I'll build you a sphere of pre-chewed bubblegum if you pay me enough... but I'm getting my money up front.

Dan - Owner
http://www.Hi-TecDesigns.com

Ah, but that is the key, no money up front. They want the investigation into the feasibility done before they give the go ahead for the project.... and they don't want to pay for this investigation (which can take anywhere from 2 hours to 2 days) hence the balk.

I don't know how it is in Structural, but in my business I understand that the only thing I have to sell is my time (and the application of the underlying knowledge and experience). I do a lot of feasibility work, but it is all on the clock. My clients understand this and don't ask me to do it on the come (with some amorphous implication that I'll be repaid sevenfold for the investment when [if] it becomes a project). Someone asking for that kind of uncompensated contribution to THEIR project would be laughed out of this industry (Oil & Gas). If it is common in the building trades then you guys have seriously messed up. Hell, if an actual bid takes more than an hour to prepare I say "either compensate me for preparing the bid or understand that I'm not bidding". That almost always results in a charge code that I can invoice to.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

No, it is not standard in the industry at all. I'm not that old but I have been around the block a few times to realize that a project is not worth looking into within a 15 min conversation.

However, I am just fascinated with how people try to justify wasting my time with a stupid carrot on how rich the end client is. Indirectly/directly I have worked for well know billionaires and I don't really care as long as I get paid. I don't understand why these guys do.... they just love the carrots.

I guess this goes together with my other post of "why are engineers so bad at sales" in this same forum.

The carrot is intended to get you excited and give a good price since he will have so much more future work for you. The reality is, rich developers get rich one way, paying attention to the all mighty buck. Some of them can be great, and others you will find spend a lot of time in court fighting over paying bills. The carrot does nothing for us either.

typically every project should have a "Go" / "No Go" decision point before submitting a proposal. This is a good time to do your risk assessment. you should be calculating the risk / reward of the project and be prepared to say no. this is a good time to review the potential fee and profit, feasibility, credit rating of the client, conflicts of interest, schedule availability, competition and look for those red flags. If you see a flag, you just need to move on.

When I hear an architect say that he has a rich client with weird requests all I hear is:

"We just sold a pretty picture to a wealthy client that doesn't know anything about buildings. Our junior staff is going to try to put together some construction documents. We're going to rely on our consultants to flush out our plans enough to keep all of us from being sued. If we don't get sued and the client has another job, we're going to try the same line on a different engineer."

Then again, sometimes bad work is better than no work.

It seems to me that the people who are contacting you have nothing to offer except they they know someone with a lot of money, and they are hoping to team with you to get some of it, regardless of anything else. Rich people are surrounded by leeches. That is nothing new.

SteelPE: You are looking at this wrong. Assuming you are a small practice, single family residential for billionaires can be great work. It is much better than developer work. I have done several projects with clients of this nature who have given me true time billing with no estimate or cap, and multi year project schedules. Bank on 10 hours a week for 5 years. Its the kind of thing that puts kids through college. Your $500k fee will be modest in relation to the $30MM construction

Other advantages of billionaires homes is that if the project is 10% over budget, it means they are 0.1% less rich and therefore may or may not be a bit annoyed. If a developer is 10% over budget, its the whole project profit out the window and they sue you.

I will also advise you to not listen to architect's opinions about money. There are certain factual things they may inform you of, but their opinion of the lucrativeness of an opportunity is meaningless. If they cared about money they would not be architects.

Quote:

rich developers get rich one way, paying attention to the all mighty buck.

actually developers get rich by taking a chance and investing. not always risking their own money. and they often fail and lose everything. development is a dog eat dog industry. engineers and contractors working for the developers are usually the ones left holding the bag when a scheme doesn't work out.

cvg: correct, developers carry a lot of risk related to market pricing and the cooperation of all the parties involved, which is amplified by their their financial leverage. Donald Trump is onto his third or fourth bankruptcy. One implication of this is that they want to minimize risk wherever possible, so its hard to do anything other than cinderblock and vulcraft joists with a developer. They are over rated as clients. I have some developer clients who are amazing of course, but they are not the rule.

Billionaires have their own issues, but generally the terms of the engagement are much less onerous, and you have the freedom to design awesomeness. This is your big opportunity to:
1. Cantilever a whole house off the face of a cliff
2. Make a zero embedded carbon passive house with recycled concrete
3. Design for a 10,000 year service life
4. Make a titanium monocoque shell holding up the roof
5. Design an actively damped seismic isolation system
6. Build a gigantic all glass dome.

Your billionaire will adore you if you make it awesome. If he sees you as a commodity however, he will shop you around and nickle and dime you on everything.

"Yes, we can do it, but we're a bit backlogged right now <or whatever other excuse that seems appropriate>, so we'll need a P.O. to get the initial feasibility study going" ...

