[mrusk]

I been thinking alot about dale charging 2k for a plan for his 50k job. At first, i thought he was charging to much. Now i think maybe everyone else is charging to little.

I was reading a article in a remodeling magazine last night. Each month that profile a different design/build project done by a remodeling company. Almost every remodeling company says they charge design fees of 5-7% of total job.

If they can do it, why can't we??? Seriously, building a great landscape in no different then doing an addition to a home.

I think it could fly. Charge the people for the plan. Once the people give you the okay you start to pick materials and work out the final details. Then when you do the contract, you just do your last item as a '5% design fee'.


What do you guys think?

[PSUscaper]

Ok.

And why not charge $100 dollars to mow a lawn everyone else is charging $25 for. That will work, right?

I had a friend in college who took a writing class with me. I hated english classes in any way, shape, or form. Well, we both had a paper due one day. I spent a lot of time on that paper. Days in fact.

My friend, however, did his about 2 hours before class, and it was about 1/10th as long.

To make a long story short, he got an A on that paper and I got a C. And you know what, his paper was darn good.

Maybe some people can just flat out do things better and faster than others.

If that's the case, and It takes me 10 hours to do a plan and takes someone else 1 hour, can I charge 10 times more?????

And if other people are charging more money for doing what I do, can I charge the same?

Who gets paid more money? A doctor with 25 years of experience and proven track recored or student just out of med school doing surgery for the first time? Who has more clients and can charge more money. A mechanic who consistantly fixes cars correctly or the shop down the street that hires high school kids who occasionaly forget to put oil in the engine?

Is everyone else charging too little? Maybe, but who is 'everyone else'? Do you realize who you are talking about here?

How many people in the industry have college backgrounds? How many people understand 'basic' accounting? How many people in this industry are happy that they have enough money leftover after paying their bills to buy a six pack and watch nascar on the weekend when they get done working?

Our industry is what it is. At least in other professions, 'everyone else' at least have some set requirements for what they do. Lawyers have to pass the bar. That kind of elimates a lot of 'everyone else' right from the start. All you have to pass in our industry is a breath alyzer test so that you can get home and back in your car tommorow morning and get to the job.....and even that is questionable.

Is the home remodeling business differnet than ours? I will say yes. I do believe people perceive different value in home renovation over landscaping. Not all people, but a good majority of them. Most people spending 200k on a landscape renovation are often the people spending 1 million on thier home renovation. That alone speaks for what people perceive value in. How many people are willing to dump 1 million dollars on a home that has 750k in landscaping and 250K invested in the house itself???? Show me a long listing of houses where the landscape value outweighs the home value, then I'll believe people value landscaping more than building work, and that we as landscapers can consistantly and globally charge the same rates across the boards as other professions.

How about inspections? I did a renovation of an apartment last winter and we failed because a STICKER was left on a smoke detector!!!!!! When was the last time you heard a landscaper on a residential job fail inspection because ONE rootball didn't have the burlap cut open????? If people truly valued what we do as highly as they do for most other trades, would there not be a inspector checking our work daily as they do everywhere else?????

If you need to recover more money on the job because you aren't making your bottom line, then go ahead and charge a 5% design fee. I fact, what are you doing even asking the question. If you need to make 5% more, start charging 5% more RIGHT NOW. Who cares what fancy subgroup you put it under. Just get it on the bill in any way, shape, or form.

BUT, if you are charging 5% more because 'everyone else' isn't, I'd think about what makes you so much different than 'everyone else' and entitles you do so, and more importantly, what would make a client willing to do so when 'others' are not.

[mrusk]

Now you are comparing to different thinks. I think its fair to say that atleast in 'our' area a nice house has about 20% of the total property value invested in landscaping/pool. So a million dollar house has 200k in scaping. I'd say thats right. Then you ADD the LOT price to the equation and the land/landscaping is worth 500k and the house itself is worth 500k.


You can not just compare the price on landscaping to just the price of the house.

[Mac]

I think you missed the entire point of PSU's great post. Read and re-read until you understand.

[mrusk]

Originally posted by Mac
I think you missed the entire point of PSU's great post. Read and re-read until you understand.

I fully understand the point PSU was trying to make. I just do not agree with the way he thinks people value the inside of the home more than the outside.

[PSUscaper]

The question I'm getting to is why do you feel you need to tack on 5-7% more as 'design fee' into the job. (the point I'm making is more obvious to others however)

Let's analyze this.....

You, as mentioned many times before, are the designer for your company, meaning, besides the LA you have who does some touch work on your plans, do all the design work, all the meetings with the client, plant selection, material selections, etc.

You, also, are the owner of the company.

As the owner of the company, I have a question. Does your company cut you a paycheck at the end of the year?

Depending on how you run your company, YOUR salary should be taken out as a overhead cost of running your company.

