You don't have a pricing problem.

You've got a value communication and boundary problem.

When the value is clear, they're much less price sensitive.

We need to charge our worth.

And I think that's the mindset that's lacking.

just raise your fees straight away.

Add 10 to 15% on it.

And what I've found is, is most clients, when the value is clear,

they're much less price sensitive.

William Rings Dorf is the founder of William Rings Dorf Consulting.

He helps architecture firms master profitability, process and purpose turning

chaos into clarity so you can design with.

Freedom and confidence drawing on free decades of UK and German project

experience is coaching Ben's practical systems with architectural insight.

This work is part of Into the Nest, an award-winning sustainable

practice, giving his guidance, credibility, and a live design context.

To grab a copy of William's ebook, how to Fix Profit Draining Mistakes in your

Architecture firm, head over to William.

ring.com/profit Draining mistakes.

Willie, welcome to Architecture Business Club.

Thank you very much, Jon.

Lovely to be here.

Uh, it's great to have you here.

Um, we've had a few conversations about this and I'm really happy to be able to

host this conversation with you today.

Before we get into the topic though, c can you tell me a bit about what

you like to do outside of work?

Yeah.

Um, like you, I see you have a guitar hanging up in the back.

I'm actually a bass player, so, um, that's one of my biggest hobbies at the moment.

Trying to perfect base.

Uh, but I do love, I do love to have a little, have a little

practice every now and then.

So that's my main, I'd say my main thing.

And then I think the other thing is we, we moved down to Chichester on the South

coast, uh, about 18 months ago, and it's on the doorsteps of the South Downs.

And, um, my, both my wife and I, we love, we love to walk and hike and things, so

we do a lot of that these days as well.

So, um.

Yeah, that's what I'd say I spend most of my time, my free time doing

when I'm not, uh, tinkering away here in front of the computer.

How long have you been playing bass?

Uh, longer than I dare to, to say really?

I've probably started well over 20 years, 25 years ago.

I think it was about 25 years.

Yeah.

Mm. Oh, cool.

Yeah.

And any any particular favorite types of music that you like to play or,

The, my favorite type of music to listen to is

jazz, but it's the hardest to play.

so the one I like to play best is I, I like to play blues.

Yeah, blues and funk and things like that.

Something with a, with a bit of a beat to it.

That, that, uh, with a good base, you know, good baseline.

Always a good one.

Sounds like a lot of fun.

Yeah.

Um, well, as a fellow, you know, aspiring musician who's also been

playing probably too long, uh, to think about it, it's a fantastic hobby.

Yeah.

Yeah.

Really good fun.

So, we are gonna talk about the problem with.

Undervaluing your expertise and how you can fix it.

So I think this is gonna be really useful for everybody, I think to begin with.

Why do you think undervaluing your expertise is such a big problem?

I think it, first of all, it's systemic.

I mean, even the RIBA, they acknowledge systemically low fees.

And it's just sort of become normal now.

You know, it's just normal that we, uh, that we are as a profession, charging

far too little for our services.

And what that does, it sort of, it leads to a, a downward sort of cascade

because, you know, if you have low fees, you need to do more projects, so you

have less time for management, which means you're risking quality or longer

hours, which then can lead to burnout.

Uh, financial constraints, no budget to hire new people.

So it's sort of, it's a bit of a, it's a cycle, you know,

it's, it's a downward spiral.

And the problem with that is, is you, you, you can't retain good

staff or you can't invest in systems.

Um, and also undervaluing it, it sort of, it invites scope creep, which is,

you know, it's, it's just a killer.

It's a business killer.

And quality's gonna suffer.

And also, you know, your, your timeliness, you're not gonna manage your deadlines.

It's, it's just undervaluing is unfortunately, uh, it's really

pushing clients to, to think about price first and value second.

And unfortunately, we are not really doing much to help as an industry.

So this, this is a really big problem you just outlined there,

that this, this spirals into a whole cycle that's difficult to get out of

where there's, there's all sorts of sub.

Problems that then like, or the problems that come up from it,

that, that we can track that back to undervaluing your expertise and

essentially not, not charging enough for the, the services that you deliver.

I've definitely done a lot of undercharging over the years when I've

been practicing architecture in the past decade or so, there's a lot of other

people that struggle with that as well.

Yeah.

Yeah, I mean, I, when I first started, I, I, I guessed an hourly rate and I didn't

probably change it for 10 years, you know?

Um, and you still haggling over fees.

