Sunday, February 15, 2015

slow learner .. the definitive design fee policy post

Back on Sunday, May 31st 2009, I wrote a post about a client I had just finished working with on the design for a custom coffee table with dragonflies and reeds inlayed in the top of it. Here is a link to that blog post. Let's just say it didn't go well for Dan.  In case you don't want to read my whining, here's a brief excerpt from what I wrote after that experience, summarizing my then and current thoughts on design fees:

"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 provide 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 design fee that seems appropriate to the project at hand. (Our current design rate on 2/14/15 is $75.00/ hour)  If that fee is used up, we probably have a problem, and we’ll have to take it from there with a new, written and accepted, 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 just 'happens' but is a sometimes complicated and time consuming process. And, time is really all we’ve REALLY got.. "

I don't think I would change much about that summary today.  And, until this past December, I have not had to request any design fees since 2009.  I will say though, that every time in the future that I do request a design fee, which is really, really only when I think it necessary, I will make sure that if someone gives me a design fee, that they understand my stated position on this. 

The prompt for this current posting was from a potential client who asked me to consider building for them a 'Greene and Greene' style kitchen with all the bells and whistles. Their budget, at first, seemed sort of reasonable, but since we had no drawings to bid from, and the drawings their kitchen designer provided were 'not what they wanted', if I wanted to consider doing the job, I would have to make drawings to bid from.  They offered a $1000. design deposit, which I thought was reasonable, and which the husband, obviously, took to mean I was totally committed to their project, would love their site and their contractor, and could do whatever design they wanted, whenever they wanted it, within their budget.  Well, after quite a bit of drawing time and back and forth by email, and a site visit to Boston to meet their contractor and actually see the space they were going to remodel, for a variety of reasons I will not go into here, (I'll invoke Will Rogers who once said "Never miss a good chance to shut up"),  I decided to withdraw.   Since I had spent quite a lot of time just understanding the space, which was very tight, and producing drawings and a quick model for the design meeting, and to estimate a total cost, I offered to settle for just the deposit, which was about 1/2 of the time I had spent on the project, not counting the overnight trip to Boston.  We had already discussed at our initial meeting that I do kitchen work only on a 'cost plus basis'.

The wife was fine with that, but the husband, not so much .. I spoke with the wife, and followed up with some post meeting suggestions to smooth the project execution, and didn't hear anything until almost a month later, last Wednesday night, when i received the email below:

Hi Dan,
     Sorry to take a couple of weeks to get back on this -- busy digging out.  We're not as good at dealing with so much snow as Vermonters!
     Let's focus on where we agree, i.e., that this won't be settled over email.  Glad for any thoughts you have on a resolution mechanism.  Is there a local trade group or business association up there that offers mediation or arbitration?  The default is filing a claim in Bennington County small claims court, which itself may be a good option all around -- inexpensive, informal, local for you.

' inexpensive, informal, local for you '  ... Love it!  So breezy and informal !! and the snow!  
After fuming for a bit and talking to 'my closest advisors', I decided to return the client's entire $1000. deposit and get on with it.  Anything else seemed like a lose/lose from a business standpoint.  Taking a design deposit in the future?  I will list all the contingencies I can think of, have a reading of my policy above, and feel better about my chances of getting paid for at least some of my efforts, regardless of whether the project proceeds or not.

What I had to bid from, plus some 'not what we want' sketch up pictures.
The cad drawings I prepared for the meeting in Boston .. The model is at the start of this post.
Before picture ....
Live and Learn ...


John C said...

I check your website almost daily to see what you have to say. I am a beginning woodworker with hopes of making a living in the future in the industry. These topics, while not glamorous, are important and a fact of business no matter the industry you work in. Design work is difficult for people to understand as most people will never design anything from their own imagination and experience. I always appreciate your careful thought out designs and experience. This blog is, to me, one of the most important resources on the internet for an amateur woodworker to read. Thanks for keeping it going.


Anonymous said...

Just wondering whether you have ever contemplated charging a design fee from the get-go, with a view to treating it as a credit towards the overall project if the customer proceeds?

The advantage in this approach is that it would act as a filter to weed out undesirable clients and would embed a suitable respect for your time from the outset for those who are prepared to pay the fee. That said, I do understand that it could serve to scare away the odd suitable client who is very reasonable, but perhaps a bit risk averse (nervous) and needs a bit of hand-holding at the start of the relationship.

Jason said...


I can't even believe.... Oh wait. I CAN believe that people like this exist in the world.

Clearly, Johnathan has made his money taking advantage of people such as you. It amazes me that people think we work for "free" or do it because we love it so much that and we don't mind taking a bit of extra time just for them.

WOW! Still. WOW!

Obviously, there are 2 sides to each coin, but after following you and your company for years and years, I've come to respect the work that you do time and time again. I just can not believe that you are doing something that warrants this kind of abuse. There is NO way you would be in business after all of these years if you treated clients unfairly.

Sadly Dan, you've made me smile. It's great to know that someone such as you, whom I look up to, got such a shitty person to make your life miserable for a few weeks. I though I was the only one that happened too. :)

You are a good man for returning all the $$. Keep up being great at what you do. Soon this person will be a wonderful thing drinking story, and that's it! Cheers!WOW!

Anonymous said...

Good post. Design work is highly valuable, but not always highly valued. I've been an engineer for over 10 years now, and I'm still learning that time spent on design up front always pays off in smoother and better projects. You and I see it because our work revolves around projects, but not everyone can relate. Keep reminding people that your time and experience are valuable!

merrilsn said...

It is easy for a person to understand your position on this if they have an appreciation for the craft and the design process. I can only imagine this client is ignorant to both.
It seems totally reasonable to me to charge a design fee ( not a deposit) for custom one time work like a kitchen where you will not be able to spread design time over multiple projects. The quality of your work is well chronicled on the blog and other places and as mentioned above the if a client has an appreciation for the work they will understand.
I don't follow many blogs but after finding it last year it has become a favorite. Carry on.

Anonymous said...

Well you did get screwed by that client. I feel your pain having been in roughly the same place before. The travel time and expense is what would get me the most annoyed as I really hate flying. Clearly there should have been some additional clarification with the client about what you were expecting for putting all that time and energy into their project design. It sounds like you were pretty clear but somehow they still found a way to misunderstand. Your pricing system looks good but in my opinion it actually gives more for free than necessary; less might be better and give less expectation for more freebies in the future from clients.

Richard said...

Hi Dan, I just stumbled on this post searching for... I can't remember what... a part for my Vega duplicator. This sounds like a miserable situation to have been in. Clearly, given how you were treated after doing all this design work, your decision to walk away from the entire project was an excellent choice.