How to Set Your Hourly Rate (Architects + Interior Designers)



Calculating your hourly rate isn’t difficult, but it’s not something they teach you how to do in design school. I’ll walk you through two methods you can use to …


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  • Hey all, if you don't want to create your own, the spreadsheet is bundled along with tons of other resources in the toolkit here: http://thirtybyforty.com/spl

  • Great video and super helpful, something I wish they would teach in school. I'm probably going to watch this like 10 more times. You may have mentioned this in other videos and I may not have seen it yet, but if this is your billable rate and hours and the architecture fees are about 10% of a project budget do you estimate hours/cost for a proposal through some extrapolation of this?

  • Hi I'm 11 years old but I want to start working up to being an architect, I'm trying to find out as much as I can and these videos are helping a lot thank you

  • I’m a youtube youngster here but since I also do Photography and Videography for weddings for my cousins privately. and that I am needed to getting ready on what carreer is the best I am trying to focus 2 things at once but great work for fitting the 2 or 3 things that I may do or like in a video.

  • This is a great introduction to a critical skill. Not only is it not taught in school, but the things you learn in the design studio- exploring lots of options, working endless crazy hours, getting halfway into something then changing course- are exactly the things which will sink a real business. Overtime is not free, even if it is your own.
    While hourly billing is a basic thing to know for planning, most clients will want a cap on fees, either a lump sum or hourly billing to a max, few will pay open ended hourly fees or % of construction. You need to track the hours that go into your work so you can estimate fees. That’s why tracking overtime is important. Even if you find a rare client who will pay a 20% fee on a $1 million home, you need to use this spreadsheet info to budget how many hours you have to do the work. As Eric notes in another video, schematic design- cresting the idea you will document and build- is only about 30% of the total time, so if you have the $200,000 fee on this home, you have about $60,000 for design, less engineering and consulting costs, so maybe $40,000 for architecture / $150 per hour thus say 266 hours for all those site visits, client meetings, building and zoning meetings, model making, thinking, sketching, presentations and all the emails. You will need to work quickly and efficiently and not reinvent everything each time. Your mileage will vary, but planning and managing budgets is a critical skill if you are selling consulting and design services.
    And by the way, real world fees for projects other than custom homes are often 3%-8% of construction cost.

  • I just wanted to pop in and say that although I'm not an architect, I'm a licensed contractor… I have been wanting to raise my standards to provide services and close more bids FAST, efficient thus professional and a step above the rest. I've been self-learning how to sketch drawings from another video and I come here for the majority of the planning and other aspects. This man helped me go from $8,000 bids to $14,000 bids literally in 20 videos. I'm on amazon about to order some pencils, trace paper, sketch book and some other essential tools. God brings you to people in many ways, I clicked on your video by accident with no intention of drawing or anything, but now if I'm not waking up in the morning to pick through your videos, I'm not raising my standards so now it's business policy to watch all these training videos. Thank you so much for taking all the time you do to make these documentaries and share steps aimed for archs in training and pros. My clients have believe I an arch and contractor but I tell them I'm not but they are amazed at the results i bring because of you! THANK YOU. I'm off to amazon to place my orders now.

  • It’s really interesting the similarities and differences between pricing design work and what I do in custom cabinets. Calculating the hourly rate is more or less the same, but coming up with proposals and such is very different. I’m actually looking into charging for my design work and am curious your thoughts on that. Architects get paid for designing stuff, why shouldn’t the cabinetmaker. How would you suggest I go about charging for my design work?

  • Okay i know this is really a stupid stupid question but is it really matters when you're going to get architect you know how to draw cuz i want to be an architect but im afraid cuz im not good at drawing

    Sorry for my bad english and please dont hatE me HAHAHA

  • hey eric, I was wondering what constitutes 'indirect labour costs'. would you be able to give me an idea of what this includes?

  • Thanks for the informative video. I sometimes wonder just how much lower the hourly rate for anything and everything would be if it weren't for excessive regulatory overhead versus sane regulatory overhead.

  • Not an architect – but actually found this really useful (would have been even more useful when I used to be freelance!)

  • Thank you for being so open and honest about this topic!! I've been looking for an example like this for ages….

  • I have been looking for clear visibility about how to allocate hourly costs for a long time….thank you thank you, Eric, for such a helpful view of the various way to approach the visibility of doing this ….. you are so helpful and this is GOLD.

  • Very good and I like that you put it in a workable format. I may have to pick this up.

  • Excuse me sir, I'm a newbie and I have some ploblems about Tool and Method in design process.I hope that you can help me,Thx.

  • Thanks Erick! … This video has invaluable and enriching information for our small firm of architects, in the Dominican Republic. After seeing how convenient it is to adjust everything to a rate per hour, we have a question: How do you calculate the time it takes you to design a particular architectural typology, say for example one of your houses? Regards.

