ekalpakoff

I know I have brought it up before but though it would be worth bringing it up again. The design hours spent on a project differ than the other types of hours on a project. How is everyone dealing with this situation:

Client asks you to design a system with all the bells and whistles and lets say it takes you a week and D-tools accurately calculated 40 hours of design.

Two weeks later the client asks you to redesign the system with less bells and whistles.

Since there are less parts D-tools reduces the amount of design labor rather than increase the labor for the added revision.

IMO If you create a revision D-Tools should freeze the design labor and add additional labor based on the amount of changes.

OR

Maybe a project design hours area could be created like the Misc. costs tab where you can add your daily design hours on a project and they could add together for the final design amount, plus you would have better records of the time spent on the project rather than an estimation.

Any Thoughts?

David_Haddad

ekalpakoff, this is an interesting question and I hope to see some responses. I'd be curious how you even use the design number. For instance, I'd assume that if you've invested 40 hours in design that 40 hours was part of a design contract, and that you gave the pricing for the design contract before the design work? So what do you care where the design number in D-Tools goes? I'm not arguing your point, I'm just curious how you are using that number in your design and engineering process, since you can't actually get the design total D-tools generates until after you've performed the design and engineering. A catch 22!

ekalpakoff

Interesting that you brought that up David, I'm sorry to say that around here, our process is may not be the most efficient and a little... umm... bass ackwards? We have one full time and one part time designer/estimator and we found that when we were just quickly cost estimating without fully completing the design we did not have the available time to go back and finish once the project was approved so we decided to finish the design each time as a result of lack of man power.

But you're right about that catch 22 for example:

If I quickly throw together a project in a couple of hours and D-Tools tosses in a few hours for design, when the project gets approved and you clean up all your drawings and toss in the misc. parts that got missed all of your numbers have changed since the approved proposal; so how would you export a matching grand total without giving away stuff or labor for free? In actuality, it seems like doing it our way is the way D-Tools wants us to do it.

We are a commercial integrator so we are always stuck with clients generating PO's so our estimates are actually proposals and are assumed to be complete. Here's a thought, what if D-tools had an approved project feature that would lock or freeze in the parts and labor dollar amount so you could later finish your design, then export the complete parts and labor to quickbooks with the same dollar figures.

fryeguy

First off, years ago I found the Design and Management factors to not be reliable or indicative of real costs. I don't use them and removed them from my reports. Instead I created additional Phases for Engineering, Programming, and Project Management. This allows me to add in distinct line items for specific tasks with known labor amounts.

Here's some food for thought on how to capture "design" dollars and get early buy in from your prospective clients which leads to more contracts. I find there are generally two distinct paths: 1) a typical project that requires a small design wffort and 2) a larger, unique project that may use equipment and systems you don't typically provide.
With either scenario the most important thing you can do to gain trust with a client is know your products, know your systems, and have the ability to discuss this fluently. We us e design guides that start with canned budgets for different types of systems and the dollars are adjusted by changing quantities and performance levels (bronze, silver, gold). This isn't perfect but it helps define a scope and helps define a budget.
Next, this data is plugged into the complete design guide which includes equipment, labor, project management, and engineering values. This data is aggregated into a summary sheet for the client that we find is an excellent ball park value within about 5% of actual cost. If the client agrees to this value we accept a 2% design retainer for standard systems or negotiate a design fee on the larger, complex systems. In the case of the standard 2% retainer, this goes towards the cost of the system. The design fee is just that, a fee charged to present a complete design package.
If you make it this far it is very rare the a client will walk away.

I am not familiar with the market along the central coast but I have been in and around construction my entire life and I find that it is a rare case when an estimator actually gets to bill a client for his time. Those costs need to be built in. As for clients who change designs that may impact your fees, it is important to negotiate terms for changes. In my case, most up front design is put toward the cost of the project. Once a contract is executed most changes drive design fee increases.

David_Haddad

Originally Posted by fryeguy

I am not familiar with the market along the central coast but I have been in and around construction my entire life and I find that it is a rare case when an estimator actually gets to bill a client for his time. Those costs need to be built in.

I don't want to change this thread into a debate about design fees but it's my experience that it depends on the market (low/med/high), what you are delivering as "design", and most importantly is a mindset issue on the part of the person performing the design. Just as you can get free kitchen design at Home Depot, but will have to pay a high-end kitchen designer for their time, the same applies to A/V. Meaning there will always be free bids, but many people are willing to pay for design.

The funny thing is that in almost every instance I hear someone say "you can't charge for design in our market" I know of people charging for design in that market. My company routinely finds that people who have received multiple free bids from other companies then come to us and happily pay for design when they are shown the difference between meeting with someone for 2 hours and then having someone generate a sales quote in a few hours, versus a true design which is an ongoing collaborative process more akin to how an architect or designer works with a client.

Moral of the story - people are willing to pay for design. Certainly not all people, but plenty in the high end market are. Off soap box.

timw

Hmmm....I've always looked at the Design "Bucket" as a place for engineering fees (plan views, theater analysis/studies, schematics, elevations, etc) so when we use our pre-engineered packages during the 1-2 hour design phase we have allotted for documentation generation when the client signs off. Is this incorrect?

David_Haddad

Hi Tim,

I am not sure what you are asking. Top give some perspective, my firm does not give free bids. We work on a design basis, same as a design-build architecture/construction firm would. A design agreement is signed and then we work with the Client over a period of weeks or months depending on the size of the project to design their system and develop all of the project documentation and generate equipment quotes.

We may use different terminology but personally I would not call a 1-2 hour meeting a "design phase", to me that's just an introductory meeting.

I think how you are looking at the design numbers is correct in intent, but I have not found those numbers to be meaningful for the types of projects we work on. Same goes for the management number. Example. How long it will take to install a system is something that is fairly predictable. However how much project management time it will take varies greatly based on the project. As an example we may have one project where all of the speakers are selected and we lay out where they will go and it's done. We may have another project where every speaker location has to be coordinated with the architect and interior designer and even the framing is boxed out when necessary so that every speaker and light is perfectly aligned. So while the labor for the speaker is predictable, the amount of design time (or you might call it management time) is not if a project requires 4 meetings with the designer and architect and lots of back and forth drawings to finalize all of their locations.


I am curious, when you have your 1-2 hour meeting and sell one of your pre-engineered packages, does the proposal then show that engineering fee so that the Client can see it and sign off on it? And that engineering is then completed once the Client agrees to the system?

Thanks,

David

timw

David- We also do not give out free bids, the 1-2 hours design meeting typically gets us within 2-5% of our clients budget, we generate a budget projection and Letter of intent right then and receive a deposit to deliver a proposal, but the deposit amount is not extrapolated from D-Tools it's simply a percentage (typically 5-10%); however that amount is not based on time we almost always copy and paste all of our projects--really all we have to spend time doing is naming locations, etc. But the overall level of gear and what gear, has already been specified before we're done with the discovery process.

By all means David ask any questions you may have, if you'd like to get into detail, what we're doing seems to be working, we cleared $10m last year and are on track for 15 this year.

David_Haddad

Hi Tim, sounds like you've got a nice system in place.

ekalpakoff

Hey guys thanks for the input! We are examining our methodology and this has been great info!