At our recent BOA UK Live Event Simon Berry conducted a fee costing exercise. Many of you who attended have been asking for the correct way to do it so here it is.
From Fresh Projects:
When working out an hourly fee, you will probably consider factors like how much your client values your service, your competitors rates and the cost of your time.
No matter how you choose to balance these factors, and set your fees, you still need to be able to confidently establish your time costs to ensure that you are at least covering them in your fee.
So, what does an hour of your time really cost?
At the recent Business of Architecture UK Event in London Fresh Projects CEO conducted a project costing exercise. It seems this is a question that is not easily answered by many in the industry.
A talented group of 140 architects – with varying levels of experience and expertise – were all given the same case study and asked to work out 1) how much an hour of the architect’s time would cost and 2) how confident they were with the hourly rate that they had calculated.
Once the data had been collected and reviewed, three things stood out very clearly:
1.Wide range of answers
The answers to “how much does an hour of an architect’s time cost” were startling, due to the huge range of answers given.They varied from £5 to up to nearly £90 an hour with the bulk of the answers being between £15 and £35 an hour.The answer was £52 an hour.
2.Lack of confidence
There were also varying degrees of confidence the architects felt with the accuracy of their cost calculations.Even some of the UK’s leading architects and industry thought leaders at the event found this a challenge.
3.Architects undervalue their time!
However, what stood out the most from this exercise is that architects undervalue their time by almost half! The majority of the answers given were significantly less than the actual hourly rate.
If accurately and confidently working out the cost of a project is a sticking point for your practice, this is where Fresh Projects software can help.With easy to use features such as Fee Calculators, Resource Planning tools and Business Intelligence dashboards, you can track your costs in real time, quickly and effortlessly.
Fresh Projects takes the guess work out of project costing and shows you at a glance which projects are most profitable, which clients you should be working for and which of your staff are most effective.
To find out more, go to www.freshprojects.cloud or give us a call today for your no obligation demo.
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