were all well aware that things never go quite as planned and our desired completion date was somewhat(!) unrealistic (and in fact completion happened 6 weeks later than we had hoped.) There was no time-line/phases written into the contract with the architect either. I found verbal discussion (supplemented with e-mails with the architect...) was sufficient for both sides to understand what was going to happen and when.

    The relevant issue that I would be looking at if that quote was provided to me is the total cost and a target date for completion. The ultimate question would be whether I thought that it was worth paying that price for your particular skills and experience or whether I thought I could use a less experienced/less expensive designer and still get an acceptable design. The details in that quote aren't going to have much of an impact on that decision. Reviewing your portfolio, checking references, seeing examples of your previous work - in person perhaps - are the things that would help me make that decision. How you present your fees (or what goes into that $125/hr.) is of less importance than how you present yourself (i.e. are we compatable/am I comfortable that you understand and can deliver on what I'm trying to achieve...) and how your previous work presents itself are much bigger factors.

  • 17 years ago
    last modified: 11 years ago

    Woodyoak,
    You may not be interested in having all those details written out but they are required by law if you are a licensed landscape architect providing a contract for design services.
    I am not a licensed landscape architect but I respect their code of ethics and play by their rules.
    The rules were set up to protect both the professional and the client alike and can assist in solving a dispute before it gets out of hand.

    In regards to your ultimate question about the " worth paying that price for your particular skills and experience", well that is a independent personal discretional choice that you have the liberty of making.

    My client base is derived from word of mouth referral.
    Clients who are interested in collaborating together on a landscape design project are already familiar with my work .

    If I do come upon the rare occasion that someone is considering hiring me from a non personal referral I have a ( several actually ) portfolio of work that they can look at, projects that they can make an appointment to view, and a list of publications that they can sit down with and read.

  • 17 years ago
    last modified: 11 years ago

    The point re the worth of paying the price should not have been taken as questioning whether you are worth that, but rather as a general statement that one always evaluates the quote in that regard. If I think someone has a skill set and expenience that I want and value, I'm willing to pay for it. On the other hand, there are times/projects when someone with lesser experience/lower costs are just as likely to do a satisfactory job and, in that case, I'd likely choose them.

    I'm not surprised that word-of-mouth is a major source of business. Certainly most of the people who have done work for us were sourced by personal referral.

    All of that says that fee structure is only a small part of what goes into hiring someone to do a project.

  • 17 years ago
    last modified: 11 years ago

    Good point - The question that a homeowner has to ask themselves in regards to hiring a designer is ;
    Am I happy to receive a satisfactory job or am I interested in hiring a designer who is going to exceed my expectations ?

  • 17 years ago
    last modified: 11 years ago

    For routine work where all that is required is that it be functional, satisfactory is sufficient/all I'm willing to pay for. For something more visible/central to the rest of the garden/house/whatever, expectations are higher and therefore we are likely going to be willing to pay for a higher level of expertise - but somethimes you will still choose a less experienced/less expensive person if you think they have potential and will be someone you'd like to work with. Afterall, all the experienced, skilled people were beginners once...

  • 17 years ago
    last modified: 11 years ago

    "...interested in hiring a designer who is going to exceed my expectations?"

    Well, sure! Wouldn't it be great if any hire to provide any kind of service didn't have a leap of faith element to it?

    But that begs the question, at least for me, how does the average client separate the satisfactory from the exceptional before the work is underway and/or completed and there is something beyond pieces of paper on which to base a judgment?

  • 17 years ago
    last modified: 11 years ago

    But that begs the question, at least for me, how does the average client separate the satisfactory from the exceptional before the work is underway and/or completed and there is something beyond pieces of paper on which to base a judgment?

    By doing some leg work.
    Actively look at the designers portfolio of completed built projects. Many designers have online portfolios showing a limited amount of work.
    Ask to see if the designer has an expanded online photo album of completed work. Ask to see their hard cover portfolio.
    Ask for a client reference list and then call the references.
    Visit a project or two to see the quality of the design and the quality of the craftsmanship.
    If the designer is published, look at the projects in the publications.
    If the designer is involved with the various profession trade associations such as ASLA or LCA, ask if their work has received any accolades and or if they have received any special recognition.

  • 17 years ago
    last modified: 11 years ago

    I think I am repeating myself from an old thread, but not too long ago I reviewed some on-line portfolios of built work and found that the installations were so "new" that I had trouble envisioning how they would play out over time. That surprised me because I thought I had that "vision" from personal gardening and reading, etc. I wasn't sure I could tell whether this person, whom I had pegged as being something above, perhaps well above, the typical nursery-associated design person, actually had anything more to offer in design skills. Of course, it's not fair just to judge on that one thing--this person may have been required by her clients to stick with certain things, by budget and other issues. I still may meet with her, but I just noted that the portfolio somehow didn't give me the confidence I needed then to move forward at that time.

  • 17 years ago
    last modified: 11 years ago

    Frankie,
    You hit upon a major pet peeve of mine. A professional putting forth work in a portfolio that is immature.
    To my thinking, a design professional should be showing their best work as it would be seen published in a highly regarded magazine.
    Poorly represented work , work that is immature and work that causes the people whom are looking at it to wonder , " what the F ? , is not doing the landscape professional any good, and in fact does harm .

    It would be better for this professional person to have a well composed close up shot of a single flower than showing a landscape planting with miles of mulch, skimpy little plantlets scantily dotting the landscape and drip irrigation lines sticking up all over the place like dead black spaghetti.

    Don't misunderstand me, I do not think that the viewing public is not sophisticated enough to see a immature landscape and envision it as a lush and full mature one. - I believe some people have this ability.
    But I don't think that they should have to .

    They should be greeted by a well composed photograph that shows the designers abilities in the best possible light.

    That's just part of being a professional who grasps the full spectrum of doing business.
    It's not just about design. It's a whooooooooole lot more.

  • 17 years ago
    last modified: 11 years ago

    I use progression photos in my porfolio - before, after & 2-3 years after said completion. This is how I sell most of my jobs and the maintenance that goes along with it.

    Of course, this works well for me because I have complete control on how the gardens progress as I usually install them and then do all the maintenance myself. The lawn care is typically farmed out to another contractor but the homeowner and I typically work out who does what.

    When the control becomes iffy is when the garden maintenance if left to the mow and go guys, which unfortunately here in the midwest if often the only option unless the homeowner is actively involved.