Interior designers, it's time to start charging your worth! Pricing design services is a common hangup for many interior designers, but Kate Hatherell is here to shed some light on the often secretive world of pricing in interior design. Kate is an interior designer turned design coach and teacher. She founded The Interior Designers Hub—a platform providing business mentorship, training and support for freelance interior designers and small studios. Kate's "Practical Pricing" masterclass has helped countless designers to effectively price their packages—and now she's here to help you do the same.
Interior designers from Visualist's community, The Creative Business Club, approached Kate with questions ranging from how to find confidence in their pricing strategy, to how to deal with bargain-hunting clients. Here are the highlights...
How do I gain confidence in pricing my services?
I think we often price our services based on what we think we're "worth" but actually, it's not a "finger in the wind" exercise. Sit down and work out how many hours the project is likely to take. Work out how much you would like to earn and do the maths to see what that works out at for an hourly/ daily rate. This just helps you to get a reality check. Of course, you don't just then charge that rate as you also need to build in time for when you are not engaged in billable hours. However, it gives you a baseline to understand where to start. When you have calculated how much you need to make, you're no longer just guessing at a price and wondering if it's reasonable.
Think also about the transformation you are bringing to your client—a new lifestyle, comfort, showing off the neighbours etc... you are not just selling your time, but your expertise and the transformation you bring. That's valuable to people! It really can be daunting to raise your prices, and a lot of it is about your mindset and how comfortable you are to charge more. I always advise designers to do a practical exercise, calculating what they need to earn to pay their bills, and then how much they would need to charge per day/ per hour to sustain that. In my experience, a lot of newer designers are charging the bare minimum and they could easily double their prices. Always aim to price higher rather than lower... be mindful of the messages that you're giving out by offering "cheap" pricing. A lot of clients will be suspicious of people who are "cheap" and avoid them for that very reason!
Is it better to charge an hourly or flat fee?
Charging a flat fee is fine, as long as you are clear about the boundaries around your work. It's so easy for the scope to creep up until you are working a lot of extra hours without getting paid. If you want to charge a flat fee then make it crystal clear with your client what is included in the price and what isn't. For example, how many revisions of concepts you will deliver, how many times clients can send back furniture, etc.
If you choose to work for an hourly fee, you need to accurately estimate your time in order to avoid being underpaid. You should use a time-tracking tool to help you, Clockify is a good one, but there are other apps out there too. Remember that you need to allow yourself the time to be creative, conduct research and all of the other administrative tasks like sourcing and procurement too. I tend to charge a flat fee for design, a percentage for procurement and hourly rates for project management (sold in blocks of 10 hours, depending on the project size).
When it comes to pricing my services, how much is "too much"?
It's a bit of a "how long is a piece of string" question because it depends on so many factors. You need to get clear on the sort of design you are doing and who your ideal client is. If you are selling design to young working families who want their home designed, your clients are likely to have a very different budget to the business person who is wanting their second or third apartment in a city location decorated. You want to avoid working at the lower end of the price scale if you can help it. A lot of money is made on mark-up of furniture, and if your clients have a small budget, this may impact the amount you may be able to make.
How can I price in accordance with the market when everyone is so secretive about pricing?
The market can be very opaque, but I for one am always encouraging people to share their pricing. It's actually pretty off-putting for most clients to have to guess how much you are charging. Price yourself based on what you need to earn, and for the market that you are serving. Even if that makes you the most expensive in the area... that's not always a bad thing. Think of the alternative... what messages do being "cheap" give about the services you offer? Remember that interior design is a luxury service, and you need to see your services through the lens of your client. Don't judge your services by what you could afford, but by what they can afford.
What should I consider when designing my different packages and services?
You need to think about the deliverables you will offer for each package. I recommend that designers don't have more than three packages because it can get really confusing for clients, and a confused mind never buys! Consider the journey you want the customer to go on. For example, you can offer a lower tier offer where you just produce concept ideas, a medium tier where you also produce visuals and a shopping list, and a top tier where you offer procurement and project coordination too. The customer can start at your lower tier and move up through the ladder as they grow in confidence. If you design your packages around this customer journey, it gives you lots of opportunities to deepen the working relationship with your client and of course, upsell to higher-priced products.
Top tip: I would advertise all your packages as "starting from" to allow yourself the opportunity to tweak pricing if the project is more complex.
Is it better for clients to subcontract contractors directly or for me to project manage the whole thing and take a cut?
The phase after the design is known as procurement, and this is often managed by the interior designer. It's a really good way of making additional income and you can charge a markup on the FF&E of your order. In terms of hiring subcontractors, you can do this, however, there are quite a few pitfalls with doing it, in terms of your liability and the work involved. A lot of clients hire the contractors themselves and the designer can co-ordinate the work. You must make sure that, whatever approach you take, you have insurance and a contract in place that covers you for all project-related eventualities. As part of this contract, you must have a clear schedule that states the number of revisions that are allowed within the scheme. If a client changes their mind, you can then charge them an additional (agreed in advance) fee for them changing their minds. When you make this clear at the beginning, clients are likely to make better, more thoughtful decisions.
What should I say to clients who challenge my prices?
If you are confident in your pricing, then you don't need to be fazed by someone pushing back. Never reduce your prices just because they ask. Explain the method behind your pricing and how you can change adjust the scope of the project if they can't afford it, but hold true to your pricing. You're worth it! If they don't want to pay it, then they aren't your ideal client. Remind yourself of the transformation that you bring to peoples lives. People get what they pay for and if you were to reduce your pricing, they wouldn't be getting a quality product.
Is it ever okay to work for free?
The most common reasons that interior designers work for free is that they either lack confidence or because they want to build their portfolio. Any good interior design school should structure their course so that you come out of it with a strong portfolio ready to take to the market. If you are self made, consider creative ways to build your interior design portfolio that don't require underselling yourself. With regards to confidence, there's nothing like learning as you go along. If you are qualified, you are competent. From there the only real way to get experience is to dive in and get it!
Want more advice on how to set your rates and navigate pricing as an interior designer? Sign up for Kate Hatherell's pricing masterclass, Practical Pricing for Interior Designers. Whilst you're there, delve into the huge bank of interior design resources that The Interior Designers Hub has to offer.
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