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Interior Design Fee Options

Updated on August 13, 2012

How to Set Interior Design Fees Now!

If you're struggling with your interior design business, chances are your prospective clients are your competitors. They can now research on the Internet and purchase products on their own, so when they meet with you, the thought running through their head is, is he/she overcharging me for something I can buy on my own?

You also do your research on the Internet, so if you do it, why wouldn't they? If they can save your mark-up and fees for shopping and purchasing, then something has to change for you to make a reasonable living as an interior designer. Right?

Some interior designers are living in the World of Wishful Thinking...that the economy will recover and the phones will start ringing again. It will get better (and is), but today, consumers want to feel wise about their investments and expenditures. How can you help them feel this way and get them to willingly hire you to create their dream home, or sleek and sophisticated office?

1. Consider charging design fees only, and allow your clients to do their own purchasing. I know this is controversial, but I switched to this a long time ago, and my fees are almost double what they were before. You don't have the liability or headaches associated with purchasing. Your costs of running your business can be reduced and your profits will increase radically. If you follow the 80/20 rule, if your fees are 20% and they take 20% of the time of your business and you make 80% of your profit with the fees, then doesn't it make sense to cut the 80% of your business that has the most time and least profit? Couldn't you do more of the 20% work? The answer is "Yes."

2. Set limits on fees. No one likes the feeling of an open checkbook. Your clients get upset when they receive high bills without warning. If you've ever had a client refuse to pay, negotiate your bills or fire you, then you must learn to talk about their expectations for expenses. They honestly don't care how hard you work or how much you do for them, in the end, there is a value and budget in their head that they attach to the services you perform, and if you exceed that, your opportunity for future business and referrals is gone.

3. Discuss expectations for your client's investment prior to starting the project, and request a substantial retainer to start. If you're not using a retainer, and you do a great deal of work in the first month and then send a large bill, you are risking not getting paid. You love what you do, but do you really want to make a charitable donation every time you do a job?

4. Use a percentage method for figuring your fees. If you know that a client has $100,000 to invest, what is a reasonable percentage for them to invest in your services? What do they value?

5. Use a cost per square foot method for figuring your fees. This works particularly well for commercial or new construction projects. Break your fees into logical parts and talk about the results your delivering at each stage of the project.

6. Educate your clients about your process. Most clients don't understand what is involved in a project. If you can show them finished projects with budgets, it will help them understand what is reasonable. If a client has not worked with an interior designer before, they have no idea what to expect.

7. Your clients don't want to appear uninformed. It is embarrassing, and many don't feel comfortable talking about budgets because they are worried about you exceeding that budget, they worry because they don't know what it should cost and if they can afford your services, and they are worried that they will feel small. Irrational? Maybe, but your job is to become a trusted advisor, so guide them and protect them.

8. Give your interior design clients options. If you go into every meeting offering only an hourly fee, you risk losing a large percentage of your jobs. That does not explain your value, and compared to another designer's lower fee, it would be wiser for them to spend less money. Right? That's what they think, so it is up to you to help them make a better choice based on your value. If you're interested in developing a Value Based Fee basis of billing, do sign up for our free ebook mentioned in the link, and you'll be invited to a helpful webinar about How to Avoid Fee Fiascos...And Attract Your Ideal Client. You'll find out more about Value Based Fees and how they can transform your relationships with your clients.

9. Explain the costs of not using an interior designer. Benefits include time and money savings (explain how) and stress. They don't have to deal with the problems, people, etc. You have resources and knowledge that will help them get the best result in the least amount of time.

10. Qualify your clients before meeting with them at their homes or offices. Don't take a difficult client because you need the revenue. It always costs you money in the end.

Today's consumers are interested in exceptional service for a fair value. Your point of differentiation must be based on your service, your perceived value and your personality. Ask your clients the question, on a scale of 1 - 10, how likely are you to refer us? If it is less than 9, find out how to make it a 10 and change your services accordingly. That's how you win referrals and higher fees in a highly competitive environment.

For more information about increasing your income, visit, your shortcut to a more profitable and passion filled interior design business.

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