|
View previous topic :: View next topic
|
| Author |
Message |
mx2
millennium club
Joined: 18 Jan 2006
Posts: 1979
Location: Miami, Florida
|
 Posted: Fri Mar 23, 2007 4:53 pm Post subject: Cost control |
    |
|
Any of you experience the same phenomenon of working for a fee and then when finally calculating the final cost output, realize then money was lost on the project? It just seems all too common in this profession...although, thankfully, not always common. 
Just curious about other views...
mx2.5
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
|
| Back to top |
|
 |
The Architect
Joined: 09 Jun 2005
Posts: 184
|
| Posted: Sat Mar 24, 2007 12:41 am Post subject: |
|
|
Yep!, that used to happen to me too - until I got greedy 
Take care... |
|
| Back to top |
|
|
mx2
millennium club
Joined: 18 Jan 2006
Posts: 1979
Location: Miami, Florida
|
| Posted: Sat Mar 24, 2007 7:10 am Post subject: |
|
|
I should have asked what I really wanted to know: how did you (anyone) remedy this problem?
Greed certainly can be a motivation,...so is losing your shirt. Fortunately I'm not responsible for the others and can always make lateral moves until I die...however, that's not my goal, nor does it make any business sense in any profession.
mx2.5
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
|
| Back to top |
|
|
The Architect
Joined: 09 Jun 2005
Posts: 184
|
| Posted: Sun Mar 25, 2007 11:05 pm Post subject: |
|
|
Alright mx, don't take offense to this ok?
If you have no talent, no voice or an architectural stlye (and God forgive me for using such a word as 'style'), then you can be passed by as easy as anybody else. The only way 'to make a buck and get something built' is to bid as low as possible.
In which case, every now and then you will take a hit.
But if you do have a voice, if you understand architecture on an aesthetic level and have developed a 'style' (and God forgive me for using such a low life term), eg. Charles Graves, then GREED IS GOOD!
And one up from the 'style' level, is the vile bastardization of architecture on the philosophical level (and these guys are real slick), ie deconstructionism etc., etc.. And especially for those 'f*cking punk hustlers' GREED IS GOOD!
And one up from that level are the souls like me, and I'll save that for another thread.
Take care... |
|
| Back to top |
|
|
Kevin
Site Admin
Joined: 13 Apr 2004
Posts: 1407
Location: Eugene, Oregon
|
| Posted: Sun Mar 25, 2007 11:09 pm Post subject: |
|
|
| Interesting rant, "The Architect", and thanks for expressing your values - but it doesn't really address the question, either as originally stated, or as patiently clarified. |
|
| Back to top |
|
|
The Architect
Joined: 09 Jun 2005
Posts: 184
|
| Posted: Sun Mar 25, 2007 11:16 pm Post subject: |
|
|
kevin, what are you bored?
Stop dogg'n me around! Get a life!
Take care... |
|
| Back to top |
|
|
mx2
millennium club
Joined: 18 Jan 2006
Posts: 1979
Location: Miami, Florida
|
| Posted: Wed Mar 28, 2007 11:12 am Post subject: |
|
|
You can't possibly be an architect...you haven't addressed one serious issue with any validity except for what anyone can learn while perusing bookstore sales. Greed is not a line-item on a balance sheet...get real "dude". I asked a serious business question that I have experienced in 4 offices after more than 10 years in the profession and was looking for a serious response. So, to use your lexicons, "stop doggin' me around and get a life as well"!
mx2.5
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
|
| Back to top |
|
|
elisa kouloumenta
Joined: 24 Sep 2006
Posts: 110
Location: greece
|
| Posted: Thu Mar 29, 2007 12:15 am Post subject: |
|
|
hi mx2.how are you? your question is something i think about a lot too, and it's really a big matter of our profession, the way we must deal with money in order to gain something. It's also true and very common that we can't always make an expenses plan, and not get out of it.It's difficult to foresee the working hours, the plot expenses, the 3d models price...I want to be optimist though and i believe that experience will help. take care
_________________
elisa kouloumenta |
|
| Back to top |
|
|
mx2
millennium club
Joined: 18 Jan 2006
Posts: 1979
Location: Miami, Florida
|
| Posted: Thu Mar 29, 2007 9:37 am Post subject: |
|
|
I was told early on in my career that experience would solve this issue, but I've seen the most experienced and brilliant of architects lose lots of money on certain projects, in both small and large firms. It seems to be a game of chance everytime, simply because we're guessing the future outcome with so many variables and unknowns in a profession that is pressured to provide fixed preliminary fees long before the site is even purchased.
