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Melissa Galt

Interior Design Business Coach

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6 Ways to Calculate Interior Design Fees with Transparency

Setting and calculating interior design fees today is quite possibly the most challenging part of growing your interior design practice. You want to be fair to clients and transparent, at the same time you want to make a good living and have a profitable business that you love. The two aren’t mutually exclusive.

In fact, when you know how to calculate your interior design fees consistently with ease and they are transparent so your client maintains their trust in you, you’ll find yourself with better clients, more generous projects, and an interior design practice that is profitable and you can be proud of it.

In today’s marketplace, clients, more than ever before, want costs to be controlled and they want to avoid surprises. They also have unprecedented access both online and offline to goods and materials that used to be the exclusive domain of the designer. The rates I’m going to share here will protect your bottom line and give you confidence while your client will feel comfortable paying you for your value in a clear and understandable way.

Your responsibility is to find the right rate or combination of rates that works in your unique practice. How businesses are run varies from state to state and country to country. Knowing your market will go a long way toward making the best decision for your business.

Interior Design Fees, Interior Design Pricing, Interior Design Rates, Design Business Coach
The right rates mean your client agrees to your fees.

#1 Fixed or Flat Fee

Perhaps the most popular of all interior design fees today,  the flat or fixed fee,  can also be the most complex to calculate. At the time you provide your fee, you often haven’t determined if the client is going to require a lot of extra hand holding and be indecisive extending the scope and timeline of the project, or if they are decisive and everything stays on track. You can always include a clause in your agreement to protect you against such unknowns.

Determining the best fixed or flat fee is often simpler if you’ve been in business for a few years and can anticipate what a project will require. You can base it on hours and then add a 15% or more buffer to protect you from unexpected over runs. I like to offer a fixed or flat fee to be paid in full at a lesser rate than another payment option so it incentivizes my client to pay upfront and then I move extra quickly to get the project wrapped up.

You’ll most often see fixed or flat interior design fees for online design. The big box retailers charge as little as $69/room while custom designers for online interiors like the legendary Windsor Smith have a fee starting at $1250/room (yes, you do get what you pay for.) And if you pay close attention, you’ll notice that on Windsor Smith the fees are also paired to square footage.

#2 Interior Design Fees by the Square Foot (or Meter)

This method is very simple and works well when you are doing a sizable space like a great room, master bedroom, or good sized kitchen. Using the range of $10-$17/square foot, if you were taking on a room that was 15×20 your fee would range from $3000 – $5100, depending on whether you used $10 or $17/square foot.

You may want to use this strictly for design services and add a percent to cover all furnishings selected and purchased or you may want to include a percent to cover management of contractors if this is a renovation or remodel.

If, on the other hand, you are doing a small powder bath, this method is likely to leave you short because small spaces often require additional creativity and can take more time. If the bath was just 6×8 your range would be $480-$816 and that isn’t likely to be a good fit unless this is a DIY client and this is consulting only.

#3 Percent of Project Cost

Personally, my favorite method to use for calculating interior design fees is percent of project cost. It is incredibly simple from an invoicing perspective and it includes complete transparency which many designers are reluctant to do. Provide the client with an estimate of the project including furnishings, fixtures, finishes, installation, contractors and more. If you are concerned about them pulling it apart, you can establish a minimum project value to ensure you get a minimum fee.  The percent that you establish goes on top of the project costs, 30-45% is typical in interior design fees.

In invoicing for this, you can schedule payments to coincide with specific project benchmarks. In addition, I like to provide my client with copies of all vendor billings (full transparency) and then my invoice showing my percent added for billing purposes. Most design firms do not want to reveal their sources. I am willing to reveal mine once everything is ordered since I’m proving transparency by providing my invoices at the close. You choose what works for you.

Interior Design Fees, Interior Design Pricing, Interior Design Rates, Design Business Coach
You’ll increase your confidence with the right interior design fees and attract better clients.

#4 Interior Design Fees with Retail Pricing Only

There are a few designers I work who use this method. In today’s world of discount everything, even at the top levels, it can be challenging to employ. You must be working with product that your client isn’t able to find anyplace else so you won’t be shopped. And the retail covers all of your design time as well as any markup you’d have on furnishings. You have to ensure that if your client goes online they won’t find the same piece for less; that’s what makes this method challenging and why few today use this.