Well, you know, it's,

Yeah, it's that kind of classic sort of thing of when,

particularly when you start out, um, with your own practice or as a,

as a freelancer, sole practitioner in architecture of like, well,

whoa, being a kind of, maybe you might have had an idea of what your

previous practice charge doubt at.

you know, but then it's kind of like, like, hmm, what, what do I charge?

What do I start with here?

It can be so difficult to do it.

Um, why, so why do you think it happens so often then?

Why do you think, um, undervaluing your expertise is something

that just happens frequently?

I mean, going back to when I first started, when

I left university, you know, I, I was taught to design, you know,

we were taught architecture, we were, we were taught all of that.

But what we weren't taught was, uh.

You know, we we're business skills, so pricing negotiation, business

models, none of that sort of thing.

So there's definitely a, a, a, a training gap there.

So when you, when I started out, and I'm sure when a lot of, when a lot

of other architects when they first start out, you know, there's, there's

a lack of confidence, I would say.

You know, there's this fear of that you're gonna lose your clients.

Um, we are not really sure how to articulate our value beyond just drawings.

so.

We can't really calculate our true costs.

You know, we don't really know what our effective hourly rates are.

we forget about overheads and opportunity costs and things like this.

And then there's also the thing you know, we, we have industry norms.

So, You know, we are, we are told okay, fees, uh, should be percentage

based, you know, so however much it's gonna cost, it's gonna be a percentage.

we're told that's what others do.

But the problem with that is it's like, um, it's not, we

are not talking about value.

And that's, that's something I I, I talk about a lot.

It's, you know, we, we need to be, we need to be concentrating on the value

that we can add, not just a, an hourly rate, and we're also, we're not really

taught sales, you know, sales is a, you know, it's a, it's a, a. It's a

difficult, it's a difficult topic, especially for, for, for professionals.

So we are not really good at talking about money.

We're not good at addressing any objections.

Uh, so, so what we tend to do is then we'll end up discounting our work, or,

or, or basically giving away scope.

I don't think it's a talent problem.

I think it's more of a, it's more of a systems and a mindset problem,

and it's really rooted in how we've been trained and just how

the industry behaves as a whole.

Yeah.

Yeah, I mean that thing of, Charging by that

hour, like hourly rate work.

I mean, that's one of those things that like you, the more efficient, the

better that you get at your craft, at your profession, you, if you're charging

that way, you're penalized by it.

the percentage fee thing that, um, there's not always that direct correlation

between the contract value and the.

Complexity and, and time required for the job.

There could be other mitigating factors involved as well.

Like, you know, if you have a, um, a particularly demanding client or a

complex brief, that might mean that you, you know, you could have two

projects with the same value, uh, same contract value where one is taking

far more resources than the other.

yeah, I think pricing can be so complex for people.

And as you say that, you mentioned about mindset as well, uh,

about how that plays into this.

I remember when I was studying, you know, we, fees were never

mentioned, you know, there was no such thing, you know, we just, we all we wanted

to do was design beautiful buildings, which is, you know, which is fine.

Of course we, that's what we want.

we wanna run a practice, we need to charge our worth.

And I think that's the mindset that, that's lacking this this lack of

confidence, I think in our, in our own value it is, like I said earlier,

I think it's become very systemic.

And we, as an industry, I think we need to really be addressing that when you're

studying at in universities not wait till, till we are having to actually,

you know, make a living at this job.

I think yeah, there's a couple of things

to pick up on there, William.

I think that thing of.

Mindset about it.

I think for sole practitioners, for the smaller firms that we

can often as creators be so emotionally invested with our work.

And when that gets to the point of pricing things there can be that feeling where

we get a little bit too attached to price in that it's a reflection of like.

Us personally we, it can be very hard to see it objectively because there's

that sort of like emotional sides to maybe your own relationship with money

and your own kind of money mindset that can affect what you are willing,

what you're willing to charge, rather than being more logical about it.

And actually looking at what you should be charging or what you

could be charging versus like, just, oh, can I, can I ask this much?

Do I feel comfortable with this?

I think the other thing as well, transparency be interested in your

experience when you'd, dealt with or worked in other practices in the past.

Did you find it to be transparent about project fees?

Because my experience was that.

I really didn't have an understanding from the practice leaders that

were agreeing and setting the fees.

I would be part of a project team.

I had no clue about the finances on the projects.

I didn't really have an understanding of how much money was in it for the

practice to inform the way that we worked and, and what we did on the projects.

Certainly in terms of hours.

What was your

experience of that?

no, it was the same.

I mean, I can't explain it really, but it was, it was, um, yeah, exactly

like you, you know, we, we were given our tasks, our projects, and, uh,

we did our work and we got a salary.

