Design Costs

Discussion in 'Boat Design' started by Guest, Dec 12, 2003.

  1. Guest

    Guest Guest

    After reviewing most of the stock plans available, it appears that I may need to go the custom design route for a 25' cruising sailboat. The boat itself wouldn't be real involved or constructed of any exotic materials (fiberglass composite). However, I have received design quotes that range from $3,000.00 to $28,000.00. This price includes everything needed by the builder to construct the boat. I have seen a few articles that say design fees normally run 10 to 15% of the cost to build. A few others based on cost per displacement pound. What is a real world number here?
     
  2. Eric Sponberg
    Joined: Dec 2001
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    Eric Sponberg Senior Member

    Generally, you get what you pay for. The higher the price, the more detail you get on drawings and in the engineering to build the boat. You may even get Mylar patterns to build the hull and deck.

    The old rules of thumb like 10-15% of the cost to build and cost per pound of displacement really mean absolutely nothing. This is because your cost to build the boat may be very different from someone else's cost to build. There is no way to base a design fee on cost of building. Same for displacement. It is really easy to make a boat heavy, but it is very hard to make a boat light. Building light requires more engineering and design time, therefore a higher design fee and a higher cost per pound. So again, there is no way to base a design cost on displacement.

    Naval architects and designers do their work to make a living. They have overhead expenses, and they have to eat. Therefore, prices can be high. The only thing you can do is establish a budget for what you want to spend both on design and on construction. Then talk to some designers to get an estimate of what they will give you in technical detail for the amount of money you would be paying them. Some design fees will be high, and some will be low, as you have found. Pick the designer who fits your budget and will give you the sort of technical detail that you will need. Expect to pay for the design in progress payments, beginning with an initial fee to get started, and progress payments that carry through the design process, finishing with the final payment on delivery of the last docoments.

    Ideally, the design should be complete before construction begins, but this rarely happens. Owners typically are in a hurry for their boats, so construction begins halfway through the design process, and the designer sometimes has to play catch-up to the builder. This should not happen, but it is a result of poor planning usually with the owner but sometime also with the designer.

    Also, be aware that the drawings that the designer creates for you remain the property of the designer unless you strike a deal with him or her to obtain ownership of the documents. Commissioning a designer to design a boat is exactly like commissioning an author to write a book. The rights to the art belong to the creator, not the commissioner.

    Also, by virtue of the commission, you the owner are obtaining the right to build one boat only. If you want to build more than one boat, then you have to pay the designer a royalty on every other boat exactly the way a publisher pays an author a royalty for a book. Royalties generally amount to 0.5% to 1.5% of the cost to build the boat, with the middle part of that range being the most common. These royalties are in addition to the design fee. By comparison, and author gets anywhere from 10-15% of the cost of the book, and the advance that an author gets is charged against the initial royalties. I think the recording industry works the same way as the publishing industry.

    So, in a nutshell, find a designer you like and who is affordable, and work with him or her on the price and the amount of design detail that you need.

    Good luck.

    Eric W. Sponberg
    Naval Architect, PE
    www.sponbergyachtdesign.com
     
  3. mmd
    Joined: Mar 2002
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    mmd Senior Member

    The cost of the design is not too exorbitant, the real money starts to flow when the designer begins to do all the detailed construction drawings and engineering calculations for the builder. Presuming that the dollar values you are quoting are US dollars, I'd say that the $3,000 price - for the design of the boat only - is fair, if maybe a wee bit low. This would include linesplan, general arrangement, sail plan, weights & centres calcs, stability calcs, strength calcs, scantlings specs, and resistance & powering calcs, plus a design brief explaining all the decisions made and construction methods specified.

    If the builder is not familiar with the construction details specified or inexperienced with the type of construction, the designer has to create quite a few detail drawings to explain the situation to the builder, and this can become expensive. If the builder is familiar with the method of construction and details the designer can cover a lot of information with few drawings and notes - a sort of technical shorthand - and the time and fees go down accordingly. The ideal situation is one where the designer and builder have a history of doing projects together and are in reasonable proximity to each other, so that the designer's time is minimal during the construction phase, but problems that arise (they always do) can be dealt with quickly by a phone call or a brief visit to the yard.

