Comments on: Cutting Fees To Get Work http://blog.civilengineeringcentral.com/2009/02/05/cutting-fees-to-get-work/ building teams . engineering careers Wed, 28 Jul 2010 15:00:47 +0000 hourly 1 http://wordpress.com/ By: Tom Pickering http://blog.civilengineeringcentral.com/2009/02/05/cutting-fees-to-get-work/#comment-225 Tom Pickering Mon, 09 Feb 2009 22:41:22 +0000 http://civilengineeringcentral.wordpress.com/?p=718#comment-225 I've heard this discussion for many years and lower rates sends the wrong message for future work. But, at the same time it is a balance of total price of base work and scope of services. A task a year ago still requires the same base effort to accomplish today. Even with all that said and a contract is in place, “In this current environment, is the Client financially stable and funded to pay for work performed?” If not, as you deeper into the project, you are worst off having incurred expenses, salaries, and fee just to keep staff busy; now you are spending more good money to chase bad to collect. Many right now are chasing the next project at a reduced rate or base fee and even tasks for free regardless of weighing the risks and rewards just to keep staff busy. As an Owner, the balance of risk and reward are always a part of the decision process in good times and bad. At times, you have to say no rather than take that next project on. I’ve heard this discussion for many years and lower rates sends the wrong message for future work. But, at the same time it is a balance of total price of base work and scope of services. A task a year ago still requires the same base effort to accomplish today.

Even with all that said and a contract is in place, “In this current environment, is the Client financially stable and funded to pay for work performed?” If not, as you deeper into the project, you are worst off having incurred expenses, salaries, and fee just to keep staff busy; now you are spending more good money to chase bad to collect.

Many right now are chasing the next project at a reduced rate or base fee and even tasks for free regardless of weighing the risks and rewards just to keep staff busy. As an Owner, the balance of risk and reward are always a part of the decision process in good times and bad. At times, you have to say no rather than take that next project on.

]]> By: Mark Shearon http://blog.civilengineeringcentral.com/2009/02/05/cutting-fees-to-get-work/#comment-223 Mark Shearon Fri, 06 Feb 2009 15:01:13 +0000 http://civilengineeringcentral.wordpress.com/?p=718#comment-223 This debate will forever rage on, I think. It is an interesting quandry that engineering companies have to deal with more than most other professional types, primarily because so many people employed in the industry have little to no financial training and understanding of pricing vs. profit. So we think of "lowering our rates", In $/hr terms, to reduce the price. This is fine for a limited number of jobs/clients, but if it begins to make the majority of your business, then margins fall and profits disappear. My instruction to all project managers and seller-doers is "lower the total price, not the rates". The resut is the same for the base work, but any changes come at your standard fees. Good luck out there! This debate will forever rage on, I think. It is an interesting quandry that engineering companies have to deal with more than most other professional types, primarily because so many people employed in the industry have little to no financial training and understanding of pricing vs. profit. So we think of “lowering our rates”, In $/hr terms, to reduce the price. This is fine for a limited number of jobs/clients, but if it begins to make the majority of your business, then margins fall and profits disappear. My instruction to all project managers and seller-doers is “lower the total price, not the rates”. The resut is the same for the base work, but any changes come at your standard fees. Good luck out there!

]]> By: Jeffrey Mills http://blog.civilengineeringcentral.com/2009/02/05/cutting-fees-to-get-work/#comment-222 Jeffrey Mills Thu, 05 Feb 2009 21:52:57 +0000 http://civilengineeringcentral.wordpress.com/?p=718#comment-222 Timely article on cutting fees. No reduced fees yet from my doctor or lawyer. For that matter, even my mechanic has not lowered his fees. Is is a question of industry value in the eyes of civil engineers and/or clients. Timely article on cutting fees. No reduced fees yet from my doctor or lawyer. For that matter, even my mechanic has not lowered his fees. Is is a question of industry value in the eyes of civil engineers and/or clients.

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