But how, how fees were worked out, how fees were calculated, um, was very opaque.

I mean, I dunno why.

I dunno, I dunno.

I think it would certainly help, I think anybody who's employed, if they

sort of could understand, um, again, you know, just if they could understand

their value, you know, simple as that.

If, I think it would certainly help people.

Really understand help architects understand exactly what their worth

is, if they actually knew how they were being, you know, how they were being

priced, how they were being valued and how the jobs were valued, et cetera.

But yeah, there is, uh, a definite lack of transparency, I feel.

I'm not sure.

I mean, I haven't, um, I haven't been an employee for a little

while now, but I'm not sure.

I, I doubt it's changed personally.

Uh, yeah, I, I agree with you there.

I, I very much doubt that it's changed much at all.

The good news is that you have uncovered how to fix this

problem in five simple steps.

Would you be able to walk us through that, uh, one step at a time?

It's actually, if I, if I break it down,

there's actually, I would say.

There's a couple more steps to it.

But I mean, the first step is, uh, the very first thing is, is what I

do is I, when I go to see a company, a firm who's struggling, the first

thing we do is we do a value audit.

So that is, you basically, you need to look at all the ways that you can

reduce risk, the ways that you can save time and money, and the way that

you can create certainty for clients.

So it's, again, it's, it's about communication.

It's about being transparent.

That's the very first thing you do.

Then the second thing you need to do is you have to know your numbers.

I mean, you just have to, it's, it's a tedious thing and you know, we

don't like it talking about it a lot, but you have to know your numbers.

So that means calculate an effective hourly rate.

Yeah.

Base it on recent projects, so, you know, see what, what came

in, how, how much did it cost?

What were the overheads, et cetera, et cetera.

You know, what actually do you need to make a profit.

And then you set that target rate and you make sure that it covers

your overheads, it covers your salary goals, and your profit.

Never forget the profit.

And always be very clear about profit.

Uh, then the second thing is, is the actual proposals.

The fee proposals I like to tier them, so I like have service tiers.

So you have a basic offer, a standard offer, and a premium offer.

And in each of those tiers, you, you identify the deliverables

as well as the boundaries.

And that way it's very clear to the client what they're going to get for their money

instead of just having one fee proposal.

Um, and, you know, and just sort of list work stages, the RIB work

stages of things, you know, it becomes much, much easier for the

client to understand the value.

You.

And then what I also like to say is that when you are writing your proposals,

you need to communicate the outcome.

It's, it's very much about the transformation or, the value that

you're gonna be giving to your client, not the hours you're gonna

need to do it, this sort of thing.

So it's important to, you know, to emphasize things like their, their return

on investment or the risk reduction.

Or just, just to give them decision clarity really.

And then the last step I like to do is is really, it's a bit drastic,

but I always say, look, just, just raise your fees straight away.

Just take the next proposal and just add 10 to 15% on it.

And what I've found is, is most clients, they, you know, they're

not, um, it's not about price.

If you, if when the value is clear, they're much less price sensitive.

So it can be quite nerve wracking for, for, for young architects to do that.

But in my, uh, in my experience, like I said, once the value's clear, the

clients are a lot less price sensitive.

So, so those were the other things that I would sort of encourage young

architects who are starting out.

That's what I'd encourage them to do.

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Now let's get back to the show.

Mm. I love that.

So, just to recap then, so the first thing was there was a value audit.

Um.

That was getting clear on your numbers, understanding what you need to charge

within your practice, and that was looking at things like hourly rate, wasn't it,

sort of determining what rates should be being charged to cover everything.

So we're talking like over standing overheads, uh, payroll profit as well.

Actually building that in as well so that we are aiming to make a profit.

Um, otherwise, you know.

Why are we bothering?

Exactly.

Um,

and then you mentioned about having tiered service options.

I love this idea.

This is, um, I suppose it's like the sort of classic like bronze, silver, gold

or like, whatever you want to call it.

But the thing I like about it is it, it gives their client.

It gives them control of the decision making.

And it doesn't it doesn't back them into a corner where if you send a proposal

and they read it and think, well actually this isn't quite what we are looking for.

Like we were maybe wanting more support than is being offered or less support

that you are actually giving that that autonomy and control to your

client to put them in the driving seat to make that decision and also.

Just present those different ways that you could work with them.

I think it, it's also more professional, it's just more

professional, a lot of people when they see architect's fees are a bit, a bit

surprised, let's say, you know, they're a bit surprised at the at, at the amount.

So if you can break that to that amount down and give them a choice, you know,

they don't have to have everything.