    I have difficulty with the design costs being based on a per- displacement pound value; it doesn't reflect the relative complexity of the vessel (e.g., a 42-ft Grand Banks trawler with complex electrical and outfit systems may displace the same mass as a 60-ft stripped out racing sail boat, but the detailed design work is vastly different) when applied to a broad range of vessel types. A "rule of thumb" of design cost as a percentage of construction cost is, IMO, more accurate, assuming the building costs are at professional labour rates (not home-build). In this scenario, I would put forward that the basic design will be about 5% of the total construction cost and a full design/construction drawings package would be about 12% of the construction cost.
     
  4. 8knots
    Joined: Feb 2002
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    Location: Wasilla Alaska

    8knots A little on the slow side

    GOOD POSTS

    I hope this thread keeps popping up from time to time. I'm sure this question has been asked a million times. Thanks to the real designers who participate here and help us doodlers out. I am very thankfull for the secrets you all have disclosed!
    Eric I hope you make a million..... Your Molokai is a fine vessel! I have poured over the write-up done in PMM several times and your web site on the vessel is a joy to behold. I want a bulb on my Dreadnought 48 and dread the fabrication but i'm glad you did not just stuff a pipe on her nose. I think a hull should look just as sexy below as above the WL. It all stems back to that "you get what you pay for"
    Keep em sharp
    8Knots
     
  5. Guest

    Guest Guest

    Mr. Sponberg:

    Thanks for your reply. Your design of Project Amazon has always been a favorite and I visit your website monthly just to view the pictures.

    I am looking for a simple cruising sailboat in the 25 to 28' range that can be easily trailered and launched. She doesn't need to be a speed demon nor constructed to cross the Atlantic. So what are my choices? A Hunter, Catalina or Macgregor.

    Neither of these are personally appealing. So I started searching the web for stock plans. You end up with Dix, Glen-L and Roberts. Not much here either.

    From brief discussions with a couple of builders and doing some rudimentary estimating, it appears a one off boat can be built pretty cost effectively when using a product such as Durakore or Core-Cell.

    The problem is the whole project goes down the tubes when you have to layer another $30,000.00 in design fees on top of construction costs.

    Don't get me wrong. I am also a self-employed professional and I would be the last person to deny an individual fair remuneration for their services.

    It could very well be there is no market for what I am seeking. Or a project of this size isn't cost effective in the first place.
     
  6. Guest

    Guest Guest

    mmd:

    Thanks for replying to my post. It was very informative.

    I think your estimate for "design only" is reasonable and fits
    within the final budget of the boat.

    Could you advise what percentage of the "full design package" is professional fees and what is materials?

    Thanks.
     
  7. 8knots
    Joined: Feb 2002
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    Location: Wasilla Alaska

    8knots A little on the slow side

    Sorry Guest.... I did not mean to hijack your thread I was just excited over the great response to your question. I have wondered the same myself. I am sorry I have no info to give you!
    I agree with MMD on the benefits of having your designer near by
    a visit now and again would be a great asset to the construction process
    Good luck with your boat
    8Knots
     
  8. gonzo
    Joined: Aug 2002
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    gonzo Senior Member

    Have you looked at books that publish lines of workboats. Authors like Chapelle have fairly well detailed lines from which a boat can be easily built by anyone with experience. Workboats have the advantage of avoiding exotic materials and building techniques. Also, they are usually cheaper to build than a yacht or boats designed to a formula.
     
  9. Eric Sponberg
    Joined: Dec 2001
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    Location: On board Corroboree

    Eric Sponberg Senior Member

    To Guest and 8knots,

    Thank you for your compliments. One always likes to hear when he is doing a good job.

    There are a few reasons why you don't see such a wide variety of boat plans available in the stock plans arena. One is that when we design for custom or production builders, they pay extra for exclusivity or for ownership of the package. So we are not at liberty to release the plans to the public.

    Also, small boats, say less than 35 feet LOA, still take a fair amount of time to fully design, engineer, and document, on the order of at least a few months of work. Once completed, they have to be advertised, which, beyond a designer's own website, usually costs some money out of pocket. So let's say a 28'er costs the designer the $28,000 in time that was quoted, how many sets of plans can you sell to recoup that cost? Affordable prices to the do-it-yourself public are less than $500. So $28,000 divided by $500 is 56 sets of plans. The designer will be extremely lucky to sell 5 sets. So stock plan work simply doesn't pay. Also, one has to remember that most people are dreamers, and all they really want is a study plan package which would include the outboard profile, deck plan, and general arrangement plans. And if they buy a full plan package, chances are very high that the boat may get started in construction, but will never see the water. One hates to think that he might have a lot of unfinished boats sitting in backyards out there.

