What Level is Your Design Business?

Approaching Design Fee Packages + Changes with Client/Builder

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    Hello Jenny & Anyone who this may pertain to!

    Our client wanted to book us in for their new build before any of the details were fully understand. No floor plans, drawings yet, etc. This was great! However, we are still fairly new in the new build process so we created a minimum hourly design package for them to book them in and wrote very clearly in the package that we would establish a clear scope of work and estimated hours once the floor plans and specifics of the home were better understood/established. Now that we are there, I definitely feel we will need at least 100 more hours to the minimum package to design and create the detailed spec book the builders will require (not to mention any project management, site visits, etc). I am currently approaching this by giving client 2 scope of work options to approach their hours/project. 1) Increase our package to allow us to cover the detailed designs, selections, and create detailed spec book builder requires. Or 2) Focus hours on key areas that will include design, specifications, CAD drawings, etc. Other areas (ie. kids bedrooms, smaller areas will only receive general design guidance/selections). My concern/question here is, has anyone been in this situation and how did you address it? And 2) If client opts to go with option 2, will builder be very upset/frustrated they not receive spec book for entire home and how is it best to approach this?


    Such a good question!

    When a client is still in that early phase, but want us involved in the architectural plans, etc., we will take a retainer of $3,500, $5,000 or whatever we think is an appropriate amount for the timeframe and then we bill those hours used here and there with the architect, builder, etc. against the retainer. They get a monthly breakdown of our time billing. Then when the plans are finalized we can figure out what we want to charge.

    I think the option#2 will work if the secondary spaces you are referring to don’t include lighting, built-ins, trim detail, tile, etc. Our spec book only includes the rooms and spaces that have those items listed above. For example, my build book won’t have a guest bedrooms unless there is a wall feature, hanging fixture or something that a trade would need to know about. If you can do that, I cannot imagine any builder getting upset.

    For site visits, consider what I talked about in the first week. In your contract specify that that once you turn the spec book over, there is xx amount of hours that they can use for site walks, calls from builders, trades, etc. Depending on the size of the home the hours can range from 10-25 hours (or whatever you want it to be). Then tell them any additional work or site visits will be billed at your hourly rate of xx. I always make it clear that we’re happy to help them past those initial 20 hours, but that it will be billed hourly time once you reach those 20 hours (for example). Then I would take another retainer of $3,500, $5,000, or whatever is best for you and bill against it, just like you did in the architectural phase.

    Hope that helps!

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What Level is Your Design Business?