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Charging for designs
Charging for designs
Start with the end in mind
BY GEORGE URVARI
Growing Your Business is a new Landscape Trades column featuring business management experts writing on the topics that matter to landscape and horticulture professionals.
The goal for all design/ build companies is to acquire the best customers and capture revenue for all the work they do — including the project design. The design is the most important part of building a brand people are willing to pay for.
Art is priceless
A landscape is concrete, yet at the same time it is a living organism that either appreciates or depreciates over time. Design is the foundation upon which true long-lasting value is built. It’s not an expense, but rather an investment. The benefits are financial, environmental, social and emotional.
Charging for design permits:
1. A revenue source to pay for talent and keep it.
2. The ability to generate revenue and profit for your company.
3. A differentiator that validates we are good enough to charge you.
4. A screening tool to separate customer wheat from chaff.
5. The plan to execute the vision perfectly.
Leverage envy
Charlie Munger, Warren Buffet’s billionaire business partner, stated it best: Most people are driven by envy! A simple test of this assumption is the concept of buying a car. Ninety-nine per cent of cars today are reliable and safe with similar features, such as: fuel economy, automatic transmission, air conditioning, and seating for five people. The speed limits are the same for a Honda Accord or a BMW M3. One costs $30,000, the other $70,000, yet they essentially do the same thing. The perception in the marketplace of the value of the vehicles and the status they bring account for a giant delta in price. The same concept holds true for design: Frugal or wow!
Transition from free to fee
The biggest obstacle to charging for design is the fear of having no work. It is a rational emotion based on a perceived existential threat. The risk assessment, however, is not logical if emotion and not statistics governs the decision to charge or not to charge for design.
The strategic plan
Step 1: Charge for the design and credit the client if they hire you, but build it into your cost.
Step 2: Charge for the design for a fraction of your clients, with no offer of a credit but at a lower price.
Step 3: Charge all of your customers for the design with no credit at a lower price.
Step 4: Start raising your price incrementally over time to all your future customers.
Anecdotal evidence
My own company Oriole Landscaping did this, but we skipped step two. All the companies I have consulted have started charging for design with zero regrets. Boutique landscape designers and architects make their living purely off design.
Make a choice
Planning is never free. They say the Japanese take two years to plan and one year to build, while North Americans take one year to plan and two years to build. Perception is reality, and the reality is often undervalued. Sell your process — you have to show your clients you are the right choice. More people are willing to pay for the design than you think.
George Urvari is the co-founder and president of Oriole Landscaping in Toronto, Ont. He is now on the second phase of his career acting as a business consultant for Knowledge Tree Consulting, a company co-founded with Peter Guinane.