I recently came across the above article when surfing and although it’s primarily aimed at web design, it has a lot in common with garden design fee estimating.
The article starts out by saying “How many times have you been completely confused at how that ’small’ project turned into such a big one costing double and taking three times the length you estimated?”
When students first start out in business, they find it very difficult to estimate the time it takes to complete a design project for 2 reasons,
i) their inability to estimating accurately and the fact that they are still inexperienced designers and therefore take longer to complete a project.
ii) Their own embarrassment at having to charge money and a lack of confidence and feeling of self worth.
So many college and even our professional body the Society of Garden Designers skip over fees and estimating as many members and academics are themselves unfamiliar or not confident with the process.
There are 3 ways to quote for a project, the fixed fee, an hourly rate and the contract percentage basis.
Back in 2003 I wrote and presented a fee guidance scale to our UK professional body the Society of Darden Designers which explained all three of the above fee options. Although it was adopted as the industry standard, it has sadly been poorly promoted, again I believe because of the overall lack of professionalism and business skills within the industry.
It explains clearly to both client and designer how, what and when to charge.
As a new graduate the fixed fee method although preferred by the client, is not a good choice, as there is a real danger that they will under estimate for reasons I have already explained. The hourly rate may be better for the designer, but may end up costing the client more, due the fact that the designer is newly qualified and not yet up to speed.
The third, and I believe the fairest method for both parties is the percentage fee scale. The design fee is based on a sliding fee scale based on the landscape contract cost. If a client has a budget of £10k then the design fee scale would be 18% i.e. the design fee would be £1800. At £100K the design fee would drop to 10% i.e. a design fee of £10,000 and at £500K it would drop to 8%
A great little recourse I found in the article at the top of the page is a time tracking and analysis devise called Tickspot (See below)
Tickspot encourages you to analyse the design process and steps involved in each phase and allows you to estimate the amount of time each phase takes
Another useful exercise you can do is to work out how much you need to charge per hour in order to make a living.
Required Gross Profit (salary) £30,000.00
Printing, postage, stationary £2,290.00
Motor running expenses £2,400.00
Travelling expenses £57.00
Legal fees £400.00
Accountant fees £1,200.00
Bank charges £750.00
Working 8 hours per day, 5 days a week, 45 weeks a year, there are 1800 hours a year. Chargeable % of hours is likely to be between 30 and 60%, say 40%.
£42,000 ÷ (1800 x 40%) = £58.33/hr
This assumes a constant workload. It is very difficult to achieve a constant work ethic and a chargeable % at 40%. Inevitably weekends, late nights supplement the equation. The hourly rate charged depends entirely on personal choice. It may be necessary to “buy work” initially, however when you become internationally sought after you can charge accordingly. You may find that you have to charge £60.00/hr to be profitable.
But whatever you do, Don’t undersell yourself.