Building Business

Charging for Design Advice: Bill Up-Front or Forget About it

comments (4) September 22nd, 2010 in Blogs

Scott Gibson, contributing writer

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Russellbriss has never had to bid or negotiate a contract. Word of mouth and a handshake have been enough to keep his business prospering. Until now.

After five months of providing advice that "greatly impacted the final design," he asked the customer for payment. It added up to several thousand dollars in unbillable time.

The response? It's all part of the contractor's job.

"I would rather not 'roll' this into the project, padding some phase, as I don't work that way," he writes. "It seems disrespectful of my time and contribution that no compensation is justified in their view."

To make matters worse, Russellbriss' doesn't yet have a contract for the job, which could come in at about $1 million. And the customer says he wants to start in two weeks.

Any suggestions? he asks in his post to the Fine Homebuilding Breaktiime business forum.

So where's the contract?

It's a plus when the builder is part of the design process, says studio513, and there's no question russellbriss should be compensated for his time.

But he probably dropped the ball on this one.

"Presenting a bill for work that has already been done, but without any agreement on what is billable and at what rate doesn't sound good to me," studio says. "If you have been doing business on a handshake basis and it's been working out for you, OK, that's fine. But doesn't the handshake usually involve a discussion of your rates, when bills will be presented, etc, etc?"

When you work without asking for money, why should the client expect anything different?

"As a small bit of 'been there, done that' sort of advice," adds Handydan, "you were asking all the right questions about two months too late. It seemed to me that they were just getting what you were giving them."

Davidmeiland agrees: "A contract is absolutely normal, and in my opinion should have been in place once it became clear that you were going to spend time on design development. Two separate contracts would be OK, one for the design work, probably just an hourly rate, and a separate later contract to cover construction.

"If they are hesitant to start flowing money your way this is a bad sign," he adds. "The money has to start happening."

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Comments (4)

garymac writes: I find it amazing how thankless people can be in regards to design input. Some of my experiences include a local builder winning a building award for my alteration to the original design. The local awards are called the Georgies and he recieved a silver for the best feature. A gold isn't possible untill you enter the provincials.
Then there was a two page colour article in a local newspaper featuring a passive solar house I designed and built with a friend. We did everything from the foundation to the finishing work including the cabinets, stone and wood floring, tile work and solid wood stairs. Not a mention of the builders name in the article.
I also build and designed a Thai Restaurant in the small city I live in. My mother went in for lunch one day and the waitress told her the person runnung the restaurant did all the work.
Now lets include my alteration to a designers stairs that he could not get to code. It was his desire to have these as his signature design feature. It was just a matter of changing the geometry and coming up with a unique set of stairs that I have never seen anywhere else.
For all of the above not only did I not recieve financial compensation but there was never even a thank you.
I find I get a certain amount of entertainment from people being so useless that they have to claim responsability for other peoples work.

Posted: 11:23 am on September 27th

modelt writes: Twenty five years ago, a handshake was great. Not anymore. there is a new world out there and you have to communicate and charge for every phase. Spend 1 hour and determine the needs. Your reputation will carry the project. there is not much loyalty anymore and there are alot of shoppers and people that would just like to know how much there dreams would cost. Too bad a few make the whole batch tainted. There is alot of time spent in design and planning. one should be compensated for their experience and knowledge.
Posted: 6:48 am on September 27th

cabsbydesign writes: Things this side of the pond are just the same. Having been caught out a couple of times, my design aspect of the job has changed. The real motivator was following the presentation of the third set of drawings, when the client then announced the entire project was moving to an alternative wing of the house. The blessing was, although I tried to pull out (envisaging lots of grief), the client was insistant in using my services. In the end everything worked out just fine, however, I never recouped the 40hrs of R&D.!!
In conclusion, all jobs get one free consultation and a rough draft, thereafter, they get a 'design' fee. This tends to establish respect and adds to ones professionalism.
Frank.
Posted: 6:44 am on September 27th

Dreamcatcher writes: "Bill Up-Front or Forget About it" is exactly right. I recently learned that the hard way. I sure wish there were an easier way to learn this stuff.

I lost an $11K stair job because of the $385 design fee I included in the [already tight] itemized quote to cover just a small portion of the five 2hr design meetings and approximately 12hrs of CAD time I put into the job trying to match client wants with the spacial constraints and a [undisclosed] budget.

I even further made the mistake of allowing them to hold onto my drawings while we were still in pre-project discussion, possibly giving other bidders the advantage of just quoting my design.

Then they actually accused me of being dishonest by including the fee and of course refused to pay the fee alone when I found out they hired someone else. I left with $0.

Truly a hard lesson learned.

DC
Posted: 1:06 am on September 24th

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