The hidden $25k in your firm

“Profitability is influenced by client expectations as much as by staff productivity.” This according to an excellent AIA reportfor firm leaders. One surprising place where firms are falling short on productivity and possibly client expectations is with their 3D rendering process. Here’s a look at the numbers (based on current averages) of cost to produce renderings in-house:

• Entry-level intern (non-licensed) salary = $36,000/year
• Intern spends 40 hours to complete one presentation-quality rendering and model
• Intern completes 1.5 renderings per month, totaling 720 hours annually
• Intern actual cost to firm is $40/hour, billing rate is $75/hour, for profit of $35/hour
• Rendering time for intern costs firm $25,200/year in overhead (720 x 35)

Beyond the numbers, note the other impacts of doing renderings in-house.

• Interns have less time to develop design and technical skills under the direction of their manager.
• Interns may not have the skills or architectural experience to produce rendering quality comparable to an external vendor.
• Managers may not critique in-house renderings as closely as an external vendor.

Overhead expenses are inevitable and necessary to keep firms in operation. But why not outsource overhead expenses that can be completed more efficiently by someone else? Giving your production staff more time for billable work will have direct impact on your bottom line.