We Were Charging Design Fees for Detailed Project Plans, but We Were Not Getting Paid for All of the Time We Spent On-Site or In-Office with Other Trades

About six months ago, I had an epiphany. I was sitting with an architect that we work with regularly to mark up plans for a client. We started talking about our businesses and how we work with our clients. We then broached the topic of billing strategies, and she asked how much I charged per hour for consultation time, like the time we were spending together going over the plans. When I told her that we do not charge specifically for consultation, only an upfront design fee and that just we considered all of the additional time and meetings an included part of the total installation, she couldn’t believe it.

This drove me to discuss consulting and billing practices with other professionals and integrators. The bottom line was that we were leaving a lot of money on the table by giving away so much of our time for free. While we were charging design fees for detailed project plans, we were not getting paid for all of the time we spent on-site or in-office with designers, architects, contractors, clients, electricians, HVAC companies, and others. When you think about it, other than the architect and contractor, we interface with more people on the project than anyone else; we integrate with electrical, HVAC, shading, and security, in addition to our own lines of audio, video, and networking.

We have since started working with many clients on a consulting basis to get started. We provide them with an initial proposal for the design, installation, and programming of their system based on our initial discussions and site visit. We are very specific that this proposal for our labor and programming expertise. If our expertise is also necessary to work with other trades or do additional walk-throughs and meetings, we charge a consultative fee. Upon the first instance of a consultative need, we invoice for a $2,000 retainer that goes toward paying for future consultation time and, if not used by the end of the project, can be applied to either the final invoice or towards a service agreement.

I have been blown away by the benefits we have seen from this practice. Here are my four realizations:

1) Clients value our time and expertise more. As a paid consultant, we aren’t asked to attend site meetings at which our expertise isn’t required, or will only be discussed for a few minutes. More anecdotally, it feels as though clients value what I say more because they are paying for it. My opinion carries more weight and I’m no longer trying to upsell them on something, but am providing valuable advice

2) Professional partners now hire us to work directly with them on architectural and interior designs before we even engage with the client. They pay us directly, and we mark up plans and have meetings in their offices to discuss optimal wiring schemes, rack locations, TV locations, etc., so that they have a more comprehensive plan to present to their client. They then recoup our fees by adding it to their bill. This gives a significant leg up in the project-bidding phase, as we are not only recommended by the architect or designer, but we worked on the plans already and have the credibility of being the smart home consultant, not just the AV guy.

3) Even if we don’t end up landing the installation because the client decided to go in a different directly, several times we have maintained the role of consultant and have billed significant hours to the project

4) Our revenues and profits have jumped significantly. All of these hours that we used to give away for free are now billable time, and that just drops straight to the bottom line.

Stop devaluing your time and expertise. Enter into consulting arrangements on all of your projects, and you will see some amazing benefits.

Related