When it Comes to Pricing, Interior Designers Agree on These 3 Things...

How and What do I Charge For My Design Services? That is THE Age-Old Question...

With apologies to Shakespeare, Hamlet’s quandary seems minor compared to the hair-pulling angst of many interior designers and decorators when it comes to figuring out the best way to be fairly compensated for their services.

If you ask enough successful designers and firms, you'll quickly discover that there is no easy answer—whether you choose hourly billing, product margins, flat fees, by the square foot, or a hybrid—a lot depends on your experience, client type, project type, specialty, and… probably a thousand other factors.

You truly need to weigh the pros & cons of each method and decide what's best for you.  Your pricing structure may need to change as you evolve as a designer and a business, so it's never a bad idea to continually review your options.  (We'll point you to some quick online reads to get you started.)

Regardless of what you settle on, there are some basic tenets that are mentioned—in some form or another—again and again by established interior designers.

Painting: Lais of Corinth by Hans Holbein the Younger    Background:    Mitchell Black Orange Bush Wallcovering

Painting: Lais of Corinth by Hans Holbein the Younger

Background: Mitchell Black Orange Bush Wallcovering

 If we had to distill them down to the 3 Rules everyone agrees on, they would be:

1. Lay everything out up front—(even if that’s scary).  Clients need to completely understand the process and amount of time involved with each phase of the project.  You want to have a well-defined scope and clear parameters regarding what they can expect from you, and what you expect from them.  The more detail you provide, the more the client understands what goes into everything you do.   Search online for agreement templates (this one from The Interiors Association is a start, but if you want a truly comprehensive checklist  you might want to check out  The Interior Design Productivity Toolbox by Phyllis Harbinger.)   If you feel like spelling everything out will scare away your client, the second critical tenet is...

2. Trust between you and your client is essential—if it’s not there, don’t take the job.  (Which might be even scarier).

As with any contracted service, people are wary of being taken advantage of financially and they worry that they’ll be disappointed with the end results.  Transparency is key (see #1) as well as the assurance of your skill in collaborating with the client to create a space they will love. If, after a comprehensive consultation, it seems like a client is still uncomfortable with your pricing structure (having unreasonable concerns that you’ll pad your hours and/or product margins) or will be constantly second-guessing your recommendations, seriously consider whether the job is worth the stress (and time) of constantly having to defend your work and your costs.  

Which brings us to…

3. Don’t underestimate the value of your expertise (and DON'T give it away for free).

Chances are you became a designer because you love beautiful things and have a natural talent for making things beautiful.  Whether through education and training, experience, or just an inborn eye that others don’t seem to possess, you’re in this business because you have a level of expertise that the marketplace is demanding.

While the internet and HGTV have provided unprecedented levels of information and design education to consumers, these sources have also created a great deal of unrealistic expectations.  Would-be DIY-ers often lack a full understanding of everything that actually goes into a professional design project, regardless of its size, scope or budget. The long hours and hidden costs of planning a layout, choosing products, managing orders, and overseeing installations tend to be underrepresented in popular “before & after” stories, so it’s critical that clients understand everything that goes into what you do and why you need to charge them for your time and intellectual property.

For some further reading on fee structures, check out:

How Much Does An Interior Designer Cost?  (Architectural Digest)

http://www.architecturaldigest.com/story/tell-all-fee-article-012008

How To Price Your Interior Design Work (Artbistro)

There’s surprisingly little discussion between designers online about how they charge (at least publicly)  but we managed to find a few lively threads where the advice is generous and detailed.  Our favorite responses were on design blogger Emily Clark’s post from last June.   You”ll want to read the whole thing, but the comments especially are a treasure trove of wisdom.  Here are just a few of them:

Sarah says  - June 25, 2016 at 2:09 pm

"The best advice I can give you regarding all your questions is to have a well-defined scope of work from the beginning of a project. Work out all the details–what room you’re working on, what you’re sourcing, whether you’re helping with accessories, etc.. Define your deliverables and the client-feedback process (how many “rounds” of sourcing/feedback is included). Your job is to manage client expectations with confidence, and to help them make a decision. The design process can go on forever if there are endless options and nothing that forces someone to make a decision, and many clients hire a designer so that they can finish a project and stop spinning their wheels."

Kimberly Hight says - June 24, 2016 at 8:04 pm

"It is VERY important to convey value to prospective clients who may not fully understand what they are getting for their money, but  ‘ve found that charging for consultations weeds out those who are not serious about moving forward with a project or those who just want free design advice."

Ashley @ActuallyAshleyBlogs says - June 26, 2016 at 9:45 am  

"An easy way to avoid billing hourly is to upcharge materials by a percentage- 35-65% markup on everything from drapery to furniture to art. If you are able to open accounts with the vendors and purchase these items wholesale, even with the markup it is comparable to retail pricing for the client. That can cover your cost pretty well!"

Maggie @ Maggie Overby Studios says - June 24, 2016 at 10:59 pm

"...not charging what your worth takes time and some getting taken advantage of to figure out.  Another I’d add is that you often have to be a therapist (how much do therapists make?) People often hire a designer because they can’t make a decision, don’t know how to communicate what they want, or can’t make compromises with their spouse. As a designer you have to to negotiate with all these personalities and make them feel confident in the decisions they are making on top of doing design work."

