Worth It: Increasing the Feasibility Fee Better Covers Design Costs

As part of its design/build model, Gettum Associates, in Greenwood, Ind., used to charge $500 to do a feasibility study for large projects. But that fee, which president Phil Gettum describes as “grossly underpriced,” didn’t cover the time the design staff spent on the study. And it wasn’t significant enough for prospects to appreciate the study’s value.

So six months ago the company increased the fee. It is now $1,000 to $1,500, based on project scope. (No fee is charged for small projects such as bathrooms.) The higher fee weeds out tire-kickers and covers the time that Gettum Associates staff spend on the preliminary design and estimate.

Common Goal

The company also charges $55 per hour for any extensive design work the client requests outside the scope of the feasibility study, and the hourly charge and the credit are somewhat flexible, based on the sales situation. “Now our design division within the company is more self-sustaining than before,” Phil Gettum says.

A portion of the feasibility fee is credited to the job when the client signs the construction contract. And those clients who pay the $1,500 but don’t go forward with building, says vice president Jason Gettum, still appreciate having that information. The customers who balk at the fee — those who “will choose price over quality or customer service,” Jason says — clearly are not Gettum’s ideal clients.

The higher fee also allows the company to build a design around the client’s wants from the start. “For those who truly don’t know what a project will cost, we tell them $1,500 is what it will take to design what they want,” Jason says. The client can then decide if the project fits their budget. Phil points out that this creates a team approach, with everyone working toward a common goal.

—Nina Patel, senior editor, REMODELING. twitter.com/silvernina

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