"Cost-plus" contracts are the best however it's a rare client with business sophistication that would even consider this scenario, as most demand a lump sum fee. Then when cost overruns are well managed by a vigilant architect, the clients become agitated with the architect and feel they are being robbed...
I appreciate the fact that you, Elisa, acknowleged the issue because it proves it's an industry problem, not an individual issue as previously eluded to by our neighbohood joker.
mx2.5
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
|
| Back to top |
|
|
The Architect
Joined: 09 Jun 2005
Posts: 184
|
| Posted: Sun Apr 01, 2007 1:10 am Post subject: |
|
|
mx, my point is that if you have a 'value', you can demand/command a fee that will easily cover any unforeseeable costs - obviously you don't have any talent - ergo your replys?
I always thought of a you as more than just a grunt - perhaps I was wrong.
In my realm of Architecture - greed is good.
Take care... |
|
| Back to top |
|
|
Kevin
Site Admin
Joined: 13 Apr 2004
Posts: 1407
Location: Eugene, Oregon
|
| Posted: Sun Apr 01, 2007 10:49 am Post subject: |
|
|
Let's take the value for a given - obvious as it in this case - and because only that branch makes for an interesting conversation.
If a firm has a sharply defined niche in which they are doing largely repetitive projects, then after a few rounds, estimating the cost budget for design, documentation, and construction mangement should become routine. If not, perhaps there are hidden personnel or management issues with where the time is going.
If a firm does creative work on a diversity of projects, then it seems to me sometimes it will guess wrong about the costs that go into a project. This kind of projecting "error" is recognized as normal in many lines of business. In book publishing, the expectation as of a few years ago was that only one book in five would earn a significant profit. The viability of the business is based on whether that 20% or so can carry the rest. Profitability is similar in the Hollywood movie business and the popular music business.
Such variability can be incredibly hard on small organizations, like many architecture firms. Cost-plus is a great way to go when you can get it. What other tricks of the trade for design firm budgeting have people experienced? |
|
| Back to top |
|
|
mx2
millennium club
Joined: 18 Jan 2006
Posts: 1979
Location: Miami, Florida
|
| Posted: Fri Apr 06, 2007 2:04 pm Post subject: |
|
|
Thank you Kevin for such a thoughtfull response and I appreciate the exchange and didn't consider the comparison to other industries with like situations. Cleints have always seen our profession as a distinction between hard costs and soft costs however it's clear that whether it's providing a service or selling a commodity there still remains economic challenges in the prediction of production costs. It remains a fact, as you describe, that the business of architecture is vulnerable to variability. And indeed, in my experience, it has absolutely been the same model of the approx. 20% of projects that carry a firm...even the #2 firm in Florida that I worked for (in terms of billings). I was always surprised at how coy the Partners were when we discussed the loss of profits on any single project...but they were always very aggressive towards landing the next "big one". It had nothing to do with talent...in architecture at least.
But I will give some ideas I've encountered:
-time management spreadsheets (great tool, difficult to coordinate)
-assign most experienced to money making projects (bleed out other end)
-sub-contracting mundane aspects of architecture (quality issues)
-cut quality of production (bad idea...all around)
-add "safety factor" in fees (lose to low bidder often..good riddance I say)
-marry rich (best idea around)
-join the circus (and follow "The Architect's" lead) 
Essentially, there is no golden ticket...not even the best of firms can claim 100% profitability and that's the issue. It's just the nature of the beast...
mx2.5
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
|
| Back to top |
|
|
mx2
millennium club
Joined: 18 Jan 2006
Posts: 1979
Location: Miami, Florida
|
| Posted: Mon Apr 09, 2007 4:46 pm Post subject: |
|
|
I was just listening to the radio and an interesting comment was made about economics...that it is more of a biological science. The X-factor simply is unpredictable and quite frankly, it makes a whole lot of sense when looking at businesses that don't sell commodities...surely there must be tons of info out there on this economic model.
