EXHIBIT-DESIGN COST STRUCTURES
 Three exhibit houses recently responded to my RFP for a new booth. However, when it comes to exhibit-design fees, their cost structures are all over the board. Does everyone figure design costs differently, or are there some typical cost structures I can request to make an apples-to-apples comparison easier?
 While each exhibit house has its own way of doing business, there are five cost structures typically used to accommodate exhibit-design fees: free design, flat rate, cost plus, hourly rate, and percentage of build.
You can stipulate your preferred option in your RFP; however, many firms are stuck in their ways and may simply ignore your request. Nevertheless, here’s a quick explanation of each cost structure to help you decide which option is best for you — and to help you decipher whatever comes your way in the end.
Free Design — Don’t get confused. Exhibit design is never free. However, in a free-design cost structure, design costs aren’t listed as a line item in the total budget of the exhibit. Rather, these costs are either a) spread out or recouped in several other line items in the quote but not listed individually, or b) absorbed in the supplier’s overhead costs of doing business so that design doesn’t show up in a line item. So if “design” isn’t somehow listed in the cost breakdown, it’s covered indirectly in another part of the budget.
Flat Rate — With this type of cost structure, design is listed as a single fee in the budget, and expectations and costs for creative services are defined up front. Once work on your project has begun, the design rate does not change unless the scope of work changes (i.e. the size or basic parameters of the exhibit change significantly), and the exhibit house is contracted to deliver on the agreed-upon price, regardless of how long it takes to complete the project.
While the black-and-white nature of this type of structure is certainly appealing, it has its drawbacks for both sides of the equation. To calculate a design fee that’s fair to both parties, you need a clear understanding of the scope of work, which is difficult if not impossible to obtain at the RFP stage. Thus, this flat rate may be dead on in terms of the creative hours and talents required in the actual project, or it may be grossly over- or under-estimated, financially hurting one or both parties. To increase the accuracy of a flat rate, consider asking the designer to draft a creative brief, outlining the scope of work, deadlines, creative strategies, and processes or steps in the process. That way, you both know exactly what’s included in this all-encompassing price.
Cost Plus — A cost-plus rate uses a flat rate, plus hourly charges for changes and revisions after a certain deliverable is met. So the design rate remains the same unless the scope of work changes significantly. But a cost-plus rate uses a flat rate up to the first deliverable (ideally a rendering of a completed concept) and includes a specific number of revisions. After this point, the design rate for revisions is billed at an agreed-upon hourly rate.
For example, your contract might list a flat design rate of $7,500 for all creative processes leading up to the rendering and including two revisions. Once you’ve made two revisions to the proposed concept, any work completed thereafter is billed hourly.
Hourly Rate — This one is almost self explanatory, as the client pays an hourly rate for all creative processes throughout the design phase. While this sounds like a cut-and-dried structure, these “creative processes” aren’t often clearly defined, and costs can accumulate quickly. Often, clients are paying for designers’ downtime, non-productive work cycles, smoke breaks, and other inefficient work habits.
Whenever possible, get your exhibit house to commit to a fairly tight estimate of the number of design hours required to complete your project.
Percentage of Build — With this method, design costs are billed as a percentage of the entire cost to build the exhibit. For example, let’s say your exhibit house’s design costs are listed as 6 percent of the total cost to build. So if the entire exhibit will cost $50,000, your design fees are $3,000, which is included in the overall bill of $50,000. In a sense, this cost structure is little more than a flat rate, only your design fees are calculated using the final budget and industry averages.
Each cost structure has its pros and cons, which vary significantly depending on your situation. In fact, if you run your program’s numbers using each of the five methods, your design fees can vary widely between methods, or practically remain the same. However, by understanding each option, you can work with your vendor to define expectations and costs up front — and to develop a healthy working relationship in which costs and deliverables are fair to both clients and exhibit designers.
— Bill Roozee, principal of Billy Raygun Design Inc., Flower Mound, TX; Michael Peterson, freelance exhibit designer, Arlington, TX
POWER REQUIREMENTS
I can’t tell an amp from a volt, but I need to place an electrical order for my exhibit. How much power should I order to keep my audiovisual equipment running?
Your exhibit supplier or AV vendor should be able to supply you with specific requirements for each piece of equipment. However, if you don’t have access to suppliers or vendors, you can use these rough estimates for some of the most common types of exhibit equipment.
 TV — 40 to 60 watts
Sound System — 50 to 100 watts
Desktop Computer — 400 watts
Laptop Computer — 50 watts
Fax Machine — 60 watts
LCD Projector — 300 watts
DVD Player — 50 watts
50-inch Plasma — 500 watts
It’s always better to order a little more electricity than you’ll need just to be sure, as you don’t want to push your capabilities to the limit and risk blowing a breaker and blacking out your booth. Also, start a running list of your devices’ electrical requirements for future reference, adding exact requirements for any new items added to your exhibit arsenal along the way.
— Jeff Kidd, vice president of BrightPipe, Atlanta
OUTDOOR EXHIBITING
I understand the benefits of outdoor exhibiting, but what are some of the main problems associated with it?
The most obvious potential outdoor-exhibiting problem is the weather. Rain, wind, hail, and extreme heat can grind outdoor-exhibit traffic to a halt, while the show goes on inside the exhibit hall.
Even if Mother Nature is on your side and there is plenty of outdoor traffic, outdoor exhibiting can still be a challenge. Surrounded by other exhibitors’ large equipment and potentially noisy demos, your booth can get lost in the commotion, which not only detracts from your message but can also hinder your staff’s ability to speak with attendees or identify qualified prospects.
A lack of show services can also affect outdoor exhibitors. While readily available indoors, services such as utility hookups, electrical power, and Internet feeds are often hard to come by or difficult to access outside.
Finally, sometimes show management plays favorites. That is, some shows focus most of their promotional efforts and signage on indoor exhibitors, leaving outdoor exhibitors, well, out in the cold.
— EXHIBITOR Staff
|
