Great question ... tough answer. It really depends on what type of jobs you're taking on.
I understand the need to have a quick & fast way of calculating all of the costs that go into a project. Using percentages is perhaps the fastest of all but the cost of drafting is completely relative to the work being drawn. My method involves counting each wall & then each section ... 10 walls & 5 sections could be the same cost as 5 walls with 10 sections. However your cost might be drastically different in these situations. This makes using percentages a bit risky.
Example 1 : $1MIL Hospital Job -
Thousands of cabinets but only 10 cabinet types ... 4% = $40,000 - this might actually be a $5,000 drafting job making even 2% an outrageous cost.
Example 2 : $150,000 Hotel Lobby - 4% = $6,000 - every wall, every cabinet is different - this might actually be the right price.
Example 3 : $30,000 Design Build Doctors Office Reception area : 4% = $1,200 this might actually be the right price for the first set of drawings but may need to pay up front & go on retainer after a few days of back & forth.
It's always fascinating to me that our clients that also have in-house drafting teams are typically right in line with our pricing. It feels great when you know your client understands your cost of doing business.
If you do not have a working relationship with a draftsman/drafting team ... you might start w/ 4% but be prepared to adjust as you go. I often provide pre-bid estimates for established customers who need to dial in their pricing methods.
The 3-4 % rule is not really a rule. It's more of a rough guideline. Millwork companies across North America use different budget standards depending on their business practices.
Applying a standard percentage right across the board can cause frustration and needless concern.
We have a client who only specializes in high end kitchen cabinets ( roughly between 50-75k per kitchen project) . The shop drawing detail required for their projects is not terribly different than that of another client who probably averages 12-20 k per project. Now, sure the high-end job has some extra pages, but no where near an extra 2000$ worth. My point is that a good place to start is try to assess what information and details and density you need for your business (in terms of shop drawings). If you are an AWI or AWMAC member then make sure you are attaining those minimal standards otherwise find a standard that your business is comfortable with, one that you can justify well to your clients, and then roll with it. You will know within the first 2-3 jobs what you will need and what is your comfort level.
One more point. Shop drawings for a residential client base can be very different than that of a Commercial / Professional client base. Architects and designers focus more on build methodology and construction style, while residential clients focus easier on layout and visual representations.
I wont even touch on the next point which is.. what does your shop floor need in terms of drawings.
Price depends on complexity and extent of work. High-End jobs usually require lots of rework due to frequent changes and redesigns. Commercials are easier as mostly it is standard casework and lots of repetitive items.
It all come to time spent to generate decent and healthy shops.
OK, so as we all know, High-end Residential is a whole other animal. God help the people who realize that too late. Should limit this conversation to commercial, right?
A lot of people that try to do (high-end) residential, find out how hard it is to make a profit (lots of people in commercial who think they can dabble in it), end up vowing never to do a residential job again.
I have to say, the funny thing is, you lose the most money on a house that’s 4mill. to 10mill.$ (house value) I think it’s because they have the most changes, design-as-you-go.
Anyway, 10-12% for starters for very high end residential.
I usually go 15% (of the gross job bid). If you’re going to pay for an “engineering department.” That includes red-lines until it’s finally approved (approved submittal shop drawing). And then, you have the shop drawing for the shop and cut-listing. I’m going to let you figure out for yourself it that’s included in the 15%. It does not include mistakes, changes, or adds (after approval). Everyone seems to have their own system for cut-listing software, so, that’s a very variable number to try to include in your 15%. Usually you cut-list by hand whatever you can’t send that cabinet to your (square box making) cut-list software, i.e., the custom stuff. Now you have to have a long LONG discussion about the difference between MicroVellum and CabinetWare – sort answer…, not MicroVellum! Anyway, software and software operator expense is a whole other conversation.
Commercial wise..., it's not that hard to figure out....
i have used some basic multipliers to bid for 30 years. now i have logs to confirm time on certain types of jobs as a cross reference. i also cross reference with factories across country. because i primarily work for the trade i have to be in the ballpark to be competitive, although i am usually a little higher. the onlyntime my multipliers dont work are on inexpensive material like poplar or really expensive material like teak or rosewood. then i have to figure material and labor separately based on market and typical labor for type of job. drawings are figured into estimate cost or charged at daily rate. that said i dont build cabinets, only millwork bench or millwork.
Great points by all above. I would say 2-4% is average (for commercial). If you only use percentage for shop drawings you will over estimate or under estimate for the reasons stated above by other posters... you could say its an artform, there are MANY factors to consider. I don't need to know the contract price, I base it off the drawings/difficulty and level of detail, but it is nice to know as a reference point.
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