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Charging Flat Fees?
It seems more and more designers are charging flat fees these days. Is this a good idea?
flat fees
I've used flat fees that include the furniture budget. If I went over budget, it came out of my fee. It was what I needed to do to secure the job with a particular kind of client.
Other models for flat fees
Thanks, Karin, that's interesting. We have also heard of designers charging flat fees for their design work and then carrying a separate budget for the furniture. There are so many options. Any other ideas out there? It would be good to know what works best, although perhaps that always depends on the client and job.
fees
may i ask you - who really wants to work with that "particular kind of client" to begin with - ?
Re: flat fees
How do you calculate fees? Do you do a rough estimate of your time (xhourly rate) + furniture budget? I can't make a decision about what billing practice is the easiest for clients to understand and for me to be profitable. Did the flat fee end up working for you???
Fee Options
I actually have several different options I offer my clients depending on the project size, services requested and budget. Here is what I make available to clients:
-Design fees: flat or hourly
-Project management fee: flat or hourly
-Other services: hourly
-Furniture/materials: zero mark-up or percentage
I only offer zero mark-ups on product if we are contracted for whole residential or commercial projects from design concept to final move-in.
How do you choose?
How do you choose which option to present? It can take time to understand the scope of a project, and often by that time the prospective client has already brought up fees. Or do you present all options? Thanks!
Re: How do you choose?
HiShane,
I work just the same way as carol laventhal works, have for years. If that doesn't work for the client, then I don't work for the client!
Kitty,
Kitty Curcio Designs
Tarzana, ca.
Charging fees
I have kept the same system of charging for many years, with my high end residential clients. It seems to work well.
I charge an hourly fee for any time I spend working for the clients, whether it is designing, or going to the site to let in a workman. Assistants are billed out at 50% of the designer's time.
Any products, furniture, lighting, etc. are billed to the client at retail, minus a 20% courtesy discount. This is shown on the invoices that go out, and each client gets a statement at the end of every month. They like seeing the 20% discount, and I have never had a complaint about our hourly design consultation fees.
It's a good thing!
Carole Laventhol
Carole Laventhol Fine Art+Interior Design
La Jolla, California
Susannah West, ASID
I have found this same method to be quite acceptable with clients. They love seeing a discount, and I think they understand retail better than they do cost plus.
Re: Susannah West, ASID
I agree. It feels so much better to be saving them money, instead of marking up product.
Design Fees
I like the idea of a discount. I always worked with a flat fees. I can definately see this as a good closing feature.
WIndow Treatment
Hi I have a local window treatment shop at home service I am doing it already for over five years i am looking to expand what do you think would work best for me in which way should I grow my business.
Re: Charging fees
how do you handle selling a piece that comes from a supplier that doesn't give discounts to designers? how do you offer a 20% discount for that? Just curious as I run into that problem from time to time.
Re: Re: Charging fees
Many of the lighting companies are doing this (last week I ran into this with a Circa lamp). I'm thinking that there might just be other lamps out there.
Re: Charging Flat Fees?
I like to give a cost estimate for the scope of services that I am doing for a client. I itemize all the labor, materials, and design services and get back with the client after price checking with vendors and carefully estimating the job. Also, it's very important to get signatures and price fees on change-orders as the project moves along. Most clients do have a budget and really appreciate a designer who can stay on budget.
I rarely use flat fees anymore.
Nancy Reznicek, Apogee Design + Build
Re: Flat Fees For Hopitality/ Hourly For Residential
With the economy so uncertain, I moved back to working w/ 50% of my business in hospitality last year where I charge a flat fee for a defined scope of services and specifiying product. For procurement, I charge hourly unless it is a hotel project. In residential I still charge by the hour, with an estimate of what the charges will be and using three levels of hourly rates for the client, which they seem to appreciate. Charges for a principal designer are $150, a senior level designer is $100 and an assistant is bill out for $ 50-60 per hour. Theses charges are pretty standard for our metropolitan area. For purchasing product I use a 30% profit margin on products sold through trade sources unless the products are plumbing or hardware, tile, lighting,etc, which have a lower discount to the trade. I have been passing the discounts on the client for these products as part of our services and only keep the profit for the decorative items and furnishings. When it comes to products purchased from Baker, it is difficult to have more than a 10 to 20 percent mark-up as they sell direct with only a small discount to the designer.
Re: Charging Flat Fees?
Hi Shane,
This is a big issue these days and about 70% of all clients surveyed by ASID prefer flat fees for obvious reasons. Clients want to know how much to expect on their bills, and they don't like surprises.
I've been working on developing classes on Value Based Fees and I'd love to know everyone's questions about this. I'm interviewing one designer who has been doing this for years, and if there are more designers that would like to participate on the panel, I'd love to hear from you.
Thanks for bringing up a very big topic that deserves more understanding by our industry.
Warm regards,
Gail Doby, ASID
www.DesignSuccessU.com
