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RE: Fees

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Dennis,

 

Yours was a thoughtful and genuine note, my friend.

 

Take heart though.  We may not be business geniuses, but we are smart, licensed professionals – most of society simply cannot do what we do, and if they can, only with education and experience.  Our society and government is structured so that we are needed and valuable.  We strive to understand what “the need” is, how to demonstrate it to others, and deliver appreciated service.  No easy answers, but this will all iron out in time. 

 

Ed Tornberg

Tornberg Consulting, LLC

503-551-4165

-----Original Message-----
From: Dennis S. Wish, PE [mailto:dennis.wish(--nospam--at)verizon.net]
Sent: Thursday, February 23, 2006 22:28
To: SEAINT Listservice
Subject: Fees

 

I've read all the great speeches on what we should charge and how we cut our own throats. It would be great to work hourly 40 hours a week when in reality we are lucky to get may 20% billable time in when we are in a sole proprietorship business. Not only are we side tracked by telephone calls seeking our help, but we would penalize our clients for our loss of attention and the time it takes to get back into the trend of thoughts that we lost before the phone rang or someone walked in or the dog cried to go out - any number of excuses. Mine are even stranger - my wife works nights, I don't sleep nights and as it works out my day doesn't even start until around 11:00AM - yet here I am at 11:00PM still working. The best time to be productive is when the phone does not ring and we can keep our minds on the design.

This is a business. I've been warned against admitting this by expert witnesses. The fact is that we are in business to make a living and this includes dealing with competition. We may cut our own throats, but the facts are that there is always somebody hungrier than we are. Even worse, the client almost always gets what he pays for. If he is price shopping do I have the right to pass up a week or two income for my family because I don't want the headache of dealing with a difficult price shopper? I do have clients who don't care about the money because the profits they tend to make will compensate, but this is not the rule - it's the exception.

You charge what you have to in order to make a living. If this means that you have to cut your fee's when the work is slow, you do it. I am from the old school and no matter how much my wife likes her job as a nurse, I feel that I should be able to support my family. In reality, even if I cut my price I end up earning more than my hard working wife who is a nurse. I can sit on my ass and earn enough in one day to make up for the 30 or 40 hours per week she has to run her tail ragged. What I can't provide is health insurance for us and this is the one benefit her job brings in that I can't match. If this sounds angry, I suppose it is.

There is plenty of work out there, but there are a lot of price shoppers and now there are a lot of firms who are starting to outsource their work to other countries and they know enough to undercut my fee by less than 10% to get the job while making a tremendously higher profit margin than I do. The problem is that the longer we wait and the harder we try for higher fees the worse it is going to get when the competition is off shore.

I also have schooled engineers without licenses who are practicing in the area and who hire engineers or architects outside the area to wet seal drawings. They have been reported to the state licensing board in California (BORPELS) but the workload is such that BORPELS is three to four years behind and every fee months I get a friendly letter from them telling me that they still have the case open but are understaffed. So what can I do when an unlicensed engineer underbids me and gets the job while the agency that licenses us does not have the time to put him out of business?

This is far from a good business environment these days and the best we can do often requires us to push our prices down in order to get some work. The only type of job that I can get full fee's for are those that require repairs and must be done in a short time. The owners on these can't sell their property until the repair is done and therefore they are willing to pay whatever it takes to get the work finished.

Again, I apologize for what sounds like anger, but it is more frustration at having to work that much harder to get the fee's that we easily got last year.

Dennis

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