The other caveat with this method is that you can do a lot of design before a client decides to make purchases and if your only compensation is tied to purchases, you can lose money quickly. You may design an entire room and they’ll decide to buy only a couple of pieces and do the rest on their own. While your letter of agreement can stipulate otherwise, would you really argue that with a client?

#5 Hourly Interior Design Fees

This is how many of us started out and many still use it. Rates range per city, per state, per country, and per level of experience. Beginning designers often start at $75-$125 while more established range from $150-$450/hour. It can be challenging to track and unless you estimate upfront, it can be a real surprise to clients how long certain parts of the design process take.  As an experienced designer, I’ve always been able to estimate my hours per room and then per project and state that I will not exceed that estimate without my client’s express written consent. That provides peace of mind that it won’t be runaway hours, and it also puts a cap on the hours to be invested.

#6 Interior Design Fees with a Combination Method

It is rare for a designer to work exclusively hourly, most hourly rates are in combination with a percent on top of goods sold ranging from 25-35% over cost. Or in some cases a designer will split their trade discounts with their client and not include a markup.  Unfortunately, that is often not disclosed.

One designer told me that she was sure that her clients knew that there was a markup of 25% so she didn’t say anything. She also didn’t use a letter of agreement. (An agreement protects both you and your client and provides invaluable clarity.) You can imagine the repercussions if her clients found out and didn’t “know” as she thought they did. Transparency is essential; honesty builds trust.

Many designers use a combination of methods described here. While I’m an advocate for maximizing your return on every project, be aware that the more complicated you make it, the more likely your client is to feel overwhelmed and unwilling to agree. The internet and HGTV have dramatically impacted our design industry. What worked on fees just 5 years ago, often has to be updated to reflect today’s empowered consumer and lack of trade protection and exclusive access.

How much you charge depends less on your talent and experience than it does on your positioning, your confidence, and your ability to build trust and maintain it. I’ve worked with designers who’ve been in business for over 20 years and charge what a new designer would and designers new to the field and ready to step in at a more established rate.

If you think your interior design practice would benefit from a rate review, get in touch with me here. My goal, as a successful residential designer for over 2 decades and coach to the trade, is to guide you into establishing rates and interior design fees that will build your bottom line and attract great clients. Having the right rates will build your confidence and your business.

Filed Under: Best Business Practices, Business Development, Popular Posts, Prosperity Mindset Tagged With: Business Success, Creating Customer Loyalty, Establishing Project Pricing, Setting Design Fees

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Comments

  1. Marian Boll says

    December 7, 2020 at 10:33 am

    Melissa, great article! Wow this is so helpful. However, I’m in a difficult situation now. After owning a high-end 64k sq ft furniture store since 1938, we had to painfully close permanently in 2007. It felt like a death. My grandparents started it, my father them myself. Our local economy could no longer support an upscale store such as ours.

    Now that I’m slowly getting into the interior design business again, I’m finding myself working for friends and former clients. There are no stores near my small city. Columbus OH is about 2.5 hours away. Point being it’s difficult, and I find myself having to order from places like Wayfair etc … I lost everything financially. And found myself selling my home and at the age of 47.

    Melissa I don’t know how to charge for my services. I’m used to being the queen bee since I was 26. We had over 100 vendors and I could go to my upholstery, window treatment, and wall covering department all at my fingertips. I even decorated our governors mansion and his office in our capital building.

    I’m doing the following services at a current job by selecting; wall paints throughout, wallpaper in 2 bathrooms, crown molding, baseboard, door trim, choose tile/pattern layout for kitchen and two foyers. Researched and sent choices all door handles, dining room & living room lighting, breakfronts/credenzas. Assisted selecting wall to wall carpeting. Found and the ordered a dining room table and chairs on Wayfair. I’m also the coordinating & communicating directly with contractors.

    These are friends of mine and they absolutely understand and would never ask me to work for free. However I want to be fair to them and to myself. I’m not making any commission off of any of the furnishings since they directly purchased themselves. What do you think a fair design fee by the hour should be for being located in a rural state?

