Charging a fee for design work.

MJK

LawnSite Senior Member
Location
Michigan
We used to offer free designs, then give a price for all the work in the design. This helped us win some projects. The problems is over time the cost of designing and not getting the job started to rise.

Over the last 2 seasons we started charging a design fee. I only charged my cost for the design to keep the price low. Now we are running into more and more people not even wanting to pay at all for the design. More and more contractors in our area are doing this for free.

I'm having a hard time implementing a good system for this service. Anyone care to share there plans?
 

DVS Hardscaper

LawnSite Fanatic
Location
County Jail
There's a lot of topics on this great forum covering this issue.

This is an area where I have been struggeling with for the last 5 years. And yeah, imagine being in this business for 16 years and the amount of time WASTED on dead end designs. I bore easily and I'm burned out from designing, which I'm actually a very good designer.

The bulk of the problem is the *other* contractors. So many of them NOT charging. They are so afraid of missing out on a sale. It's a rat race.

And the usual internet forum response is "set yourself apart from the competitors and sell yourself......" Or the "pre-qualify your callers"

So thats what I do, I educate the prospective client. And they usually comment that I was the most thorough contractor they met with and how impressed they are. And I still can't get them to pay for a design. "Well wait a minute, why should we pay for a design when the other two contractors aren't charging us?"

I've gotten a very sour attitude about doing designs, let alone for free. After 16 years, I don't need to practice designing. I have my own life to live. When there's a family and kids in the picture your whole outlook on everything changes tri-fold.

Last spring a lady a few miles from my house wanted a nice patio at her house. About $16k. There was no doubt in my mind that she was serious. I dedicated a whole saturday to designing her patio and drafting a formal proposal. Go to present it to her and she was totally emotionless. No comments. No nothing. just an "ok thank you". Couple months later her patio was been installed by others, along with some trees plopped in the ground here and there. I can't blame her, no one forced me to do the design for free. So much for that magical "pre-qualifying". Live and learn.

Years ago I had a guy in an upscale golf course community call for a patio. I explained on the phone that there would be a charge for the design. He replied "I'm serious about the work and really like the work on your website but I refuse to pay for a design, won't you please come talk to me and see what I want?". So I agreed. Next we had to arrange a time to meet. He refused to meet during the week, and INSISTED that I come out on a Saturday afternoon, and he was nasty about it. More or less said "if you want the job, you'll come out when I'm available". So we went back and forth and finally I agreed. I get there, we go around back and he was an ass to me while we discussed what he wanted. After seeing the area and going over all the logistics we go inside for me to do my presentation and to go over the material possibilities. He's still being an A$$.

I go back to my office and come up with a killer design. Probably one of the best designs I've ever done. Very creative, yet practical, along with classy. I go to present it to him.....and he's still being an ass, treating me like a 2nd class citizen (whatever that is, but its a term we hear alot). I take the design out and show it to him. His face lights up. He and his wife LOVE IT. I think it was a $50k patio. His whole demeanor to me changed instantly and he started talking to me like I was family. I thought for sure I had the job in the bag, they liked everything and even commented that the price was what they were willing to spend. He was ready to sign the contract right then. She, said "well we're waiting for another quote to come". A slam dunk!? WRONG - They went with someone else. I didnt hear from him for a few days and when I tried to do follow up calls - he wouldnt answer. So I waited about 2 weeks and called his wife at home from a different number I have. And she said "oh he said he would call you, we went with someone else, and it wasnt an easy decision". About 12 hrs of design time wasted. 1 hr of measuring their property wasted. 2 site visits wasted. Again, no one held a gun to my head.

One trait that all of us business owners share is that we're all optimistic. I clearly remember my horticulture instructor saying "Mr. Hardscape, landscapers are always optimistic", and it's true. We believe that every job we look at will be ours. When in all reality that's wishful thinking. We allow ourselves to believe that the prospective client will respect our time, even though the last 114 prospective clients didn't.

I dont have a solid answer to the problem. I started this company in 1990 and this April will mark our 16th year doing hardscapes. I've tried everything. You name it, I've tried it.

In 2011 I cut way back on doing free designs and chasing dead end leads. My closure rate for hardscapes has increased. What did I do? I started pushing sales of another service we perform, relying less on income from hardscapes, allowing me to be more selective about what jobs to chase.


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DVS Hardscaper

LawnSite Fanatic
Location
County Jail
And part of the problem is - since the recession people are obtaining 3-4 estimates for a job. Just about every prospective client I've met in the last 3 years are obtaining multiple quotes.

If all 3 or 4 of us price quote providers are all charging $125 for a simple quick design, that adds up.

Think about it. You're a homeowner wantin a patio. You're gettin 3 quotes for this patio. Are you willing to pay each price quote provider $150.00 for a design???? I know I would'nt.

So the next angle is folks here will say (spoken in a whiney voice) "well you need to sell them a $1200 - $2000 masterplan and they have all 3 price quote providers do a price for the work on that plan".