You know, they can, they don't have to go with the premium, they can

just go with a standard or they can just go with the basic, but they,

you know, there is a service there.

And.

We can meet the budget, their budget, it just gives the clients

more confidence, I think personally.

It's certainly been, in my experience,

Yeah.

That's so true.

I do like that approach.

I'm quite a fan of having, tiered options and, and sort of, um,

a menu of service packages.

I do very much like that approach.

Just going back to the fees, 'cause I, it might have been, when we talked previously

about having conversations about fees, that was under the thing that I think.

We talked about previously about having like, rehearsing some

of those fee conversations.

'cause you mentioned that often that is something that, people are uncomfortable

to do to have sales conversations.

'cause we don't get trained how to do sales at university or college

where wherever you got your education it isn't something that's usually

taught as part of an architecture degree or that sort of thing.

no, exactly.

And the thing with sales is, you know, there we're all

different, some people are just.

More charismatic.

You know, some people, uh, can articulate themselves better

and this, that, whatever.

But the thing with sales is, uh, it's a process.

You know, there's a if you listen to sales calls, if you listen to salespeople,

they're going through a process.

They're not just winging it.

There's an absolute process.

And once you know the processes and you're confident with the processes,

then you, you know, you're not gonna be afraid to address objections.

You're not gonna be afraid.

You know, to really articulate your value in a, in a confident way.

And I think that's what a lot of people misunderstand or mis or

just aren't aware of with sales.

It is a process and you can learn the process.

Um, and that's why I always ask my clients, to, it's like a, it's, it's

basically role playing, you know, so one plays the client, one plays the

architect and you literally practice the scripts and you go through the processes.

Um.

And, uh, you just become more and more comfortable with it, basically

That'd make a great podcast.

Sure.

Add that to the, uh, the ideas bank.

William, do you have a story or an example of a firm that

has had success by implementing these steps in their practice?

Yeah.

Yeah.

I mean the one that comes to mind is a small practice I, I worked with recently

in, we were based in London and their main focus was on, on extensions.

And they were basically, they were very busy.

They had very thin margins, working long hours and often

were suffering with scope creep.

So sort of the classics.

Uh, so what we did, the first thing we did was we did a value audit.

So we looked at, you know, we looked at their projects, we looked at where

there could be risks, we looked at, um, you know, where, where we could

save time, all those sort of things.

Once we'd done that, we then we looked at the, at the fee

proposals that they were doing.

And we changed those, um, to be more outcome based.

Um, we all, so we introduced, uh, the three tier service packages.

So we had a basic service, uh, a standard service and, and a premium service.

And we also implemented scoping templates.

So that's basically literally just, you know, for each tier there's a scope.

Um, yeah, basically a scope for each tier.

And there's a little, you know, there's just a little checklist and we just make

sure that those templates are followed.

And then what we also did was if there were any changes come along, we made

sure that we had a very simple, uh, change order process in place as well.

And then what I asked them to do, which they were very, very

nervous about at the beginning.

I said, look, just increase your fees by 20% on all the new proposals.

Just do it.

Don't think about it, just do it and let's just see what happens.

And then what we did, uh, which led very nicely into them, practicing fee

conversations and object handling.

So that was this, this role play basically, and this, this, just this,

this learning the process of sales.

So I met up with him about three months later.

Um, and we had a little chat and, um, it was interesting.

Well, it was very positive because what they did tell me was that they,

they hadn't lost any conversion rate despite the 20% fee, fee increase.

And also their clients, they noticed that their clients were

now, they were much more serious.

And, and they were, they were clearer and they had higher budgets.

And I think, I think a lot of that's what I was saying earlier.

It just, you know.

If your fee proposal is more outcome based, you just, you just come

over more, more professional, more competent, et cetera, et cetera.

And I think that's a direct result of that.

Um, they also reduced their unbuild extras, um, through these change orders.

And what they both also said to me was, it was a couple, they both

said that they are, they're working fewer evenings and they're working,

not working any more weekends.

Um, and that their, they're predictable, their cashflow is much more predictable.

When they price for value and they enforce their scopes, they don't,

they didn't lose any clients.

All they lost all was chaos.

And, and one clarity basically.

So, yeah, it was a

it was a a very, you know, it's a positive outcome with making small changes.

That sounds, uh, sounds absolutely fantastic and something

that they were able to, to put in place and start seeing those benefits

in a relatively short timeframe

as well.

So, um.

yeah,

This stuffer, you're able to go in, help them out.

They were able to implement this and then they started getting those

results pretty much straight away.

So, um, yeah, absolutely fantastic.

