Since launching the blog back in 2007, there has been one topic that I have been asked about more than any other. Whenever I write about it, either at the blog or over at the Entrepreneur Architect Linkedin Group (which by the way is closing in on 6,000 members) the comment section lights up. It’s the one topic that, for generations, has been untouchable. We’ve been trained by our schools and required by our professional organization to avoid discussing this topic at all costs… or else.
Well today, right here on the podcast, I am talking about fees for architectural services.
Topics Referenced in This Episode
The Entrepreneur Architect Academy Pre-Launch List
Episode 14 with Emily Grandstaff-Rice
The Passion Profit Cycle of Success
Architectural Fees
Cost Per Square Foot
Hourly Fees
Stipulated Sum Fees (a.k.a. Flat or Fixed Fees)
Percentage of Construction Cost
The Hybrid Fee
The Hybrid Proposal for Architectural Services Course
Collaboration and Encouragement Among Architects
Ask a Question To Be Answered on the Podcast
Hi! I am so grateful for this episode; I’ve listened to it a few times as I’ve launched my small design/build firm. You said you charge 12% of construction costs for design services. I’m a designer- and a general contractor. I provide design, construction & management services. What’s your suggestion for a cost-plus percentage for design/build?
Local contractors have suggested a 20% cost-plus fee, but they don’t “get” the hours spent with pre-design and schematic design development. Help! Thanks.
Thanks for listening Jennifer. I appreciate the feedback.
Just to clarify, I referenced that we charge 12%. I don’t necessarily recommend a specific percentage or fixed amount that all architects should use. Working through the Profit Course available at EntreArchitect.com/freecourse would help you determine the proper fees for your firm.
We have not worked with the cost-plus fee structure, so I don’t have any specific suggestions for you. In order to show the value of the architecture separate from the construction, I might suggest that you separate the services and associated fees, but present them as one all-inclusive proposal.
Hope that helps. Keep us posted on your progress.
Hi, this is a great episode. We have also been experimenting with fee structures and I would love to give this a try! You said that the fee structure would be fixed unless the client increases the scope significantly.
What would one do if the client chooses the significantly decrease the scope after changing their mind multiple times and you have done quite a bit of work? Does the fee stay fixed? If we argue for being able to change our fee again if the scope is significantly increased, could the client argue for a fee decrease with a scope reduction?
thanks!
Judy; We have a section in our Terms and Conditions that would adjust the agreement and allow us to be compensated additionally (hourly) for the changes required. If you are considering trying this method of compensation, I highly recommend that you purchase the Hybrid Proposal Course. It walks you through the entire document package, step-by-step and explains my reasoning behind every decision. It also comes with complete templates ready for your edits. You can purchase the course until tomorrow (5/31) at EntreArchitect.com/Hyrbid for $197 or get it free with a Level 1 membership at $27/month (EntreArchitect.com). I hope that is helpful. – Mark