Charging for Cabinet Design Work
Cabinetmakers discuss how they price the design phase of a job — and get paid. March 12, 2009
Question
I am looking for feedback on how best to cover off on design time. For residential projects, the design time is tacked on to the final project price. An agreement is made and accepted, the project is built and then paid for. However, there are some projects that don't get off the ground beyond the design stage (for various reasons). My problem is how to get paid for design services rendered, no matter what happens. My concern is that if I require the client to pay in advance for the design, it may come off as a cash grab - they may be insulted and balk at the whole project, etc. But the bottom line is I need to tighten up my payment policy regarding design time and still come off looking like a professional. How do you handle this?
Forum Responses
(Business and Management Forum)
From contributor M:
Charging for your design time is coming off as a professional. On the other hand, the big box stores don't charge for design in their regular stores. Choose the one you want to be judged by.
From contributor O:
It is and always will be a touchy subject. A customer often does not want to pay for your design time, because they might not like your design. What happens then? Do you tell people that they don't have to pay unless they like the design? They will always say they don't so they don't have to pay. It is not an issue if you get the job, but people do not like to pay for something they are not going to get. I am not sure what the answer is, but we never charged for design time exactly. We always saw it as a part of doing business, so you just add it to your calculations when figuring your costs of doing business. It becomes part of your hourly charges. You could lose a lot of clients over a simple thing like showing a charge for the design. If it is built in, then you have one less thing to discuss with the client.
From contributor A:
As with pricing, it is mostly what the market will bear. If you can still be reasonably profitable at that point, you've got a business. A well-appointed showroom would go a long way in setting up the stage. I have been doing this for over ten years and in that time, try as I could, I've collected a total of $50. I do not have a showroom - I am not sure it would be the difference for me, but it may be. I try to qualify the prospect as best I can and it is the best I can do. Around here people simply are not used to paying for estimates, which usually include design time. In large measure, I take that as an opportunity to sell myself and my company.
How much I invest in each prospect depends on how I feel about my chances of landing a project. I am talking residential work. To me it ends up being one of the costs of doing business. I've heard lots of people say they would not do such work for free. How great they've managed to accomplish that one way or another. It reminds me how others talk about upcharging and marking up anything bigger than a sneeze. Wouldn't that be swell? I am within one cabinet shop at the top of the pricing chain and I lose quite a few jobs on the price issue. All that said, I am feeling no pain, thank God.
So, if you can get paid for design time, why wouldn't you? Insist on getting paid and you will soon find out if it is something the market will bear.
From contributor M:
I do know what you're saying, believe me. I have struggled with this and I am sure most have, but I have given away the last hour of my time I care to. If I am going to donate my time, it will be to my children and granddaughters. If you don't get a job you have spent 8-10 hours or more designing, then you are charging your clients that you do get a job from for the drawings that you gave away to another potential client.
Case in point... Was called for an appointment to a potential client. They laid out drawings on their existing island from at least 3 of the big box stores, told me how they weren't satisfied with any of them and had heard that I was the go-to guy to get great designs and solve problems that others seemed to be stumped on. I put their room dim on my laptop and proceeded to tell them what other jobs similar in size and detail had cost and that if they would like to proceed, I would need a $500 dollar deposit to cover at least part of my labor to do their drawings and that when I was done, the drawings were theirs to do what they wanted to with, and that if we built the job, it would be taken off the cost. Left the site without an offer of the deposit to only have them call 3 weeks later asking if I had their drawings done and that if not, they needed them within a few days because they were ready to get started. My office manager sent them an invoice for the deposit, and I have not heard from them in two months. That just reinforced my "no free drawings" policy once again.
From contributor J:
Put together a nice portfolio of your previous design work along with pictures of the finished projects. That's what will sell your design work. It will take time and you will have plenty of people balk at not getting a "free" (to them) estimate. Go in with confidence and sell the design work. We always credit the design fee back (of course this is a line item in our in-house estimate) when we are hired to build the project.
From contributor D:
Our design fee is currently $300.
From contributor A:
I use Kcdw to draw my designs. It takes 15 to 20 minutes to come up with a preliminary design to show prospective clients in my office. They first drool over the pictures of our work in my 30" hd monitor, and then I show them the very limited but educational display we have. I would most certainly not give them drawings without a deposit. Of course, most of the time I go to their house, although I try to set it up when I have to be in the area. I hate to give anything away also, especially valuable time.
