Fee proposals (2)

Perth 27th October 2010

As long as we are submitting fee proposals to our clients we are in business. I don’t know about other practices, but historically we have an average scoring or success rate of over 30%. In other words, for every 10 fee proposals we submit to a client we get appointed for 3. This means that we can roughly anticipate our future income based on the fee proposals we make and hence also my statement that as long as we keep being invited to submit a fee proposal for our services we are in business. Making fee proposals is a vital and recurring part of our work, but it is a happy one. In times of economic stress we feel it immediately as the requests for fee proposals slowly decreases.

I have been preparing fee proposals for years but time and again I find it a challenge to get it “right”. Every project is different, every work condition is different, and every client is different. On top of that the economic climate and market conditions change continuously. Clients also have ever changing demands and expectations. Not to forget that with growing expertise, project experience and track record your reputation grows and you can gradually command higher fees. So in a way we are always pushing the fee boundaries. I have to say that when you have plenty of work that is of course much easier. In fact when you are at maximum capacity you don’t really need more work, but instead of saying no to a client we generally significantly push our fees up, getting them to decline :).

Time based fee proposals are generally the best as you get paid proportionate to your time spent, which means you never really can get wrong. But clients generally do not like this “blank cheque” for unlimited time and therefore understandably wish you to quote as a lump sum so they know what they are up for.

Today I proposed a combination of lump sum and time based fees. Specifically when it comes to site execution, it is not easy to log in a lump sum fee as the building progress is not under our control, contrary to the actual design process which is much easier for us to control. Will see for this project….time will tell!

27. October 2010 by Martin Klaasen
Categories: lighting and the economy, lighting design practice | Leave a comment

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