  • Thank you…it is very Insightful…

  • Great videos! How many projects do you take on at a time, and what's the project cycle like? I work for a structural engineer, and it's chaos with like 40 projects going all over the place. I'd love to see how you manage your clients and projects.

  • I would appreciate it if you could add Japanese translation function.

  • Bought this tool kit last year and just got the email update a few days ago. I’m excited to get into this and see where it can go. Thanks again for producing all these products and videos, you’ve been a huge help for young architects and entrepreneurs.

  • Hi, really like your videos, and wish if you could make a video about architectural draughtsman job and your experience with their role in architecture. I'm really interested by this job and would like to start college next year.
    Thanks.

  • Interesting that the same issues affect architects on either side of the Atlantic. I had almost the same conversations with myself before setting up my business. When it came to hourly rate I discovered that the more ‘realistic’ (I.e. higher) the rate was, the more clients were willing to accept it. Clients (IMHO) feel reassured by a professional level hourly rate. They expect hourly rates from other professionals (lawyers, consultants etc) and architects are no different.

  • Hey Eric, are you using the numbers including TAX or should we always put TAX on top of the final numbers (hourly rate). If TAX is on top, are you counting software, utilities and other without the TAX as well?

  • Where is part 3 to model making? Where is it?

  • Great video Eric! I have a question regarding passive income. What is your suggestion if I, a young architect, wanted to dive into developing a product. Thanks for all your effort into these videos they are an immense help!

  • Love it! I wish it was around when I started out 10 years ago.

  • Thanks Eric ! Thanks for sharing wonderful knowledge.

  • One of the most helpful videos on youtube, hands down! Thank you so much for this information Eric. As an emerging professional who does a lot of freelance work to gain experience this is invaluable information.

  • Hello! I write you from Spain, first of all congratulate For your YouTube channel I think it is very inspiring and has helped me with my own studio. I was wondering if you could give us some tips to organize projects. Thank you very much!

  • Eric, I am curious what your thoughts are on the line of thinking about charging based on the value you bring/add rather than based on time? It seems our industry is very resistant to this and very much married to billing per hour, a % of construction, or some combo of the two… Since starting my own studio I have billed every project at a fixed rate. Granted it is based on how much time I expect to spend multiplied by my desired hourly rate, but I have found my clients prefer this because they know exactly how much they will pay for my design services. The only time I didn't do this was on the second round of design changes to a "completed" design I charged an hourly rate. (That put an end to the change requests!)

  • Hello Eric, thank you for sharing as usual very informative. About 20 years ago, I did a simpler and similar spreadsheet. I run the numbers for a sole-practitioner, 1 principal and two employees, 2 principals and 4 employees and so on, I was overwhelmed at the amounts of billables that it would require to sustain the different scenarios. It helped me to better appreciate my employer at that time, as well as to decide how I wanted the rest of my career to continue.

    Again, thank you for your sharing.

  • is it possible to find the excel that you are using? i coudn't find it.

  • J’adore son voix mais je comprends rien dommage, dommage aussi qu’il y a pas de sous titres

  • sir you are great. You're fan and subscriber from India who is currently in the last year of architecture.

  • Wow Eric! Where were you 20 years ago?! I could have had you tune up my accountant! Seriously, this is such great info for people starting out or those that may be struggling in their businesses. Would it be okay if I shared this with my Students? I am doing a little CAD instruction at the local college in the Interior Design program. Thanks for all you do.

  • 4 weeks of un-billable time is an amazing efficiency ratio in this industry – I usually hear that if you are hitting 70% billable that's very good. Mine is much less.

  • Hi Eric, a good tipp to layout your Excel Spreadsheet consistent with your Coporate Design and make it Printable ist to use the American Standard Format of Paper and then Hide the other columns and rows. Build the Title Block on the Bottom of the Paper because it gives all the Adminstrative Information of the Sheet like a Technical Drawing. On the head of the Paper you can make also a header. The rest of the area is for content like Diagramm or Calculation Information whatever you want to put in there. Save the Spreadsheet as Template in The titleblock you can do your logo or your clients logo. Another good Method what i use is the rS1.Method from Rheinhold Scheck its a perfect Method to Organize Excel Spreadsheet and make it sustainaible. + Still love you. great Job

  • Please!!! Make a video for making modern and old type of roof,dome shape..roof etc

  • I am a Professional Quantity Surveyor watching from Zimbabwe.
    Calculating costs is a piece of cake for me, but I'm impressed with your presentation!

  • i think i need to learn more …
    thanks for the video… great information
    the important things that me and my friend always forgot…. "ARCHITECTS DON`T WORK OVERTIME" its a nice word for me to read..

  • thanx for sharing video
    but it seems advanced level to me , 🙁

  • Every small business owner should go through this exercise. Fantastic info.

  • Thoroughly helpful and clearly explained introduction to the business of architecture. More like this please!

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