As an architect, I get requests all the time from friends, family, previous clients, etc to help them out with their little remodel, addition, or feasibility to see if they should pursue a possible project. Since I love designing things and seeing them get built, I'm always happy to help where I can. I've done some really cool small projects in the past, and it's also enlightening to see projects that can be built quickly instead of a couple year turnaround.
Although small projects are small, they are not necessarily small from a business perspective. To get to a point where the designing can actually begin, it is necessary to go through the same few steps on most all projects - regardless of the size of them. Measuring the existing building and drawing it takes the same amount of time (and expense) for a small addition as it would for a large one. It is important (and required by the building dept) to document the existing parts of a building instead of only drawing the proposed work to it. We do this work of documenting very strategically. We do not measure each and every little thing when we first start a project. This would not be prudent. At the beginning of a project, nobody really knows what the design solution will be, so it is not time well spent to measure everything in a building with 100% accuracy. In addition to taking photos and carefully filing them, we generally go around and measure the length of every door, window, and wall as quickly as possible within about an inch of accuracy. This does not account for existing walls that are not built straight, existing construction that deviates from standard practice assumptions, and any extreme level of detail which we know we will focus on anyway much later in the process IF the client decides to actually do the project. Many projects never move forward for a myriad of reasons, so it makes a ton of sense to only get a rough idea of the existing conditions and not spend too much time drawing them until everyone is certain the project will move forward. The main point here is this phase of the work to measure and draw the existing building takes the same amount of time for all projects - whether its a big project or small one, so the economy of scale gets out of whack when you proportion that time over the actual design time of a small project.
Another area where small projects share the same (large) expense as large projects is with surveys and geotechnical reports if required. In many projects, even small ones, the building department will require a survey to be completed by a licensed surveyor to document the location of the property lines, the location of the building in proximity to those property lines, and even the trees and slope of the ground. The cost of a survey or geotechnical report is the same for a small project and a large one. Consequently, this is another expense that causes the overall design fees of a small project to be out of proportion with a larger one. Even if you’re building a shed, the building department still needs to know how close to the property line it is and what percentage of the property will be covered including the shed, house, and any other items.
The process of applying for a permit is another expense that is the same for a small project and a large one. We need to fill out all the same forms, do all the same calculations, and monitor the progress of the building department's processes whether it’s a big project or small one. Again, the economy of scale is lost here when doing small projects. For some small projects, there are some abbreviated processes the building department puts into place, but this really only saves wait time and not necessarily the production time of participating in the process.
Bidding is another phase that takes architects the same amount of time on large and small projects. Once we complete our plans, we send them out to builders to get bids with specific instructions on how to provide the bid for the project. The coordination here takes the same time investment on all projects. On larger projects, a builder may have more questions, but this is somewhat negligible. Most of the questions relate to the existing building and not necessarily the proposed new parts of the project. Again, the economy of scale is lost here on small projects. It is faster, however, for a builder to provide a bid on a smaller project. The coordination time for the architect doesn’t change though.
Construction administration is the final phase that shares many of the same expenses between small projects and large projects. Sure, there are more items to review on large projects, but the time spent getting to/from a meeting, setting up a meeting, filing the notes/photos, etc are all the same time invested whether the project is large or small. (The state of Washington standard acknowledges time spent traveling 50 miles to a project site is considered a legitimate billable expense, and there is even a standard in place for longer travel.)
In conclusion, the time spent designing is really what architects get hired to do, but there's a lot of effort and due diligence required to get to that point. On a small project, there's a small amount of designing relative to the amount of other required tasks to be completed. On a large project, these other tasks get shadowed by a much more robust amount of actual design time.
When comparing the cost of design fees to the cost of construction, these facts result in a much higher percentage of design fees for a small project when compared to a large one. It is also widely accepted that renovation projects are more complicated than new construction projects and therefor have a higher fee. The state of Washington standard acknowledges that design fees for remodels carry an additional 3% of the overall cost of construction. Additionally, it is recognized that residential design work is the most complicated project type. Yes, designing homes is more complicated than schools, hospital, stadiums, and museums. Residential architecture is the brain surgery of the industry. There is simply much more detail that needs to go into a residence than is necessary in other more open and repetitive types of buildings. This website summarizes architectural fees and complexity of project types from recognized government agencies and trade organizations: http://architecturalfees.com/project-complexity/ . You will see that it is common for custom residential remodel design fees to be around 20% of the total construction cost for smaller projects, and the percentage goes down proportionally as the cost of construction gets higher.
Over the past 18 years in the architecture field, I have had 4 clients get upset with my service. They all had one thing in common: they were small projects, so they did not want to engage in the full scope of architectural services to save money (despite my warnings). When the full scope of architectural services cannot be completed, an architect cannot protect the clients' interests. Although design fees may seem high relative to the construction cost of a small project, the intention of design services is to ensure construction goes according to plan. Mess-ups in construction are much more costly than the cost of preventing them with thorough design services. Design fees are well worth the investment. Here are some additional resources that substantiate these figures:
Home Advisor (scroll down to "How Much Do Architects Charge as a Percentage of a Project?")