As someone who has had to make a living from providing design services, it has always been interesting to observe the variation in attitudes towards the “value” of my chosen profession.
This can range from being hailed as the hero who created the blueprint for the amazing space where family and friends gather for good times to being stopped at the gate as the unnecessary burden that no one wants to invest any money in at all! As you can imagine, you start to recognize a bit of a pattern after a while between the different types of people you come across, the scale of the projects they intend to build and their opinion about the value of going through the design process in the first place, let alone how much they’re willing to pay for it.
In this article I’m going to share with you my observations about the market value of good design, the correlation between design value and construction value and the kinds of fees that landscape architects and landscape designers (there’s actually a difference you know!) might typically charge to different levels in the market. Lastly I’ll give you a pretty detailed look into how I calculate my own design fees. The reason I’m sharing all this with you is that I believe that aiming for the wealthiest clients with the biggest budgets may not necessarily be as profitable or fulfilling as seeking clients who value “good design”. If you’re only reading this to find out what landscape designers charge I can get that out of the way for you early in the piece:
Range of Design Fees for Residential Landscape Projects (Concept Design Only)
|Market Sector||M2 Rates#||Typical Project Value#||Concept Fee Range|
|Low End||<$300/m2||<$50k||Free – $1500|
#M2 rates and Project Values are indicative only and based on “all-in”cost averaged out over the total square meterage of a project. High end projects tend to include overhead structures, kitchenettes etc that raise the square metre costs. These figures are based on a running average that I’ve collected over 8 years.
If you’d like more detailed fee calculations or to learn how your business will benefit from sharing an appreciation for good design with your clients, please read on..
“Good design” is a pretty subjective term so I’m going to avoid a long and winding philosophical discussion by simply acknowledging that you already know what a good design is and what it represents to you and your clients. What I do want to highlight though, is that a good design is invariably the result of a longer-than-you-thought-it-was-going-to-take process of research, deliberation, problem solving and decision making. You don’t just “throw some magic at it” as a potential client I just turned down said to me. For a design to be good, all the opportunities and limitations of the project need to be taken into consideration; natural and man-made, individual and regulatory, functional and practical, aspirational and financial. For a design to have integrity, each design decision you make is informed by the decision you made before it.
I have a saying which is, “Good design takes time”(it almost rhymes). I also have another slightly longer saying, “Designs aren’t something I just pull out of my arse, yes we will need to charge them design fees because that is going to take me at least a week to put together”.
I hope this helps to clarify my position on the subject.
So what is the market value of good design?
In other words, what is the market willing to pay for a well considered design that offers value to the individuals who need it, and further, the construction value it generates for designer-contractors like you after the same individuals agree to see it implemented? In truth the answer is, “it depends”. As you’ve seen in the table above, design fees vary considerably across the board. If good design takes time, then it also follows that good design should cost more, so how do you get yourself into the upper reaches of each of those ranges?
Institutional bodies like the Australian Institute of Landscape Architects (AILA) have tried to represent their member’s interests by putting together a scale of fees based on a survey carried out in 2004 (click here if you need a good chuckle). Fees are illustrated as a percentage of the construction value of a project. Working in the residential sector, this document is basically useless to me and does not represent either the typical construction costs I see or the market value of what I do ie. what the market will actually pay for quality landscape design services.
Although construction value is important, what people will actually pay for good design is dependent on a list of horribly subjective, inconsistent factors that often have nothing to do with construction cost, or any formal training as a Landscape Architect or Designer for that matter. They have to do with the shared values around design that the client and designer themselves revealwhen they meet for the first time. These can be impacted by:
- Whether the designer is male or female, straight or gay
- Fashion sense, charisma and personal mannerism
- Desire to communicate visually through images, real or virtual
- Ability to listen and provide agreeable suggestions and advice on the spot
- Balancing playful, conceptually exciting suggestions with practical ones.
- Ability to demonstrate experience and refer to projects and examples of successful details completed in the past (by yourself or others)
- Authority on the topic of landscape and lifestyle trends
- Shared personal referrals from previous clients
I could go into each of these in detail, but will save that for future posts. For now I want to highlight that the common thread tying almost all of these together is demonstrating a shared passion for “design” itself. The designer always needs to position themselves as being at least a notch or two higher than the potential client in relation to these factors, in order to create value for them. Obviously, no one is going to invest in you if you have fewer ideas or are less aware of current trends than them right? So how do you get yourself into the upper reaches of those ranges shown in the table above? You need to position yourself as an attentive, personable and passionate designer and the market will pay higher fees to have you involved in their project. Are celebrated designers like Paul Bangay, Jamie Durie, Jack Merlo and Dean Herald who command fees as high as $20k for a concept necessarily any better at design than you or me? Perhaps not, but have another think about them in relation to the list of subjective criteria again. Clients who value good design that connect with designers who share their passion create the formula for high value projects.