Being that you are both the designer and owner, are you not ALREADY paying yourself for the time you spend doing design work??????

You are not a multi-million dollar company (well, not yet at least) and do not have a staff of designers, field people, job supervisors, etc. on the payroll who are getting paid for the duties that you would wish to charge for in this 'design fee'.

Do you understand that, most likely, the companies this article are written about (though I did not read it, I am 99% sure it is the case) probably have teams of designers and other staff that cater to their customers needs. Do you also understand that, unlike yourself, who is already collecting a paycheck for these duties (well, at least should be) these companies are paying employees by hour, commision, salary, for the work they do? And do you realize that, just as you would factor in a laborers wage into a job, that they are factoring the wages for these employees to do design work by adding 5-7% or the job because that is what those employees COST them and that is what they need to recover to make a profit????

The bottom line is, you are not one of these companies. And the bottom line is, its not a matter of charging a 5-7% design fee onto a job to cover your design time. You should be accounting for that time in your own salary ALREADY, which it sounds you are not. If you are missing out on money on the job, you need to be paying yourself more in your own salary, and if anything, need to raise your prices to recover the increase in overhead that will occur when you do so.

You have a lot more ground to cover before a idea like this should takes place.

I'll repeat......A LOT more ground. Rome was not built in day, but it burned in one.

[Inspired]

Originally posted by mrusk
I been thinking alot about dale charging 2k for a plan for his 50k job. At first, i thought he was charging to much. Now i think maybe everyone else is charging to little.

I was reading a article in a remodeling magazine last night. Each month that profile a different design/build project done by a remodeling company. Almost every remodeling company says they charge design fees of 5-7% of total job.

If they can do it, why can't we??? Seriously, building a great landscape in no different then doing an addition to a home.

I think it could fly. Charge the people for the plan. Once the people give you the okay you start to pick materials and work out the final details. Then when you do the contract, you just do your last item as a '5% design fee'.


What do you guys think?

I think Dale is right too, but not because some remodeling contractor gets 5 -7% for design work. Thats apples to oranges again. That's a guide line anyway. Like materials coming in at 25% of job costs. Tell that to a lighting contractor. Dale is right because he knows what it will cost him to provide that service to his customer. He knows his numbers so when it sounds like he's just shooting from the hip, he really isn't guessing.

As PSU alluded, the remodeling industry is quite a bit more regulated. There are a ton of codes that must be not only adhered to but detailed on separate sheets right down to the size of nails, specific manufacturer part numbers, etc. Many designs require engineers to work with the designer to structure the framing and foundations. 5 - 7% is probably cheap in some situations.

Apples and oranges.

I know a landscape designer here in the Phoenix area that won't touch a design job personally for less then 5K. He's a gifted artist, few people are as talented as he is. So is he sawing a fat log, as Dale says? Or am I charging to little?

I think he's an apple and I'm an orange.

[PSUscaper]

On another quick note,

the point I just brought up is part of the reason I get frustrated with dales high design fees.

I don't think he's truly charging a design fee. He's recovering his own time, and what he thinks that time is worth. If he were to hire a person to do the same job, would he pay them the same as he does himself.......lol....

I don't like small companies that take BIG company ideas and twist and turn them to work for themselves, because they don't.

I understand what dale is doing. He's recovering his time, and he should, and in no way do I think his fees are outrageous. He does it by coming up with a 'design fee', but the truth is, its not a 'design fee', its a owner salary paycheck.

If you need more money, put it in your salary. I think the reason for dale's high design fee is that he's not recovering the money in his own salary. Raise your prices on the job, and cut yourself a bigger paycheck. In essence, that is what he's doing, but the problem is it confuses others with the way he does it and sends a distorted message on what people should be charging.

If we all started charging design fees based on what we as owners make, then what happens when we go to hire a designer??? What do they think they should be making then? The same???? They will if they read some of the posts here.

Finally, if there ever were a argument against itemized line pricing, here it is.

If you really, really insist on having 'design fee' on your estimate, make it a lump sum proposal. That way the customer can't balk at a 5% fee, but understands it is part of the price and can compare apples to...well, oranges if they so need to.

[Inspired]

PSU, I don't see how you can say that Dale has high design fees. Do you have first hand knowledge of his market, his company, the product and the service he is providing? I have no clue and I'm at least 1500 miles closer then you.


Also, maybe I read this wrong. As an owner if you hired a designer, I would hope you would charge your customers more then you are paying him/her.

It's late.

[agla]

When did Dale ever say he gets $5K on every $50k job. He essentially said that he had someone who needed his expertise to plan out a job that happened to be a $50k job.

Later in the thread he went on to make the same point that I was making. You can get only get paid what it is worth to the person doing the paying. The more other people there are out there that can do what seems to be the same service to the client, the less value YOU have.

