Pricing interior design services is a topic that comes up with architects and interior designers regularly. It can feel like a complex topic, but it doesn’t have to be. There are some clear and simple rules to follow, but getting educated is the first step, and that’s what this interior design business spotlight session is all about.
I have written extensively about pricing interior design services as it’s a topic I am passionate about, as I predominantly work with start-ups. Still, it is important to highlight that this is not a start-up problem. Pricing interior design services are just as much a problem for experienced designers and those starting out.
The three big mistakes highlighted in this list are the biggest culprits to designers making a loss on their services or going broke within their first few years of business. Sadly, designers will start with one of these mistakes and then aggravate it by adding the other two. It’s a vicious cycle that spirals out of control. I’m glad you’ve found this post and that I can guide you, at least in part, from making these whopping great mistakes.
Before we get started, if you haven’t seen my series of posts on pricing interior design services, you can start with this one that explains the industry standards, from good old-fashioned markups to value pricing and everything in between.: Interior Design Fee Structures | Complete Guide
Pricing interior design projects shouldn’t be a number plucked out of thin air. You should have a system to follow! Every designer needs to work out their overheads and understand how much money they need to earn each month.
The way I work it out is simple: I add what I need to earn annually (including additional for what I want to earn), then use a formula that adds profit margins and contingencies and sets a minimum rate for each project. I never go below that rate, and I never discount my services. Ever. This is the template I share with my mentees. It makes pricing interior design services simple and fast, and it is based on more than twenty years of project experience on all types of projects worldwide. You can tell I’m very proud of it (it took me years to develop, so yes!)
Using a pricing system, however, is only part of the equation. You also need a strategy, which requires you to know a bit about the people buying your services. How much are they willing to spend on the services you’re offering? What makes your projects profitable? How do you sell the value to command better fees and guarantee yesses, not crickets?
You’re pricing interior design services, and you stop to check what others are charging, and you’ve (at least considered) adjusted yourself to suit. Big mistake! Why? Because you can’t know whether that designer is making a profit, whether they are following a system, have a strategy, know their market or what they provide for the money. They are likely to be just as clueless as the next designer.
There are so many interior designers who look profitable but aren’t (I know because I coach them). Don’t be fooled; having a degree or diploma doesn’t make you a profitable designer or an expert on running projects, setting fees or pricing! In fact, they are more likely to be a disaster because they only have academic rather than business-minded learning.
Let me tell you a secret. I’ve worked with some of the world’s top 100 interior designers, and do you know how many of them were profitable businesses? One (the company I worked for). The others were getting funding from everywhere and anywhere (husbands mainly!) So please don’t be fooled. Just because someone looks like they know what they are doing or making money doesn’t mean they are.
If you want your clients to knock you down on price and compare your services directly with other interior designers, copying another designer’s fees is a surefire way to do it. The only way you can stop your clients from comparing apples with apples when pricing interior design services is to create something unique by researching your target market and creating a solid brand and services based on your skills, likes and expertise.
When pricing interior design services, trust in yourself and that you’re capable of setting the price that is right for you. Copying another interior designer’s fees is the biggest mistake you can make. I know it seems like a good idea, especially if you’ve got nothing else to go off, but you need to remember this one key thing: What a designer charges should be different for everyone because what they offer for the price, what they need to earn, their processes and how fast (or slow) they work is likely to be different to you. If you need a place to start, I have an easy 5-step system you can try here: How To Price Interior Design Services (In 5 Steps) ).
Ahhh. This one is sneaky because you don’t know you’re doing it. You have to be very self-aware to catch it. Even if you have a system and strategy and have worked out your fees perfectly, what you think the client can afford always crosses your mind before you hit the send button.
You might have heard the saying that “pricing interior design services is an art”. It is, and it isn’t. The unknown comes into play because we are dealing with real people with real budgets, real dreams, hopes and desires and real personalities. Yes. You may be pulled into someone’s drama (or money story) without knowing it.
For example, some clients are adamant that they won’t pay more than X for an interior designer’s services. Those people will haggle and haggle with one designer, but then, they will come across a designer who charges more than double, and they proceed with them, no questions asked. Why? Because it’s a perfect fit. That designer knows their market, they have a strong niche and USP, and they know how to sell themselves. It’s got nothing to do with how much they can afford. You want to be the designer who they choose at your price because you’ve shown them the value in choosing you at the price that you have set, no matter what price they “can afford”, they “want to afford”, or they “think they can afford”.
If they, down-right, can’t afford you, you’re marketing your services to the wrong people, so you’ve got a marketing issue, not a pricing issue, or you’ve created the wrong service for your client type. The place where you want to sit is in the “it’s perfect” category because that means you know your client inside-out from a marketing perspective, and you’re a perfect fit.
You can decide to negotiate if you choose (and by negotiate, I don’t mean drop your price; I mean take something out to lower the fee by discussing something that is a want-to-have, not a must-have on the project) as this is simply part of the market research stage of business which includes refining your services as you grow your business. Be the intelligent designer, do your market research, know your clients and don’t assume what they can afford. What they can afford and what they will pay are two different things.
Yes, there is more to pricing interior design services than meets the eye, but this doesn’t mean you can’t get it right. Start with one service and perfect it. Ensure that you’re using a pricing system and have a pricing strategy. Of course, alongside that, you need to understand how your services and prices link to your marketing and how that all ties in with your interior design business, the clients you serve and the personal goals you have. But if you take it one step at a time, you have more chance of success because these mistakes compound; you’ll do one, then you’ll do the other, and before you know it, you’re a hot mess.
There are common misconceptions in the industry that things like your location or the amount of past experience affect your fee. No! Your ability to sell your service is what affects your fee. Don’t look to other designers, don’t base your prices on what you think your clients can afford and don’t think that everyone around you has got it right and that you’re the only one struggling with this. It is a complex topic, and there is a reason why pricing interior design services is the central question everyone asks whether they’re taking on their first client or their 100th. It varies, and it should! One price doesn’t fit all.