I remember a particular design project that changed the way I controlled my design delivery process. I was hired by a very nice lady to design an addition to her home. She lived in a very visible and respectable neighborhood. The design went very well, almost routinely. I drew up the conceptual design which she accepted, and then finished the detailed elevations and working drawings. By the end of the process we had gotten to know each other quite well; at least I thought we had. I gave her the proposal along with the drawings and expected her to sign. But she didn’t. She said she needed to think about it some more. At that moment I had to make a decision – whether to take the drawings and the detailed proposal, or leave them with her. If I took them, she might feel insulted and chances were that I would lose the job. If I left them, the chances were good she would sign the proposal.
“At that moment I had to make a decision…” Looking back at this situation, that was my first misstep in the design process. I should not have to make a decision at this point. A good process always prepares you and your client for the next step. I should have already explained, in detail, the process she and I were undertaking, each step, and each consequence. Yet I had not, because at this point in my sales process, I was supposed to make a judgement call – hold the drawings or relinquish them.
She did not call me back. And each time I called her back, she gave some vague answer that she was still undecided. Eventually I quit calling and gave up any chance of closing the sale. That should have been enough to make me change my ways, but the final “nail in the coffin” was when I drove by her house one day and saw my beautiful addition sitting pristinely on the side of her house. I made up my mind at that moment that this would never happen again. If you’ve drawn blueprints, and written a full proposal with all the specs, you know how much effort you put into it. It really doesn’t matter how much you got paid for the design. Your intent was to build the project. And certainly not for someone else to build it, using your design and specifications.
There are many ways to control your design delivery process. There is no right or wrong way. You need to decide which way works for you in your market. As you grow more confident and experienced in design sales, you’ll naturally take your design process to the next level.
Here are five ways you could deliver your design:
1. Draw up the project for free, hoping that in the end you’ll be compensated by building the project. Meet with your client. Give them the drawings. Hope for the best.
2. Charge your client a minimal fee for the design, hoping you’ll build the project. Then refund the total amount for the design if they accept your proposal.
3. Charge your client a reasonable fee for the design, and then refund 50% if they accept your contract.
4. Charge your client a fair price for the design. If they accept the design and you build the project, there is no refund. If they do not accept the design then the price for the design would be double or triple the initial price.
5. Charge your client a fair price for the design, with the understanding that they will not be able to have or hold the design until they sign a building contract.
1. Draw up the project for free, hoping that in the end you’ll be compensated by building the project. Meet with your client. Give them the drawings. Hope for the best. Many beginners start this way. You get experience and build a reputation as a good designer. What is lacking here is the perception of your value. This kind of ‘hope marketing’ implies to the client that you don’t value your time or experience. I can’t really recommend this method, even for a beginner. If you don’t perceive yourself and your product as valuable, chances are they won’t either. And they’ll have no qualms about using your design with other remodelers.
2. Charge your client a minimal fee for the design, hoping you’ll build the project. Then refund the total amount for the design if they accept your proposal. This is a typical second stage for designers. It is a good incentive, but the client has nothing to lose by using the drawings and/or specs to get further quotes.
3. Charge your client a reasonable fee for the design, and then refund 50% if they accept your contract. This creates an incentive for the client to accept your proposal. Same as #2, with the exception that finally you are getting paid, as least a little bit, for your design work if they accept your quote.
4. Charge your client a fair price for the design. If they accept the design and you build the project, there is no refund. If they do not accept the design then the price for the design would be double or triple the initial price. I learned of this design process from a very successful remodeler who does very high volume and makes very good margins. His philosophy was, if you are designing to build, you can design at a much lower price. If you are designing for them to put the design up for bid, as would an architect or an independent residential designer, then the price should reflect that. I think this is probably the best model for an experienced designer. When you break the numbers down, there is a huge difference over #1, 2, and 3. As an example, let’s compare this method with #3: The design retainer in this example is $3,000. In method 3, if the project is accepted, they make $1,500. If it is not, then they made $3,000, but nothing from a project. In method 4, if the project is accepted, then the firm makes $3,000. If it is not, then the client may have the drawings to do with as they like for $6,000 to $9,000, depending on how you choose to price this option. Although they are originally charged only the $3,000 retainer, they don’t get the drawings until they pony up the rest of the money. The design firm has made a good profit on the design even though the project is not assured. There are several things that come into play by using this method. One is that the client is invested, and has a very good incentive to hand the project over to you. If they make the choice to get quotes, they have to double or triple their investment, even though, in the end, they may come back to the design-then-build firm to build the project. That’s a risky choice which many clients will choose not to take. Another area that needs to be considered if drawings are released to a client, is your liability. When you control the project you can make minor modifications if needed. You may not need all the working drawings that you would if you release them to the client. If someone else is building the project, according to your plans, your liability goes way up, even if you had your client sign waivers and disclaimers. Anyone can sue for almost any reason here in the U.S. I’ll talk more about lowering your liability in another part of this series. If you are looking for a good design delivery process, this is a good one.
5. Charge your client a fair price for the design, with the understanding that they will not be able to have or hold the design until they sign a building contract. This is the one that very few firms will attempt to use. It seems totally one-sided. Who is going to sign a Design Retainer Agreement when they can’t even keep the drawings unless they build the project? I can only speak for myself in this case. This is the one I have used for over 15 years, and I’ve been very successful with it. When I saw the nice lady’s addition being built by someone else, I set a hard and fast rule not to let go of my drawings unless they signed a building agreement with me. I am very frank with my clients. I tell them that I am designing this project to build. Period, If they want to bid it out, then they should talk to an independent designer. So, how did I get away with this aggressive method? By setting up-front expectations, and gaining their trust before we ever signed the design agreement. Everything is set at the initial consultation. Show them your process. Show them the documents that contain this verbiage. When people see things in print, it has a great impact on them. There is a sense that whatever is written cannot be changed, and also the understanding that it has been done before. Be consistent with your process. If every design you sign was done using this method, then you can point to all of the satisfied clients you have who went down the same road that they are about to follow. Have them call your references. If they do, which is rare, they’ll hear only glowing stories about your firm, and how trustworthy you are.
Method 5 is a method that you have to work up to. With experience you can do this too. Get a few designs under your belt before you try it. You need to be seen as a well established firm by your prospective clients. One reason I really like this model is that very little time is wasted on designs that you don’t build. Your percentage of clients that continue on with the project should be well above 90%.
If you don’t have much of a track record, I’d stick to method 3 or 4. You might start with #3 and then after a year, change to #4. Adopt a method that works for you. Don’t be afraid to try something new. I think you’ll be surprised that your prospective clients will readily accept your offer, so dare to step out of your comfort zone.
No matter what you do, please start charging for your design. If you already charge, evaluate whether you are charging enough. Your designs are reflections of your experience, and demonstrate the value that you bring to the table. If you have a superior design process, you can bank on having projects that are profitable and run smoothly.
Let us know what method works best for you. Leave a comment or send an email to firstname.lastname@example.org.
Next week I’ll delve a little further into the design process. Until then, have a great week.
Wishing you the best of fortune, Randall
Randall S. Soules
Remodeling coach, adviser, and educator
My one-on-one coaching will take your remodeling business to new heights!
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