If the project is worth investigating, someone will pay it. If they pay you to do that study, great. If that sentence shuts them up and they get someone else to do it for free, no skin off your back. If they say they'll pay and they don't, you just had a low-risk way of adding someone to your "do not do business with ..." list that we all seem to have ...

cvg, yes, I understand that. We have worked with a few that have tried and failed as many as four times. To determine how important the dollar is to a client we ask a very simple question. Do you see your bldg as an investment or an expense? From that I will know immediately what will be the focus as we go thru the design. Those that simply see a bldg as an expense rarely appreciate that their are many options with pros and cons to the long term performance of the bldg. Those that see a bldg as an investment tend to be a more interested to discuss options.

glass, I think most see us as a commodity. If that were not the case the two envelope bidding process would be far more common.

Not sure how many other people do this but often for repeat clients, who we've established a good working relationship with, we'll do "free" preliminary investigations with the understanding of if the job goes forward we'll bill for that time with the final bill. If the project doesn't happen then oh well. We justify this because often or not these are projects that need to be done, they're just not the priority at this time and may not be worth the money to the client. Many of these projects that don't get out of the gate will come around 2 years later (often with a "we need this last week, how soon can you work up a design?"). Overall it works well enough for us.

Maine Professional and Structural Engineer. www.fepc.us
(Just passed the 16-hour SE exam, woohoo!)

Brad: You are a commodity if you are working on standard stuff. If you are non-standard, there is no marketplace for the service so you are by definition not a commodity. This is the great opportunity of working for billionaires.

A little bit of free work at the beginning can be worthwhile. Projects are like a short term marriage, and you have to date each other a bit first to make sure you are a good fit.

glass, I have done a lot of free work up front for clients I see potential in, but that is only after we search the court cases to see if they pay their bills. We have had problems in the past and a little searching can avoid that nowadays. Most of our richer clients fall short of being billionaires, and I think those are in a category of their own.

Brad: At my old firm we used to categorize our high end residential clients by how many zeroes they had in their net worth. Club eight being $100MM, club ten being $10BB. I have had success with clients who are members of club 6. The enthusiasm of the owner for the work is key. Telling a millionaire that they should spend $900k on a glass stair is a harder pitch than a billionaire, though is doable if they really want it.

Much of my work revolves around me pitching an idea to a wealthy client. This is not the same thing as doing a concept design for something they know they want. It also hopefully gets you into a no-bid situation for your proposal. Competitive bids for design services suck!

I'm sure everyone has that memorable client with a breathtakingly bizarre request. I don't want to give too much away, but a colleague of mine had a client that wanted a piece of Damien Hirst art installed in a high rise building at the penthouse level. It was a large farm animal suspended in a glass tank of formaldehyde. Floor calcs and mods had to be done, a lift study had to be performed for the city, and the building and facade had to be modified. The artwork had already been completed, so it wasn't like you could take it apart and drain it and take it up in the elevator. The cost to get the piece on to the island and up to the 44th floor was staggering. It took the largest crane in the state three days to get it up there (had to stop for high wind for two days), not including set up and break down time. But the gentleman wanted the art piece in his residence, no matter what the cost. That must have been and interesting first conversation, when the call came in.

Disturbing... that someone would want this as the centerpiece to their abode/workplace.

http://www.lifo.gr/uploads/image/707287/damien-hir...

Dan - Owner
http://www.Hi-TecDesigns.com

Gross, I would not want that in my home.

On the part about doing work for repeat good clients. In a round about way I have had my clients take my information and then award the engineering to another company before.
This was a client who I have worked with for 10+ years. So I try to avoid this where ever possible.

Why does that cow have two front ends?

Eats more to get fat more quickly... and none of the nasty pies to worry about.

Dan - Owner
http://www.Hi-TecDesigns.com

Three competing forces at play here:

(1) the closer you get to the money, the more money you make,
(2) free work is marketing, and marketing only returns on the investment when you land the work you're fishing for,
(3) Opportunity cost.

If you're setting aside paying work to do non-paying work on the hope that the non-paying work pans out, you're doing it wrong. If you don't have paying work to do, then you should be marketing, and spending your time on whatever activity that's most likely to land you more paying work. If that marketing activity turns out to be pro bono work to land a future paying job, so be it. But don't complain about it. Just admit to yourself that it's marketing, and be glad you're not filling the same time doing cold calls or passing out business cards to strangers, because those activities are infinitely less pleasurable than actually doing work. At least for me, anyway.

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com

beej: you are basically correct in your assessment of free concept design as marketing. The hazard of course is that they take your free work and run away with it. At what point do you cut clients off? How do you convert your free work into a job? Its easy to get taken advantage of by under resourced or unethical clients in situations like this.

In such situations I limit myself to a couple of meetings/long phone calls and provide only nicely drawn but not detailed sketches. I think its key in such situations to hold back critical information about how to make the job work, and make it clear that they will need to hire you to have you spill the beans. I think after a certain amount of this kind of work you should simply ask to send them a proposal.

For a single person firm, a serial work/marketing cycle might be OK, but only if the market is hot. IF the market is cold, that sort of cycle would tend to lead to large gaps in the workflow, since it might take a while to line up a new job. Steady workflow typically requires some overlap of work and marketing.

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