    Typically, a single drawing costs roughly $1,500 to $3,000 in time to produce, depending on the designer. This includes the engineering time to figure out how the boat should be built. Usually, all the money goes for design time, there are no materials to account for. The cost of paper and printing is tiny compared to the effort needed to create the drawing in the first place. The only time I take into account the cost of materials is when I am plotting full-size patterns on Mylar--then you run into a little money for the Mylar and the plotter ink (those ink cartridges are expensive!).

    For example, on my design Bagatelle, a 44' lightweight sloop, I charge $3,000 for the design package because besides the construction plans, it includes three sets of full-size Mylar patterns for the hull and deck lines and bulkheads, the keel and bulb, and the rudder. I have been paid for the design, but how many sets of plans have I sold? Zero--zip--nada! It is kind of a specialty boat, so I am not expecting to sell too many. that is why I always get my design fees up front.

    By comparison, I also have the Delft 25 which is a neat little sloop designed for wood-epoxy construction in plywood. In the 13 years that it has been on the market, with fantastic reviews in the press and a whole WoodenBoat magazine article devoted to it, I have sold only 6 sets of plans at $200 each. That does not come anywhere near covering me for my design time--hardly covers a month's worth of expenses to run the office. And that package is so much cheaper by comparison to Bagatelle because there are 11 drawings, all done by hand, and no Mylar patterns.

    A basic plan set includes the general arrangement plans, outboard profile and deck plan, and maybe a one or two construction plans that show what the basic mode of construction is supposed to be. These are usually done for the owner so that he can see how his dream boat is developing, and to prepare a specification for construction on which builders may bid. The initial design fee may or may not include a 3-D model of the hull shape (either a surface or solid model) but that won't be printed on any plans. So there has to be enough detail there to quote on materials and labor, and to get some indication of hydrostatics and stability. The full design package will include all the construction plans, showing details on how to build the primary structure. I don't get into details of the joiner work beyond the general arrangements--the builders do that. I also don't get too involved in systems myself. If electrical plans are required, I will usually hire an electrical engineer to produce those (and so that costs me money, which is covered by the owner). I will also produce plumbing schematics, if desired, but I leave the actual distribution drawings for plumbing and electrical systems to the builder.

    The only way to really make money in the stock plans business is to do it like Glen-L: specialize in just that--collect a lot of designs that don't require too much paper to print and sell, and just pump them out the door. I would bet that Glen-L survives on selling lots of preliminary sets of plans and their catalogs, and occasionally a full set of construction plans that require very little to no technical back-up to the buyer. They are simple boats and the variety is not very great and they are not necessarily the most modern, up to date designs. To expand into more modern boats is expensive, and the market is simply too small to fill it.

    I hope that gives a little more insight into the design process. Thanks again for your compliments.

    Eric Sponberg
     
  10. mmd
    Joined: Mar 2002
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    Location: Bridgewater NS Canada

    mmd Senior Member

    Thanks for the erudite explanation, Eric. I, too, run into the problem of trying to explain to well-intentioned folk that for custom designs - even of smallish boats - the design effort is large and therefore expensive. Most find it amazing when I tell them that drawings cost around two thousand dollars per sheet; I'm glad someone else has indicated that price.

    I have been following the development of the "Molokai Strait" project, too. Nice balance between offshore tough and marina elegance. Kudos to you.
     
  11. Guest

    Guest Guest

    Mr. Sponberg:

    Again, thanks for your reply.

    I am in my early forties. Therefore, I grew up during the heyday of the sailboat industry. The seventies and eighties had so much product to choose from and attending a boat show like Newport each year was truly an event. It is astounding to see the contrast from then to today.

    I do not live on a coast so I am forced into the under 30' sailboat market. It is an interesting segment as most of the production boats disappeared by the early 1980's. All that remains today are offerings from Catalina, Hunter and Macgregor.

    Sport boats aside, this has always been what I have thought to be the entry point for first time buyers. It is no wonder that participation in the sport has declined so dramatically when you look at the choices this group faces today. They either buy a used hull that is closing in on 20 years old or purchase a new Macgregor 26 for $20,000 or a Catalina 270 which now runs over $70,000.