AHyundai dealer can look at an ad for a Mercedes and think that his car has the same options and a bettter warranty, therefore it should have at least the same price. The difference is that the consumer makes that decision for him. It does not matter what the dealer thinks. All he can do is try to build value into his product to change perception and to control costs so that he can make money out of the price tha consumers are willing to pay for their car. ... by the way, they have raised consumer confidence and prices quite a bit in the last 15 years.

Your not going to get $2k on design jobs because you want to or because someone else can. Your only going to get it when you have a client that is confident in the value that they will get for that $2k. A lot of that is going to depend on the client, a lot depends on your ability, and a lot is going to depend on their alternatives. You only have control of one of those three things.

If I was looking for work last April, I would not want to tie an anchor around my neck by charging large amounts for design. You do that after your work schedule is consistantly loaded and you no longer need to absorb some of the design as a marketing expense.

Design is often of greater value to the design/build than it is to the client, particularly as thatcompany is trying to get established higher up in the market.

I'm guessing that at 22 and with no crew, you will be shooting yourself in the foot by trying to get $2k for dsign work on $50k jobs in a shrinking market.

[mrusk]

In regards to PSU post: The salary that i pay myself, is worked into the hourly rate that i bill my workers out at. I base everything off of how long it will take my 3 workers to do the job. I no longer figure myself in on the labor, since i do not do the labor anymore.

If it takes me 50 hours to get a job from first meeting to permits pulled and we start digging, shouldn't i be able to charge for my time? Yes i am still going to get my same paycheck at the end of the week since while i am doing all this stuff my guys are out working making $. Wheather i call it a design fee, a Matt fee, or just work it into the job, shouldn't i make sure i charge the customer for this?

[LandArts]

Hmmm, I say let the remodeling people get their puny design fee and I'll keep my materials markup.

[Dale Wiley]

Originally posted by PSUscaper
On another quick note,

the point I just brought up is part of the reason I get frustrated with dales high design fees.

I don't think he's truly charging a design fee. He's recovering his own time, and what he thinks that time is worth. If he were to hire a person to do the same job, would he pay them the same as he does himself.......lol....


He does it by coming up with a 'design fee', but the truth is, its not a 'design fee', its a owner salary paycheck.

If you need more money, put it in your salary. I think the reason for dale's high design fee is that he's not recovering the money in his own salary. Raise your prices on the job, and cut yourself a bigger paycheck. In essence, that is what he's doing, but the problem is it confuses others with the way he does it and sends a distorted message on what people should be charging.

I pay myself more than adequate for what I do. A design is additional work for me, and I bill for that time. It is paid to the company and goes toward normal costs. I carve that time out in 1.5 hour blocks over a week or two.

If I work on the job, I fill out a time sheet and I get paid additional for that time. Direct Labor item.

I also get rent payments from the company for shop, office and yard space at our personal residence. Overhead item.

Raise your prices on the job and cut yourself a bigger paycheck ?? Ok...what not just raise the salary, and continue to spread it out over the production hours.... ??

Quite frankly you don't know what l I am doing, or how I am doing it, your just throwing out troll bait basically...I have one of the tightest direct cost and overhead budget's you could ever see. Distortion?? I don't think so.

And you hit it right on the head in your post that most people in this business have no idea about "basic accounting". They don't... I have proved it time and time again and once you get a grip on your costs and how to recover those costs and profit.

Forget the landscape technology school... hire people for that... get your ass to night school or community college and get a 2 year AA degree in Business Administration and your business will start improving exponentially as you learn.

My daughter has a BS in Business Administration and can work in any industry and make a good living.

[PSUscaper]

"I base everything off of how long it will take my 3 workers to do the job. I no longer figure myself in on the labor, since i do not do the labor anymore"

Rusk, if you've figured out how not to do any physical work at this stage and run a profitable company, I have to ask how you haven't figured out how to charge for design fees. I believe I speak for probably about 95% of the guys here when I say you've done something no one else has at that age.

And if you have figured out how to do this AND be profitable, what on earth are you asking questions like this for. Surely you have the answer already, and really, do you want to listen to a bunch of old farts who dig holes for a living?

I get the feeling that if you were driving down the road with a flat tire and someone were to stop and tell you, you would respond with, "I know the tires flat, but why does this thing drive so bumpy"

And I why do I get the feeling your response is going to be, "why would I be driving down the road with a flat tire"

Ok, I'm done and will say no more. I wish the best of luck to you, and hey, maybe you do have the right plan and things will work. Only time will tell.

[bcx400]

High design fees can only be good for the industry. In a business where our time is undervalued, we need those designers who can charge higher than average rates. If enough people do this, it will raise the perceived value of professionally created designs.

In my opinion, we should all be charging the maximum amount possible for our labor- and I mean all forms of labor (installation labor as well as design labor). The more we charge, the better. We are in business to maximize profit- and hopefully enjoy the work we perform.