Design Fee Question

[danmosheim]

Ok ... I'm not sure if this is the right place to post a question, but it's where I usually post stuff so I'll see what happens ... I may also put something in the 'design" section. I'd appreciate a few comments regarding design fees and how much design work a craftsmen should do for 'free', 'to get the job', and when should the customer pay up front for design work? Big jobs, kitchens, libraries, no problem. People understand complex designs take time and are usually willing to pay no question. Smaller jobs like a coffee table, dining table or chest of drawers, that's where it gets tricky for me. And, with the recent economy, it seems people are amusing themselves by asking for prices on things they might want to have if you build them for them REALLY cheaply. So, do we do a sketch and then ask for money? A sketch, a scale drawing and a firm price? What's the custom over there? I have posted more details of a recent incident I had on my blog at
http://dorsetcustomfurniture.blogspot.com/2009/05/to-deisgn-fee-or-not-to-design-fee.html
It only occasionally is a problem, but when it is one, it's pretty annoying so I'm looking for a policy to post on my website ... Any ideas? Thanks for your input .... dan

 

[BradNaylor]

I never charge a design fee; there again I never do a lot of designing until I have got a firm order from the client and and a 25% deposit safely in my bank.

At an initial meeting with a potential client I will sit with them and sketch out some ideas with pencil and paper. I will also give some approximate prices based on the amount of time I estimate a job will take to make. This meeting is my sales pitch - but I am selling my services and expertise, not a piece of furniture.

More often than not, if I want it, I will get the commission at this meeting, and drive away with a signed order form and a deposit cheque. The order form will probably read something like

' 1 TV cabinet - design details to be confirmed. Approx £1250'

At this point I will put some time and thought into the specifics of the design in the sure knowledge that I am not wasting my time. I will arrange a further meeting with the client shortly before I am ready to start work on the commission to firm up the design and price and cover all the small details such as choice of handles etc. I also pick up another 25% of the final price (or sufficient to make the total deposit up to 50% if the price has changed in the interim.)

This system works very well for me. I feel that asking for a design fee up front would risk alienating potential clients at exactly the time I am pushing my sevices. I find it easier simply to close the deal leaving the design a little vague.

Cheers
Brad

 

[Doctor]

I only charge a design fee if we have to do a complete redesign after initial drawings, otherwise without some form of commitment we could be redrawing for ever.
My normal fee for this is £250 fully refundable upon confirmation of order and a deposit.

I can't remember a single time I have taken a deposit on first meeting with just a couple of sketches drawn on site, your a lucky man Brad, although I would never estimate like that. I prefer to give it a bit more thought

 

[BradNaylor]

I can't remember a single time I have taken a deposit on first meeting with just a couple of sketches drawn on site, your a lucky man Brad, although I would never estimate like that. I prefer to give it a bit more thought

I think you develop an intuition with pricing after a while. If Phil and I go to price up a big job like a kitchen together we go for a coffee afterwards and both write down our 'guesstimate' and then compare them. There is never more than a 10% difference between them.

We then work it out properly and invariably find that we were both about right, if anything slightly on the high side.

As for getting an order on the first visit, that is purely down to good salesmanship. After developing a rapport with the client and listening carefully to what it is they are after, I come up with some suggestions. Once these get a positive response after a little tweaking I stress how busy I am, usually showing them my diary to illustrate when my earliest available production slot is.

If the meeting has gone well, they are usually chomping at the bit to get their cheque book out by this stage in order to secure that priceless production slot. THAT is what I am selling. The details of the furniture can be sorted out later.

My sales philosophy is simple. The client has gone to the trouble of finding and contacting me because they have a problem they want solving. I demonstrate that I can solve that problem with a minimum of fuss and at a price that is within (or close to) their budget. They are very happy that someone with whom they get along can solve their problem and immediately ask me to do so.

As I said, it's very simple.

Bigger jobs sometimes do take a little more work but I have taken deposits and orders which read;

1 kitchen ... budget £20,000 ... Details TBC

Cheers
Brad

 

[danmosheim]

Thank you all for your comments ... They are much appreciated. I am now in the process of writing a page for my website that will summarize my new policy on custom design charges. Since I got by for 30 years without one, I don't expect much to change, though I think if I have a written, posted policy, at about the third exchange of ideas, I can send a link to the potential customer just so I at least have some cards on the table. Will it work? Can't probably be much worse than what I have now, which is nothing. Thanks again for your participation and I look forward to more discussion on this in the future ... dan

 

[danmosheim]

Hi .. Thanks for your comments ... I have composed a 'new design fee policy' below and after a little more consideration, and perhaps more comments, will post it to my website ... for more information and other comments both from my blog and from the fine woodworking knots forum visit the entry on my blog ... here's my draft policy ...

Design Fee Policy

Over the years I have always considered the interpreting of my customers’ ideas, both potential and repeat customers, part of my job description, and, unless it was obviously going to be a major undertaking, (a library, a large entertainment center, a home office, a kitchen) a free service to them. In the past most of my customers came to me by word of mouth with some background from the person who referred them to me and this ‘free design’ policy was a fine one. With the rise of the internet as a referral tool, more and more people come to us, (thankfully), but with no introduction and no in person visit to our shop where they can plainly see the nature and scope of our business. As a result, sometimes the design process has the potential to get out of hand as it’s very easy to say, ‘I’d like an estimate on a coffee table sort of like this, but maybe like that … Nooooo.. that’s not what I had in mind …. ‘ in an email. I recently had a 34 email exchange with a potential client regarding a small project that sucked up an unbelievable amount of my time. It was a ‘rush’ job and I always thought I was just ‘one more email’ away from the resolution of it. I was so sure I even made sample inlays in abalone and mother-of-pearl before receiving a nickel from them. (WHAT WAS I THINKING?) Anyway, the process came to an ugly end and left me pondering how best to avoid this in the future. After a little more consideration, I will be probably be posting this policy to my website and will refer potential new clients to it if it seems appropriate.

Here’s what I’ll do for free :

Have a meeting or two of reasonable length, say an hour or so, at my shop or at their house close by …. No Charge …. More than ½ hour travel time from my shop, meetings MAY involve travel time reimbursement. The client will be informed in advance and the charge will be assessed at my discretion, probably depending on how the meeting seems to go.

Provide concept sketches and one CAD scale drawing … No Charge

If design is ‘close’ but not finalized, I’ll provided a non binding ESTIMATE of the project’s cost including shipping and installation. No Charge

If we move on from there without at that time, a formal agreement, I will request a non-refundable, but applied to the total cost, design fee that seems appropriate to the project at hand, most likely a two to four hour fee amount. If that is used up, we probably have a problem and we’ll have to take it from there with a new design fee agreement ….

I hope this is clear and that it will help both me and my customers to understand that design is not something that happens but is a sometimes complicated and time consuming process. And, time is really all we’ve REALLY got..