From contributor X:
What to do... Years ago I had a customer who asked for help in designing their kitchen. I went to their job site, took measurements of their new house, then went back to the shop where I spent most of the day drawing up various layouts. I called the customer and stated that I had his drawings done. The customer came to the shop and looked at the drawings and asked if he could take the drawings home so he could have his wife decide also as to what was best for their house. I said sure to the request, hoping that I'd get the job. As time passed, I called and asked the customer about the job. He stated that he went with a different cabinetmaker's design and they got the job. I later found out that they had used my design and figures and that they were really pissed at me. Seems my drawings were done in metric and not imperial, which their cabinetmaker made the cabinets to. I got nothing out of the job except the satisfaction of screwing the screwer.
If you go to your attorney and request his services, he will give you a free consultation about your problem. Anything after that he will charge you. He has not wasted his money on the consultation. To hire him you must pay.
So I would explain to the customer that there was a Service Call Fee of $50 to
$100 for me to leave the shop area to look at the job site and make measurements. This was all paid up front before I went to their job site. My time is worth money. If others want to give their time away, so be it. On the service call, I would give a preliminary sales pitch, find out what they were interested in and their budget for the job. I would size up the job and customer and see if I really wanted the job or not. I'd explain what all was involved and the choices they would have to make. So, they got their money's worth in advice for the service call fee on what to look for and expect from other cabinetmakers.
I looked at it that I had another business that I could make money from.
1. Design business.
2. Cabinet mfg. business.
3. Countertop business.
4. Installation business.
5. Finishing business.
6. Finance business.
Each business has its own type of billing and contracts. You get what you pay for. There are no freebees. If they brought their design in with measurements, we could quote them a price. So when we provide the design and drawings with cut list, it's our time and expertise they must pay for.
From contributor V:
We will provide an "estimate from plans" to people free of charge. This includes an initial meeting to firm up details like wood species, door style, and finish. No further details or questions until they see the estimate and either a) give 1/2 down, or b) sign a Design Deposit contract ($ 1,000.00) refundable against the job. Then we will do drawings and proceed further. We don't measure, layout for the other trades or continue meetings otherwise.
We put this information out at the initial meeting so there is no confusion later. The first quote lets them know where they are in their budget, and their response lets us know if they are serious. When they comment "well, Lowes doesn't want a deposit," we respond, "We don't want 100% upfront."
From contributor S:
Free consult/proposals only. 10% of proposal to get drawings done. Never lost a job I wanted because of that. I have lost some, but obviously if they aren't willing to pay that, they aren't serious buyers. No showroom. Just portfolio, website and confidence.
Nothing better than having someone call with drawings done from another shop. It makes our job easier. We even offer a "design discount" when they bring them in.
Professional lawyers don't give legal advice for free (and get paid in full whether you win or lose). Professional doctors don't do physicals for free (and get paid in full whether you get better or not). Professional architects don't do drawings for free (they actually get paid more if client makes changes). Professional builders don't build for free (their subs do when they get screwed on payments). Professional plumbers don't do free work (heck, they charge more per hour than 95% of shops and have less than half the overhead and assets!). Seeing a pattern here?
Charge a percentage of proposal, charge what the estimated design time is worth, or charge a flat fee of $100 or more. Doesn't matter how you do it, you need to charge something to qualify the client. If they aren't willing to pop $100 for your time, guess what? They have no respect for you and most likely are shopping around.
If you say, "Well, no one else around here does it. I will not get any work..." Guess what? I thought the same before making the switch! I still get work and the shops who continued to do free bids are out of business or doing my drawings for free! In fact, the clients get better and better in quality. High dollar clients want this type of company, and tire kickers are repulsed by it. What a beautiful thing. If your market is not willing to pay you for your valuable professional services, it is time to take a good long look at changing your market.
You know why the big box stores do free drawings? Their clients are low ball, bottom barrel tire kickers and that is what they have to do to get the jobs, and they make 250% markup on sold jobs. Is that the type of client you want? Is that the type of margins you are making? Is that the kind of product you build and sell?