    I am not a dreamer or tire kicker. I do not have the skills or the desire to be a backyard builder. I am just a guy who grew up in Newport, R.I. and is now stuck in the middle of the country looking to buy or build a decent sailboat.

    I will concede that the majority of folks out there are in fact dreamers and tire kickers. But it is interesting to see the amount and type of activity the thread regarding the Russian pocket cruiser design is generating.

    The Hobie 33 is back in production and retails for $55,000 plus sails and trailer. 20% of that price is probably builder profit and another 15 to 20% is dealer profit. Let's say the construction cost of a modest 28 footer in DuraKore runs $55,000.00 plus design fees. Based on mmd's estimate; we would be somewhere in the ballpark of $10,000.00. Where does $28,000.00 or a figure remotely close to it come in to play?

    This process would be much easier for me to understand if we were looking at remuneration based on an hourly rate and the # of hours to complete. How many hours does it take to to design what I have described? $28,000.00 in billings based on $70.00 per hour is 400 hours.

    Please do not misconstrue my post. I am not trying to be argumentative or insulting. Just the opposite. I want the right boat and am willing to pay a reasonable premium to have it designed and built. However, I am still a consumer. If I am faced with the decison of purchasing a new Hobie 33 for $55,000.00 and designing and building a similar boat 5' shorter in length for $83,000.00, then the choice is a pretty simple one to make.
     
  12. gonzo
    Joined: Aug 2002
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    gonzo Senior Member

    How much detail do you need? A set of lines is fairly cheap. Construction and interior details can run many times the amount of labor. I think it is wise to ask what you are getting for your money. However, if you don't specify what you want, it is impossible to give you a price.
     
  13. Eric Sponberg
    Joined: Dec 2001
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    Eric Sponberg Senior Member

    I have no excuses for the supply and demand of the market. It is what it is--there are fewer choices in boats (although still many) and the prices are higher. It is just the nature of the business.

    As for rates, $70/hr is just a little more than what car mechanics get, and desginers are usually a little more cerebral than car mechanics, so we attract a higher fee. By the way, I really appreciate the car mechanics that keep my cars running smoothly, so I think they deserve the pay they get.

    The consultants that I hire, when necessary, I pay about $50-$80 per hour, depending on the nature of the task, whether it is simply drafting (lower) to engineering (higher). My fees are pretty average at $100 per hour, and I could easily justify $120 per if I wanted. $28,000 at $100 per hour gets gets you to 280 hours. On a recent 37' sailboat design, we reached 220 hours at the end of the preliminary design--just the 3D hull shape and sail plan. No interior plans, no construction plans yet. We could have done it for perhaps half that, say 100 hours, but the owner was pretty demanding on the overall design, and he changed his mind a lot. We are paid straight time on that job, to whatever the time accummulates. The owner understands that and can afford it.

    Like I said at the beginning, you get what you pay for, generally. The higher the price, the more detail you get. I personally think that most plans sets for boats offer precious little construction detail. They usually entail a sailplan, a lines plan, a general arrangement plan, and a construction plan, with no details on the keel or rudder construction, the engine and shafting installation, and all manner of other construction details. Also, there is no weight estimate, no hydrostatics and stability calculations, and no full-size patterns. The less detail, the more trouble the builder will get into. With more detail, you also get the hydrostatics and stability calculations, all of the structure is engineered, all the major construction details are drawn, and all the hardware is specified. Plus you get a full detailed weight estimate. You also get full-size Mylar patterns for the hull, deck, bulkheads, keel (including ballast bulb if necessary), and the rudder. You need all this stuff to make sure the boat floats where it should, is stable and safe enough, and will perform as intended, and is clearly detailed so that it is easy to build. It is a lot of work, and that is why the design costs run the way they do.

    And this is also why you don't see too many small custom boats--the prices are disproportionately higher. The cost of construction goes up with the cube of the length, so larger boat projects can absorb the design fees more easily. You would also think that the reverse is true, but it is not at the lower limit. The design process, detail and time wise, for a 28'er is nearly the same as for a 38'er. You have to do just about the same amount of work, the few extra feet of length does not add that much more detail to the design. So prices are higher for small boats.

