This is every architect’s dilemma: Being asked for cheap or free architectural design. Most architects get insulted by this scenario but do not know how to respond to it.
I interviewed Principal and Managing Partner of Asian Architects and Former Chairman, Green Architecture Advocacy Philippines, FUAP, APEC Architect, Associate of AIA, Ar. Mike Guerrero and he has shared some valuable things on how to respond to clients who want a cheap design or free design.
How do you respond to clients who want cheap or free design?
“If it is a regular project, there has to be a fee – and the simplest way to reason out with the client it that architecture is the way I earn a living (hanap buhay),” Arch. Guerrero said.
However, he also noted that he does pro bono projects, especially for humanitarian reasons. According to him, “I do give pro-bono design service and consultancy when the project is for humanitarian reasons, or for projects that involve the BoP (Base of the Pyramid).”
What do you respond to when a client asks to haggle at a much lower price?
Architect Mike Guerrero answered this by using a formula. He said, “You should have an idea of your base price to deliver the project before you tackle negotiations for your fee. My formula is to calculate first your hourly rate to be able to cover all your office and living expenses. Then estimate the time it will take you to finish the project design, then double it (to allow for changes, unforeseen costs, etc). “
He then continued, “Then finally multiply the estimated time by your cost per hour, and that should give you the “direct” cost of the project. Any fee lower than that figure will mean that you are not covering your expenses. Armed with that figure, you may now negotiate for your fee. Everyone loves a discount, so give in a bit as long as you do not go lower than your “direct” cost. And if the client still wants lower than your “direct” cost, it is better to walk away from the project – unless that project will give you several other projects … then the fee becomes a marketing tool.”
What can you advise emerging architects who experience these kinds of clients?
“Focus on the value of your service first rather than the fee. Share knowledge freely in the initial discussion, as this gives your client an idea of what value you can provide”, said Ar. Mike Guerrero.
He also emphasized, “Develop a business sense. Know your costs, your time so you can readily justify your fee. Do not always lean on standard fee structures in the industry.”
I hope you learn from these suggestions and advice from the wisdom of Architect Mike Guerrero. I sure did and will put this into practice.
If you have other suggestions or comments, don’t hesitate to comment below.