Now I'm curious....
mx2.5
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
|
| Back to top |
|
|
SDR
millennium club
Joined: 02 Oct 2004
Posts: 1884
Location: San Francisco
|
| Posted: Mon Apr 09, 2007 5:12 pm Post subject: |
|
|
Well, it is easy to lose money, in any business. There seems to be a certain personality type which can best combine the art and the business of architecture -- and those we read about and admire for their design, must have that quality, or we would not have heard of them. (There are few architects who are known via unbuilt work.) Here are words from a man who practiced 100 years ago; he survived to the age of 89 or 90, though his best work was done before he was half that age. Defending the expense of one of the last great houses, to its owner, he said, at the age of forty-two:
"In some cases I made corrections in the work done when I was not on the ground. Of course this could have been done cheaper in the common way and by sending a man from the office instead of myself. But does not the result justify the expense?
"Art reduced to a commodity of course can not argue so, for investment seeks fixed financial return. But living art never can be so reduced. It must have become a curio in the hands of a dealer before it can be bartered without injury to the art. This is one good reason why living art scarcely ever can compete with the old. Once exploited it ceases to be art.
"You say that you have never before paid so high a price for this kind of work; to which I reply that I believe you mis-judge the character of mine. In other words, is the comparison fair? Knowing what I do of the architectural practice of today I can not be very far wrong. Furthermore there is no one to my knowledge who has the temerity to limit the number of commissions to a personal supervision.
"It is too much to expect that anyone may see the excellence of this kind of thing in a few days. The work itself took months to execute and the best years of my life went to develop this style. I realize that you are concerned in affairs much more weighty than a little country home in the Ojai, but trivial as it may seem to you my effort was for the best. My plea is not so much for the fact as for the principle -- not so much for the artist as that art may find expression.
"I do not claim for my management the strictest economy. Art and commerce are divided and must ever be .... If one can afford to have these things, does it not argue as well for you as for art that one should have them. I do not speak on my own authority alone as to the intrinsic art value of my work, though I could never have produced it without knowing that ...
"Into your busy life I have sought to bring what lay in my power of the best that I could do for art and for you. How I wish I had the power to look into your soul to more fully understand not what you think but what you feel. I doubt not for a moment your power of appreciation, but I should know better what to say without arguing.
"I have known many people that love the beautiful but it is beyond their reach. For you all these things are possible and, believe me, I have given what I could personally because I thought you would like it and because I felt sure that you would, in the end, appreciate.
C. Sumner Greene" |
|
| Back to top |
|
|
solidred
Joined: 05 Jan 2006
Posts: 732
Location: Scotland
|
| Posted: Tue Apr 10, 2007 5:25 am Post subject: |
|
|
I haven't responded previously to this as my experience on the matter is pretty limited so far. But you're certainly not alone MX2: lots of jobs over-run on costs versus fees. At the firm I work with at the moment, a profit is subtracted straight away then the 'profitability' of the job with the remaining income is monitored thereafter. One thing that hasn't been mentioned so far is that even though most clients are loathe to engage in a non-lump-sum fee these days (a percentage of construction costs was, of course, the norm in the olden days) and cost-per-hour arrangements for anything but preliminary work are virtually unheard of, clients are often reasonable if you can point out clear extensions to the work you originally allowed for. It helps, especially, if you're clear what your lump-sum is designed to include in the first case. Anyway, if you can point out additional work you've done with some clarity, you may be surprised to find them willing to top up your original fee.
So, the lessons are:
1. Make absolutely clear what your fee covers in the first instance, including any contingencies
2. Ensure that work which you believe to be additional to this is marked as such by employees on their timesheets
3. Ensure your client knows you believe you're expending these 'additional' resources at the time, although don't piss them off by dogmatically refusing to do the work until it's paid for unless you like corporate hardball...
The biggest issue, of course, is in determining which fee to pitch in with in the first place. This is the real, real difficult one, specially with variable project workload and new clients... no answers to that one. And whilst some 'starchitects' are lucky enough to land 'name your price' comissions, many of them even still have to bid competitively like everyone else. |
|
| Back to top |
|
|
|
blogger
del.icio.us
digg
slashdot
