Question
QUESTION: I'm just starting out in Landscape & Interior Design.  I'm not sure how/what to charge for my design plans or what to consider a good/fair price for work that I will not be performing.  A personal architect acquaintance suggested I charge a flat hourly rate (while I gain experience).  Also, do my fees come out of the clients budget or is it a separate expense?  As an expert, what do you suggest?

ANSWER: What to charge for professional services匟mmm.  There are several ways to go about asking fees for design services (or commission, if you view your work as 揳rt?.

I usually quote a cost by the job, with an hourly fee for anything that goes above & beyond the basic service, as outlined in our simple letter-proposal.   Others charge a percentage of the overall budget; for architectural work its 6-10%, and YES it is considered a budget line item, as 揹esign professional? (So, not factored in as a part of the 6-10% of the construction budget).

Now, most of my RESIDENTIAL clients, who might spend $45k to $75k for a backyard remodel would drop their jaws to the floor if I suggested a fee of $3,000 to $4,500 for a design, whereas my COMMERCIAL clients understand that I get to accept lots of liability for that fee!!

It抯 O.K. to ask others in your area what they charge.  If you are timid about approaching your competition, you can have a friend, family member, or business associate do it for you.

I have found that if you are reasonable in your fees, people come back to you, or recommend you to others匢 average about 4%, but cut it frequently to get the job, if I see the sweaty palms of the homeowner start to drip too badly.

As to how much to ask for: its up to you, but you don抰 want to charge $400/hour, when your competition is charging $50/hour  (duh? You抳e got to take in what you need to survive as a business, so maybe somewhere in between the two extremes.

It抯 also market-driven.  Here, there are not a lot of professionally licensed Landscape Architects, but in a college-town that offers this as a degree/major, you抮e fighting the 搒tarving students?for the smaller work卆nd the locals have been trained to ask for the 搒tudent discount??Everybody wants a deal.

Most folks feel like they can, 揹o it myself? which is fine, or want to get a 揹eal?from the local contractor.  The contractor can 揾ide?actual costs a lot better on the construction side of the project, than we designers can.  If you do a professional job, don抰 hesitate to charge a professional fee.  

If you are competing with 搉apkin-quality?designs, I like to show a set of my plans next to my competition抯 plans卛t speaks volumes, and I have re-done may contractor抯 designs!!

Regards,  ~M


---------- FOLLOW-UP ----------

QUESTION: Thanks for your answer. Just to make sure I understand correctly, my fee(s) are a separate expense from the homeowners expected budget? IE... the homeowner's budget is $100K.  My fees are separate from that? If yes, is $10K a fair price for a design plan?  The homeowner will be taking this design plan to the HOA for approval.  After which, the homeowner expects to have contractors bid for the job.  At that point, will my job be done? Or, as the designer, do I follow-up with the contractors until the work is complete?

Answer
Specific to LANDSCAPE DESIGN, $10k is a HUGE sum for a backyard design, unless it is an exceptional design for an absolutely fabulous property, with a big, splashy photo spread in Garden Design Magazine, Or, your patron lives in the Hamptons, NY, with lots of excess cash to throw around.

Seriously,  I have never done an estate in my territory for that large an amount - although I HAVE asked for it.  Commercial work, yes, but not residential stuff, except for builder's subdivisions where I was designer of the common areas (pools, decks, trails, etc.)

COMMERICAL work or Interior Design fees are a different sort altogether - see the AIA discussion, below.

You are in foggy territory.  Basic Econ 101 says you charge "what the market will bare".  You are providing a service and as landscapes vary, there is no "fixed" fee that fits all clients or lots.  Some "patrons" will seek you out, once you are established.  Others will laugh in your face when you suggest your modest fee proposal - I've received both reactions.

For a $100k budget, it would be closer to $2,500 - $4,000.  Again, it depends on your experience level, and what services you are going to provide - Renderings?  Irrigation plan?  Representation at the HOA?, etc.  My 18+ years give me a slight (very slight) edge in asking higher fees than most.

I just did a $200k job, and all my fees ended up being about $4,800, over an 8-month period.   We started with a modest budget, and the owner's "might as well" attitude kept moving the bar upward.  That is why I would suggest a modest fee proposal WITH an hourly "above & beyond the basic service" clause of some sort.  And, do describe what you will AND will not do for your fee, or the client will do this for you!!

As a "Reality Check", see this link as an outline, and determine how long it would take you to do each task, then put a dollar figure to your hours...

http://www.lepidoptera.com/landscape/process.htm

Sound like $10k worth of work?  Maybe; maybe not.

Still with me?  As to "follow up work?I have done it both ways - handed plans to the homeowner, and said, "Have a nice life", AND I have held their hand through EVERY agonizing tile selection, patio furniture hunt, and contractor dispute!!  That抯 why the hourly kicker works for me, or I would have lost my shirt on most of the larger jobs - my clients understand my time is not free for their use & abuse.

I would expect the client's over-all budget to include your services, but I'm not their accountant, and it is their budget, not yours...

A VERY simple budget outline would be:
- Design @ $X,000 amount  (by you)
- Permits/Approvals @ $X,000 amount (by you OR others)
- Construction @ $Xxx,000 amount (by contractor)**
- Close-out @ $X,000 amount (items like outdoor furniture, pools supplies, grow-in maintenance, etc.)

** The construction budget is the item most often used as an indicator of potential fees, but NOT the total amount that the client gets to pay.  Each line item can easily expand into multiple spreadsheets of detail (like, who pays for the permits, surveys, review application fees, etc).  I'm trying to give you the big chunks, here.

It is the owner's responsibility to pay their bills, and not really yours to tell them how to carve up their finances, unless you are their CPA, too.  

Also, avoid the word "estimate" if you are not a contractor. I prefer to call it an "Opinion of Probable Cost", as opinions vary form person-to-person, right?  Anybody can have an "opinion", but the phrase "estimate" actually may have some legal weight to him or her. - Use with caution.

Architects have it a little easier, as then American Institute of Architects (AIA) have some absolutely dynamite contracts that they can fall back on. They are based on square footages & building budgets to derive their fees.  No such luck with my processional association - though they did announce a new package & annual license, based on you firm's size.

Check with your architect buddy, to see if he/she will show you the AIA forms - you still have to be licensed to use them, however.

Enough said - Sufficient information, I hope, to help you.

~M