Tag Archives: fees

What’s with percentage fees?

I’ve been thinking a lot about fees lately.
A couple of reasons (apart from needing money to pay for childcare):

  1. I have a great relationship with a number of clients who are paying me hourly. I find this method of payment lends itself to an open and collaborative process where on one side the client’s wants and needs are being prioritised and on the other side I am being paid for each hour I work…win/win
  2. I have a deteriorating relationship with a consultant – where I am on the other side – and feel taken advantage of by an exorbitant hourly rate…lose/lose

So is an hourly rate a better way to charge for architectural services than a percentage fee?

To clarify in case any non-architect reads this post, a percentage fee refers to a fee for architectural services that is tied to the construction cost (or estimated construction cost or client’s budget or some even vaguer idea).

Some of the recurring questions that arise with percentage fees on projects:

  1. How do you ensure adequate fees for small (ie low budget) projects?
  2. How do you ensure clients their budgets are not being ‘blown out’ for the sake of more fees (or appear this way)?
  3. How, if the budget does increase, do you tell your client ‘it’s not my fault and btw you need to pay me more’ without it looking like 2.
  4. How do you encourage more people to explore architectural ideas and potential (with an architect) without the need to commit to a full architectural service?

It is this last point where I believe there is so much work for architects.  We can actually provide a meaningful service that may not be about an end product (or a photo of an end product). The idea you have to commit to an architect (and an architectural project) after one meeting is like getting married after a one night stand…

Ummm I might stop with that analogy at this point, it doesn’t really translate to the whole hourly rate argument as well as I had hoped.

Hourly rates are good.

 

 

 

 

Will work for shoes

Practice Management question of the day:
‘Would you work for free or what is your price’?

As I flashed my new shoes around (part payment for a shoe shop I designed) we discussed what we would work for.

IMG_4371

(nice huh?)

I really wanted to encourage an open dialogue among the students about what they would charge for student commissions, or even whether they would do them.  Having had no idea about this when first approached by an acquaintance of a friend (or relative, or just a relative, all right is was a car port for my mum and dad that never got built) I thought how much I would have appreciated some guidance and peer support at the time.

Most students were actually hesitant about doing their own commissions wanting to gain experience in a practice first.

However, when it came to payment were they to accept a commission, nearly all of them thought they should be paid for their efforts.  Their price ranged from $25-$40/hour.  In the end we thought perhaps a lump sum was a better way to frame fees when starting out.  This way you can invest as much time as you need / want to do the best you can.  Whether it takes you 50 or 200 hours is your choice.

Either way, a good starting point in is to be paid what you feel comfortable asking for. It might sound dumb, but if you can’t be confident asking to be paid then chances are you won’t be.

When in doubt think about what you earn as a waitress and charge at least that.

(What surprised me is they are earning the same in hospitality now as I did 15 years ago! Pity everything else has tripled in price.)