Problem with that is if you use outside architects like I do. Architects know many contractors and tend to *look out* for the ones that give them the most work. My level of trust in them isn't very high.



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BrendonTW

LawnSite Bronze Member
Location
Oklahoma City
I have a few different ways in which I try my best to tackle this issue.

I have been doing quite a bit of design/build services for commercial properties as well as some for municipal properties. With repeat customers (or ones who have NOT posted a bid request yet), I highly encourage them to hire a a consultant (obviously myself) to view the site, discuss their desires, do all of the measuring, and create the design. Once that is done, they take bids on the design.

We will make the money on the design and consultation work regardless, and then it is my responsibility to either be able to price my bid on construction low enough to win the bid, or to have maintained a good reputation for quality among references or in past work completed for the customer. Hopefully I will win the bid as well. Another selling point I use is that if they use us for all of their consulting and designs, then they will be guaranteed a design that is consistent with other properties I have designed. Also it will ensure that the design and specs are done right, and if anything isn't done right, it is on the contractor who installed it.

Commercial projects already have a design and spec sheet for bidding construction. The other half is either they have not started taking bids, in which case I will advise/sell them on all of the reasons to hire a designer/consultant first, OR I get asked to bid on something that is already in progress and does not have a design with it. In which case I either include the design price in the bid (which I might lose) OR I pull out of my annual budget for estimates/design work.

Being that I am in the maintenance side of the industry as well, I do a LOT of free estimates. In my annual budget I plan for the time I spend on estimating (and separately by division for the time I spend on residential designs or commercial with no design provided).

I didn't do anything like this before, but now that I've done it, it is hardly painful to do free design work when I actually see the account staying on budget. And if the account is over budget, it just means that I'm doing better than I planned on. Given that all of those designs/estimates are selling.
 
OP
M

MJK

LawnSite Senior Member
Location
Michigan
so your projecting how many designs you are going to do in a season, then adding that to your overhead expense for doing work in a given year? Or did I miss read?

If that is the case that seems like a good idea to help try to recover those loses.
 

BrendonTW

LawnSite Bronze Member
Location
Oklahoma City
Yeah. I base it off of the number of "free" designs and consultations that I did the year before, plus whatever percentage I think my sales of residential & non-designed commercial will grow by.
 

JayD

LawnSite Silver Member
Location
Indianapolis, In
Would this work? Tell them there is a fee for the time spent on the design but if they go with you the fee is taken off the cost of the work?
 

andersman02

LawnSite Bronze Member
Location
Snowy MN
A friend of mine has a very large and repitable (sp?) design/ build business and that is what they do..

basically there are 3 steps
first they meet with the client at their place
next the design is made
then the design is proposed AT there my friends place of business (very nice place, not just a shop)

they dont charge for the initial visit, but do charge $100-150 for EACH side of the house on a design, then if the homeowner decides to go with them, that fee is knocked off the final price of the install bid

seems to work very well for them
 

SunriseGardens

LawnSite Member
Location
Darien, WI
I have worked for four different companies prior to doing my own thing these last 3 years. Anyway, all three companies did it different, one place charged per hour, one place charged unreal fees $1000 and up for big stuff, the last place that I worked at did it for free.

You could call it a loss leader to get more work, but I was starting to find that when my reputation for good design work increased, people in my sales area started calling for free design work. I started charging fees when I noticed new walkways and patios in the easy spots, and the customers asking for drawings and ideas for the tough locations, "don't worry about that patio, we really want to work with you, how would you tie the retaining wall to the foundation in this area by the way....."

Since I have been on my own I charge for my time, I value my time and if people choose not to respect me or my time, then they can find someone who is willing to be treated poorly. "I'm sorry Mrs. Jenkins I can't help you, I'm sure that there are other contractors that can."

Anyway, my point is that good design and problem solving has value. If we don't value it, then who will?
 

etwman

LawnSite Bronze Member
Location
central PA
I actually vendured over to this side for once. Here's my response plain and simple:

1. Charge for your designs, it devalues your company if you don't. You get what you pay for and I've seen way too many "stupid sketches" that clients think are "buildable" that truly aren't because they lack elevations, scales, etc.

2. We've entered a time that municipalities require detailed information to approve backyard living areas. They need that information for approval, free stuff often doesn't have that information. Impervious calculations, setbacks, etc.

3. Like DVS said your retention rate will rise if you charge for drawings. There's nothing for stupid than spending time designing something for free for "A" possible client, when client "B" who is willing to pay for designs and is serious about using you, is waiting.

4. Promote the value of your company and what it brings to the table. We have two LA's in house. The talent we have in design and construction is almost unmatchable in our area.

5. Avoid the clutter in your office. If you design for free you had better get a storage facility for all the designs you don't build.

6. You won't get what you don't ask for. We billed $2,650.00 for a design the other week. We have very detailed, multi-paged design agreements based on project parameters. Clients understand it from day one and realize the value behind it. Educate your clients.

That's my two cents.
 

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