Fees – what do you get for your money

Recently, we’ve been having some really useful discussions about fees on some of our social media platforms, mainly LinkedIn.

We ended up doing a poll about the different types of architectural fee arrangements and the clear preference was a fixed rate fee. However, it’s not as clear cut as it may seem and there are several variables and perceptions about how we work out our fees. We’ll explore those things on another post but before we do I thought it would be helpful to explain how we work out our hourly rates 

It’s not rocket science, but it’s surprising how often people don’t consider things properly when working out their rates. 

Basically, I add up the cost of operating my business [overheads] + staff costs [salary, pensions, corporation tax, employers national insurance, etc.] + profit margin. 

Once this total cost is established, I divide this number by the total number of hours I work in a year. As I’m never 100% productive this is multiplied by a productivity factor [about 60% at the moment] to arrive at a slightly higher rate so the total annual cost is the same. 

Productivity means that I’m not 100% working on project work that pays a fee. I could be out networking, creating quotes, creating website content, marketing, completing training, managing other people etc. All important business related stuff but it doesn’t pay a fee. 

This means I know what I’m worth and people also get a highly experienced and qualified professional who’s worked things out properly and how to do their work for them. 

If you haven’t done this before I urge you to do this, you might be surprised to find out you are undercharging for your services and working almost for nothing.