Should You Be Charging a "Discovery Retainer"?

Nowadays it seems like there are building projects popping up everywhere. The economy is booming in most parts of the country and it’s a good time for many builders.

Which leads me to the age-old question that all designers are asked:

How much is my project going to cost to build?

I was having a conversation with a client the other day. He's been doing residential design for almost 40 years. We were discussing the fact that there seem to be more and more people with unrealistic price expectations for their projects.

You know, the client that wants a $200k project but has a $100k budget.

Our conversation was mainly about determining how much a building project will cost and what are the different ways to establish a budget.

As design professionals, we NEED to know what the client's budget is before we can design a project. But, unfortunately, it is rare that you'll be given an open-ended checkbook.

Experience does matter in this situation. If you've been remodeling and building for a while, you'll have a better sense of what to do.

My client was telling me that he is starting to charge a "Discovery Retainer" that he uses to figure out the scope of a project. He gets paid to interview the clients and create a very rough, preliminary layout of what the customer wants.

He then goes to his estimating system and starts pulling the numbers together. He mostly uses unit costing at this point and will often consult with trade professionals to get their take on the project. He takes the numbers and submits his findings with a high-low number.

Armed with this information his customers can either opt-out of doing the project, adjust the scope of the project or adjust their budget. This process allows his customers to make educated and rational decisions about their project. They get answers without committing to a large cash outlay. Everyone wins!

There is another tool that you can use to help establish the budget for some residential building projects. Just head over to our free Facebook group! I know many of you don't like social media like Facebook. But you can still sign up and join our group. Just keep your profile private. It's easy! In just two weeks we now have 500+ Chief Architect Pros in our group sharing some great project samples, tips and ideas.

It would be great if you would share how you determine your initial project budgets!

To your success,

Dan Baumann

ChiefExpertsAcademy.com

P.S. - I keep adding more to the member area and get more functionality added to my new website. You can learn a bit more here.