The Value of Good Design to the Landscape Construction Industry
I’ve often joked that every time I click my mouse, $1 goes in to the pocket of a landscape contractor. And I click my mouse a heck of a lot! Having the privilege of working with clients that value good design also means having the opportunity to construct well considered, attractively detailed projects. Projects like these attract media attention which is perfect for marketing and more often than not, are high in construction value as well. The perceived value of good design can additionally leverage the perceived cost of construction. Is a beautifully detailed swimming pool and deck “worth” more to the market than poorly designed ones even though they use the same quantities of materials? You bet they are! Do landscape contractors who consistently construct well designed high end projects charge more per metre and apply higher margins than low end and mid level contractors? Absolutely. Even workmanship becomes a contributing factor only after the project is completed. The perceived value of their offerings to the market is higher and therefore commands a premium price.
Having said that, a homeowner with a vast reserve of money to invest in a project does not automatically qualify them as being the ideal client type to pursue. In my experience, when clients don’t value good design, when they only value the bottom line, when they’re asking for a design for free from the beginning, they tend to become a millstone around your neck and everyone else’s. I’ve had clients worth millions of dollars building properties worth multiple times more than I could possibly expect to earn in a lifetime and they’ve been nothing but a pain. Going back to the list of shared values, unfortunately it’s not uncommon for these people to be the opposite of the clients I’d rather be working with:
- Don’t trust or adjust depending if you’re male, female, straight or gay
- Meet you wearing any old clothes they had lying around, or work attire
- Is not visual and completely disinterested in “pretty pictures”
- Choose what they want to hear and are adamant they already have all the the answers, someone just needs to add some “magic”
- Are obsessed with practicality without room for fun or the unexpected
- Have no reference point for what they like or don’t like because they’ve rarely paid attention to other landscape projects (with the possible exception of what their parents have at their house)
- Are completely unaware of any current landscape and lifestyle trends
- Have not been referred to or by anyone who values design
Again I would encourage you to think about which end of the range of fees and likely project construction value you would attract if you pursued clients like these. When they don’t value what you do, when they only value what you cost, your margins will necessarily become lower, your design fees tight or non-existent and the same amount of hard work you put into the project will be all but un-noticed. This is like wasting 30 day dry aged grass fed beef on someone who lives off McDonalds, energy drinks and chocolate bars. Similarly, put yourself in the shoes of a wealthy client who does value design and your reaction to a designer or contractor who presents these characteristics. It’s unlikely you’ll win the project, and even if you do, you will certainly be at the lower end of the range on all counts.
How I calculate my own design fees
I’ve rarely been asked this question but that doesn’t mean people don’t want to know. Typically I calculate my fees as the average of i) a % nominated construction budget; and ii) the hours I estimate are required x hourly rate.
At the time of writing, my hourly rate is $120 based on my running costs and 15years experience including 10years as a practicing Landscape Architect. The percentages I use are 5.5% for concept only, 9.5% for full construction specs and 10.5% for start to finish involvement through to practical completion.
Mr Jones has an allocated project budget of $100k incl GST for his landscape and after talking with him, can see he’s after a quality outcome. I estimate that to design to the brief he has given me including a site meeting, 3D modeling and CAD drawing will take me 30 hours. Here are three hypothetical calculations that are pretty close to a typical scenario.
Fees for a Concept Only
(5.5% of $100k)+(30hrs x $120)/2 = ($5500 + $3600)/2 = $4550.00
Fees through to Tender Documentation
(9.5% of $100k)+(80hrs x $120)/2 = ($9500 + $9600)/2 = $9550.00
Fees through to Practical Completion
(10.5% of $100k)+(95hrs x $120)/2 = ($10500 + $11400)/2 = $10950.00
In my opinion, for the value that I am able to bring to the project given my experience, passion for design and the criteria discussed earlier, I think these figures are fair and reasonable. Don’t forget, these figures are gross revenue, I certainly don’t walk away with this in hand at the end of a project! For these reasons, if a Client questions my proposal because of the cost, I’m usually inclined to walk away; there’s a good chance we don’t share the same attitude toward the value of good design. Besides, I’ve got to eat too.
If I can present the qualities of a passionate designer, and share those values with my potential client I’ve found they are almost always willing to meet around 5-10% of the construction budget for design fees. Any less and I would be leaving money on the table. Any more and I’d want to be sure they thought pretty highly of my abilities after the first meeting, I’m no Jamie Durie though!
Do you charge design fees? How do you calculate them? If you don’t, but you do your own design work, why not?
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