From contributor F:
During the initial meeting I explain that they will get a detailed estimate and I will show them a conceptual drawing. The estimate has a line item for design time and shop drawings. If there are numerous changes associated with the design after the second meeting (when they first see the conceptual drawing), there will be additional charges for revising the conceptual drawing. The shop drawing charge includes detailed design that I only do following a down payment. Nobody gets drawings to "look over" unless they buy them. If they buy them and I get the job, the cost of the drawings is credited to the job. If I don't get the job, the drawings are theirs and I've made some money. The drawings they buy have limited dimensions on them and the legend says not to scale. The only potential customers that complain about this approach are the tire kickers and those that have no idea what commercial work costs.
From contributor R:
Quotes are free, and designs with drawings are a grand, period, no exceptions.
From contributor B:
I don't worry about getting paid for the drawings themselves. I want cabinet jobs and everything I do works for that. I always prepare a quick drawing for an accurate bid - this way I can count drawers, roll outs, hinges, labor, etc. I will show and review with a client as part of the sales process, but I never (anymore) give the drawing unless I get a deposit on the job. Most clients understand this and there is no problem. Some people are just users and use the review process to memorize details and then shop it to death for a cheap price. Sometimes this happens to me and I try to see it coming and avoid wasting my time.
From contributor K:
I usually provide a Preliminary Proposal. Using Planit Solutions Solid Manufacturing, I do a quick layout of the project from either the measurements that the customer provides (at no charge) or the measurements that I obtain from a site visit (that is charged). The preliminary only provides the customer a written preliminary proposal of a working range of what may be expected in costs, but no drawings. Along with the written proposal, a statement is made that if they wish to proceed further with their project, a design must be created and all details presented in order to both give an accurate cost as well as a shop-ready plan for manufacturing. Its fee is based on the complexity of the project and is presented to the customer along with the preliminary proposal. This usually is all I need to qualify the customer and discover if they are serious or not.
If the customer is serious, they have no problem proceeding further and my time for design work is compensated upfront before design begins. If they are not serious, then we part ways and everyone is happy. It has worked very well for me for 20 years now.
From contributor A:
Contributor S, I think your analogy about lawyers, plumbers and such has little to do with what we do or with professionalism or lack thereof. Those people probably know that by the time they get a call, it is because the caller is in immediate need of help or in fact, in deep sh*t, literally or figuratively. Also, what works in New York City may not work in Laredo, TX or El Paso, for that matter. Perhaps the fact that the median household income in your market is twice as high as mine has a bit to do with it. Maybe you could make it work here, maybe not. Last year we had more work than we could handle, so I particularly made it a point to politely state terms similar to what you describe. I could have not cared less whether they accepted my terms or not. No one did.
One thing is sure, I would not soon be doing drawings for you, since I do not hand out drawings, so save the sandwich. In the meantime, someway, somehow, I have managed to build a very profitable, debt free business, other than my two buildings and home, and even that should be taken care of in the next five years or sooner. I foresee no career or location change for me anytime soon, though the good Lord may have other plans for me. So thanks but no thanks, I am entirely happy where I am. The market having dropped 504 points today notwithstanding, I will continue to do what works for me, while keeping my options open.
From contributor S:
I do understand that some people actually use the drawings to create their pricing for proposal. That is something I did forget to mention. You must have a way to price without actually doing drawings for my method. My post was intentionally over the top to drive a point home. Our industry deals with the current standards the way they are because we as an industry allowed it to happen. The only way to change our reality is to do it ourselves.
From contributor Y:
I'm in San Diego and I'm surrounded by big discount retailers who design for free. I couldn't care less. I don't work for free. Company and personal policy. I don't, however, ever bring up design fees. I tell the client, as part of the sales pitch, that after I receive a deposit, I will draw up plans for their approval. I've done enough estimates that I can estimate lineal footages, etc, drawers, lazy susans, etc. in a rough form, and give them a good price. I add one to two thousand for design, depending on the size of the job, and leave it there. If you're smooth with the presentation and answer all the questions, the final designs never hold up the go-ahead. I learned the hard way that once you hand the client a set of plans that they haven't paid for, they shop you all over town and find somebody cheaper, and you never get paid. Better off to go fishing than work for free.
From contributor N:
I charge for the initial design that is based on an hourly rate. The payment schedule is 50% at time of measure, 25% at the time of the second (presentation) visit and the last 25% when all items in the contract have been completed. I recently added a clause in the contract stating that all tasks may not be completed because the total amount is based upon an estimated number of hours. Other services are charged at an hourly rate to be paid every other week. It comes down to being confident of the value of your services and asking for what is required to work together with the prospective client.