Really, what would be the main thing that you would like everyone to take

away from the conversation today?

good question.

I think, I think the biggest thing to, I would like to say is that look.

You don't have a pricing problem, right?

You've got a value communication and boundary problem.

If you charge and if you charge for the real outcome.

Yeah.

And you deliver and you protect it with clear scope and change orders

and measure your weekly KPIs, then profitability becomes a habit.

Yeah.

So articulate the value, you price for it, and you protect it and

review your numbers every week.

It's so important.

It's so important to track data.

So keep reviewing, keep tweaking, um, and just keep articulating your value.

You're worth it.

You really are.

Oh, I love that.

Was there anything else that you wanted to add that we, we haven't already covered?

I think the thing is just start, right.

I always say it, start with imperfect action.

You know, just, just start and, and, and try.

So I would, you know, just pick one live proposal and raise the fee

or, or just pick a, pick one active project and issue a change order.

Yeah.

For anything, any work that's out of scope.

But one thing I would say is, you know, just I've, I've already

mentioned it, but I'll say it again.

It's just the importance of tracking, tracking your data, keeping on top of it.

Those are the things that, the biggest three things that I would, I would,

I would suggest to anybody now.

There's one other thing that I would like to ask you, and I asked this.

Question to all of the guests.

And it's not about the topic, but I love to travel and to discover new

places, and I was wondering if you could share one of your favorite

places and what you love about it.

Somewhere I've actually been to or somewhere I'd like to go.

Oh, that's a good question.

Well, it, it could be either, usually it's somewhere that people have been to before.

Okay.

But I'll let, I'll let you, I'll let you have two here if you want.

You can tell us the favorite place that you've been and like where's

number one on your bucket list that you haven't yet been, if you want

though.

Sure.

Well, the favorite, one of my favorite places I went many

years ago was, was the Maldives.

And I went there.

As, uh, I think I just finished college or something.

It was very, it was long, long time ago.

And we uh, we did a scuba diving course.

I learned to scuba dive there and, um, it was the most beautiful place in the world.

It was, you know, you see these postcards and it actually looks exactly like that.

It really was just absolutely stunning and obviously the.

Doing the scuba diving, you this sort of, this, this water world down.

You know, it, it really was quite fascinating.

And then I met a, I met a client, which is why I asked if you'd

like, where I'd like to go.

Um, and he was a, he, this client, he was a, he had a diving school

in, uh, in the Philippines and we obviously talked about it.

And, uh, he told me, I told him about the mold dives and how great it was,

and he just basically said, now you've gotta go to the Philippines because, uh.

It's even better there.

So, uh, that would be, that's the one that's on my bucket list to go.

So scuba diving in the Philippines on the, is the bucket list and uh, the mold eyes

is the one that I've already ticked off.

Yeah, yeah,

definitely.

that sounds awesome.

Can I come too?

Um, I, um, I have done scuba diving in the past.

I haven't done it for a few years now, but I love it.

Yeah, I did.

Um, when I was sort of backpacking in my twenties, I learned to

scuba dive and then like did it in various kind of places all over.

Um, um, yeah, it's just, it's like of the world, isn't it?

Like you say,

hun.

It's amazing.

And the, the, the great thing is it doesn't matter what the weather's like.

Yeah.

So if it's cloudy or rainy, it doesn't matter when you're underwater.

That was always, uh, that was the one that always used to tickle me.

You'd come up and it was pouring with rain and you're like, oh, doesn't matter.

Doesn't matter.

Absolutely Brilliant.

William, thank you so much for being a guest on the show.

I really do appreciate it.

Thank you for, for sharing your expertise.

Could you just remind everyone the best place to connect with you online?

Yeah, well I have a website williamringsdorf.com.

That's where you can find me.

And drop me a line or you can just email me direct, which is,

uh, info@williamringsdorf.com.

And, um, as you mentioned at the beginning of the, uh, of our chat, we,

I have a, a free book, which I'm giving away, um, which you can get if you go to

Williamringsdorf.com/profitdrainingmistakes rather a long one, but, uh,

it's, as I say, it's free.

Um, and yeah, we just covered one of the topics today and

there's another four in the book.

So, um, yeah, everyone, everyone's more than welcome

to grab themselves a free copy.

Yeah, I have read the ebook and it's a really great resource,

so I'll pop a link in the show notes.

Um, just click the link and head over to that URL and you'll be able to

grab a copy for no charge whatsoever.

So, uh, William, thank you again.

It's been a pleasure.

Thank you very much, John.

Nice to meet you.

Thanks so much for listening to this episode

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