Becky Parham says - June 29, 2016 at 10:48 am

"I have been an Interior Designer for 32 years so needless to say I have seen many changes in this field. I love blogs and Emily’s is one of my favorites. I love HGTV but of course watch and enjoy them knowing it is not real life or real budgets! What does concern me is the perception that an Interior Designer simply picks furniture, fabrics, and accessories. That is only 30% of what I do on a daily basis. I did receive a degree in Interior Design and take classes regularly to maintain my license. My field is a technical one not merely an artistic one. I charge $150 hourly and this can include doing Design Intent drawings (electronically), doing lighting and electrical plans, doing Demolition Plans, as well as furniture layouts and furniture specifications. I would say this is 60% of a project and will add a lot to the budget. I provide one layout and give two revisions free of charge. I have certain furniture, fabric, lighting vendors I know and trust so I use them routinely. This way I’m not “reinventing the wheel” with each project. This does not hamper creativity given all the ways you can tailor furniture with finishes and fabrics. Again, I present one design proposal (furniture, fabrics, finishes, lighting) and then do two revisions at no charge. I don’t buy anything until the customer has signed off on it. I also use vendors who give a Design Discount (usually 15 – 20%) and that is for me. If I decide to share this savings with the customer I may give them 5-10% and then I still get something. I love what I do but I don’t believe in doing it for free! Good customers will appreciate that. Good luck to all of you young designers out there. Don’t put yourself on sale!"

Beth W. says - August 3, 2016 at 9:39 am

"I have a degree in interior design and work for myself. It has never been a full time job for me. However, I have decorated 9 or 10 complete homes through the years. I totally agree with what you’re saying. People and friends especially can expect this service for free. In the beginning (20 yrs ago) the going rate was $75 for a designer, so I charged $50. I always gave free consultations which I had to stop doing. I was giving out my ideas, and probably gave away too much free design advice. I did come up with something for those DIY-ers who don’t want to pay a a designer to finish their room. There seems to be alot that fit in this category. I charge a $75 consultation, but do not give out any ideas at that point. Just ask a ton of questions, usually have them show me their Pinterest board of what they love, or magazine pages. Then, if they just want the ideas, I make a binder full of everything I would put in that room, and where to hang or place it. However, no sources are given. They have to do the research themselves, which for many people, that’s fine. Depending on how detailed the room is, I charge anywhere from $375-500 for this. I also just limit myself to how many hrs I can put into this. It’s not great money, but it helps avoid giving away ideas for free."

I have also noticed people expect free design advice when they know you. One time a friend hired me to do a consult, and she ended up getting angry with me for my fees, which I had explained beforehand. I decided in the future, I would not charge close friends again. It wasn’t worth losing friendships over, which is unfortunate. I wouldn’t call a doctor/friend and expect them to treat me for free.

People seem to be terrified of the hourly rate, especially before you build that trust. I always feel better giving a client a base rate estimate.

Confidence is definitely an issue. We should be more confident in what good design is worth! A well-designed room can have a huge impact on the people that live there. Not everyone has the ability to visualize what a room can be. For those of us who do have abilities in that area, we should not feel guilty for wanting to be compensated for our ideas and hard work. This is something I definitely have to work on!"

LG says - June 25, 2016 at 8:23 am

"...in my experience I have always billed by the hour. Clients know this upfront. My consultation, time driving, shopping, installing… that is all billable time. And yes, if you present to clients and they don’t choose to work with you I still bill them, and in my experience this is expected by them– I’ve never had a problem. Many clients like to take your presentation boards and do the work themselves with the direction you’ve provided."

Jennifer Kesteloot, Owner of Jennifer Kesteloot Design, a full-service residential interior design studio based in San Francisco says:

"Buying high-quality custom or semi-custom furniture through a showroom is surprisingly time consuming - it's a much different process from buying a piece at a retail outlet like Crate and Barrel or Pottery Barn. In addition to their time, designers are taking on the added risk that something will go wrong with the order, that clients will change their minds, that any one of a dozen things will happen that would leave them on the hook for all or part the purchase - a percentage is a fair way to compensate them for that added risk….

If designers charged only a percentage on purchases, one could argue that they'd be motivated to sell you the most expensive pieces possible. If they charged only for their hours, one could argue that they would be motivated to take as long as possible to get the job done. The bottom line is that you should be working with someone that you trust, and then trust them to create the best space possible for you within your budget.

It's stated in my design contract that my clients are free to inspect the receipts for their purchases at any time - everything is transparent and all fees are agreed to up front. Ask your designer - she may be willing to do the same for you and help put your fears to rest."

Rachel Waldron, Residential Designer:

"The hourly fee is paying for your designer's time. The margin pays for their liability and overhead involved in purchasing products. As a professional interior designer, I cannot afford not to do both. I can certainly wrap it up in a higher hourly cost, but it seems more honest this way. Designers like to be transparent and believe in communication. This is why there seem to be more fees. The truth is, we're on your side and trying to get you the best product within your budget."

 

What are your thoughts on pricing?  We'd love to hear them at editorial@steelyardaccess.com.

Sandy Hughes