    I make no appologies for my fees as I seem to attract enough work to keep me pretty busy. Other designers will be different, some cheaper, some more expensive. That is why it is hard to make generalizations, and also why you have to work with a designer whom you like. Get him to discuss in detail what he can offer you, compare that against what you need, and make the choice. It takes time, but in the end, you get exactly the boat that you want.

    Eric
     
  14. gonzo
    Joined: Aug 2002
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    gonzo Senior Member

    Getting a builder/designer can be a cheaper way for a small boat. Many boatbuilders have a series of boats which they have already build and can do so again without charging for a new design.
     

  15. trouty

    trouty Guest

    I've a question

    I hope it don't get me into strife. :D

    I'm not a great blow boat fan, BUT - take a example of say the Australian contender for the America's cup some years back...

    Not Ben Lexans Winged keel Australia 11 - but the later one - the one that embarrassingly spit in the middle - folded up like a napkin and sank during the race...:rolleyes: :eek:

    Now WHO designed thatta one???

    One can only assume, that this beauty would have been a case of the highly engineered, to build light, racing 12 meter yacht at the cutting edge of technology...

    So - what went wrong?

    I guess what I'm saying is that a leading edge 12Meter like that - i doubt you get for 28K or 30K in design fees - I'm assuming it runs to the many hunders of thousands of $ in design fees...

    So my question is - when the design fails like that "spectacularly"....and in great public view - does the designer give the owner back his design fees as a show of good faith??

    Or does the builder wear the responsibility?... like - "hey he musta stuffed up in the construction process.." wityh everyone pointing fingers in all directions?

    I mean - it's much like that in the housing game - the Architect designs the house - the builder builds it as designed and when it collapses the buillders held responsible... :rolleyes:

    So what happens with naval architecture, when it all goes to crap and a design fails for whatever reason?

    Say it was a mamoth project like Greg Normans yacht....sailin a long and bingo - snapperroooney we go, & davey jones locker here we come - can the owner sue the Naval architect for a hull failure and recoup his design and construction costs?

    Do we hold Naval Architects "responsible" after the fact for their designs?

    I mean did the designer of the Titanic ever design another boat?

    What warranty is express or implied in the design from the purchasers point of view?

    Lets take a real world example...

    Lets say.....

    A working guy gets a boat designed by a reputable N A with a history of producing great designs and the usual builder builds it.

    Lets say this boats relatively "new" in that it encompasses some unusual design concepts such as surface drives etc...

    And initially it's looking pretty good - top speeds great at sea trials etc...but the engine suppliers not happy - not achieving high enough RPM's, the engines "lugging" with the recommended props....so - smaller dia or lesser pitch props are tried...and away she goes - now the engine manufacturer is happy chappie...

    BUT - the owners now not so happy because the fishing seasons just started, hes loaded up with his gear ready to go deploy it on day 1 and she won't plane with the full load...as she was supposed to be designed to do...

    The small props are slipping - bigger ones will work but will overload the engines...

    What to do?

    Who's at fault?

    Hows the guy get to work - lets say he's out best part of a Million bucks for a new boat that just won't damnwell work right...

    Who ante's up and makes it right with a $million for a new boat or spends the $ to upgrade the engine / gear box ratio's or props (for the 3rd try at $40 grand a pair)...to make the damn thing get up n boogie with a full load...

    At what point does the designers responsibility stop - and at what point do they throw up their hands and say -"it was me, I phukked up and 'm gonna make it right with a $Million from my insurer to design and construct a replacement vessel?"

    Who pays for the lost catch while waiting for solutions?

    Do we really GET what we pay for in Naval Architects, when it all goes sour...or does that only aply when everything goes great.

    Any Naval Archotects here care to own up to any boat they ever designed athat was a dud?

    Just curious - I mean Doctors can bury their mistakes - can Naval Architects sink theirs or swim away from them?

    How does it work when you get to that state of play in the games big boys play?...do dissatisfied owners get the mafia to take out hit contracts of naval architects who don't quite deliver the goods?

    C'mon you guys, you must have some stories to tell, theres more to this game than we are hearing - time to spill the beans and tell us ALL about the ones that floated - upside down! :D ;)

    We ALL have a skelleton in the Closet - even naval architects - so it's fess up[ time fella's, cards on the table...whos goofed and prepared to spill the beans? :p

    The great thing from my point of view, is that often times in the game - you'll find out al kinds of stuff others might prefer you didn't. ;)

    This'll be interesting!

    Cheers!
     
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