    I’ve been physically ill over this since November 11th. You have no idea how much this means to me. Any advice is so much appreciated
    Thank you,
    Marian

    Reply
  2. Melissa Galt says

    February 5, 2021 at 11:37 am

    Marian,
    So sorry to hear of your challenges. There are at least 8 ways to charge for design services. It would be near impossible for me to provide that kind of specific advice here without knowing a lot more.

    You can get a free copy of my ebook on rates in the FB Group: https://www.facebook.com/groups/interiordesignbusinessmastery It’s under announcements.

    2021 is expected to continue the increase in demand for design, it’s the perfect time to make your pivot.

    Hugs,
    Melissa

    Reply
  3. workshop studio says

    October 12, 2021 at 1:42 am

    Hi! I’m Liam and I’m an interior designer who helps fellow designers grow their businesses. Forget confidence and competition, I believe designers should maintain and uplift each other. By helping and supporting one another, we can promote the business of interior design together.

    Reply
  4. Maazị Ikenna says

    May 16, 2023 at 1:08 am

    Greetings poster,

    This is so a beautiful piece. It went straight to the point and reminded me of what I used to know.

    Many thanks for sharing.

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  11. Malaika says

    July 27, 2023 at 3:33 am

    Hi,
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When client inquiries start to dry up, the kneejer When client inquiries start to dry up, the kneejerk response for many designers is to go straight to panic mode. Economic uncertainties are bound to happen, but they shouldn’t dictate the trajectory of your creative business. 

➡️ What you think about you bring about–and if you’re thinking only about the worst, that is all you’ll see! 

Tune into today’s episode of The Affluent Creative for my strategies for maintaining positivity and stability even in an economic downturn.

🎙️Listen In → Episode 52. 
Listen wherever you find podcasts!
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#interiordesigncommunity #interiordesignpodcast #successcoaching #successbydesign #bestpodcast #podcastrecommendation #designinfluencer #kitchendesigners #bathroomdesigners #commercialdesigner #residentialdesigner #creativebusinesscoach #instapodcasts #interiordesignbusinessmentor #melissagalt #theaffluentcreative #interiordesignerlifestyle #interiordesignerlife❤️
In an ever-changing world, understanding how to th In an ever-changing world, understanding how to thrive as a creative in any economy is essential. 

➡️ This week on The Affluent Creative, I am diving into the importance of networking, knowing your numbers, and staying positive when you are faced with an inquiry dry spell. 

Tune in to learn how to navigate economic uncertainty and emerge victorious.

Listen In → Episode 53. 
Listen wherever you find podcasts!
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#referrals #businessreferrals #interiordesignpodcast #referralsarethebestcompliment #designinfluencer #interiordesignbusinesscoach #interiordesignbusinessmentor #interiordesignpodcast #interiordesignfirm #interiordesignbusinesstips #podcastrecommendations #tothetrade #kitchendesigners #bathroomdesigners #residentialdesigner #commercialdesigner #bestpodcasts #podcastersoninstagram #melissagalt #theaffluentcreative
🗣️Word of Mouth marketing is limited and unpr 🗣️Word of Mouth marketing is limited and unpredictable particularly when economic uncertainty is happening. 

Igniting reliable marketing engines that run inside your business 24/7/365 is the key to keeping your profit pipeline filled. 

Find out how you can claim your very own marketing scorecard and take charge of your pipeline here.
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#interiordesignpodcast #interiordesignbusinesscoach #creativebusinesspodcast #businessofcreativity #businessofdesign #podcastlife #podcaster #instapodcast #instapodcasts #theaffluentcreative #successcoaching #interiordesigncommunity #designinfluencer #melissagalt #interiordesignmarketing #interiordesignbusinesstips #interiordesignfirm #marketingfordesigners #marketingdesign #marketingdesigner
➡️ There are 20 Keys to Effective Client Commu ➡️ There are 20 Keys to Effective Client Communication. You’re likely doing over half of them already, but ARE YOU USING ALL OF THEM? 

Check and see by tuning into Episode 34 on the podcast, The Affluent Creative. #linkinbio 
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#clientcommunication #interiordesignclients #interiordesignbusinesscoach #interiordesignerlifestyle #interiordesignprofessional #interiordesignhelp #kitchendesigners #bathroomdesigners #residentialdesigners #designquotes #designentrepreneur #interiordesigncompany #atlantainteriordesigner #newyorkinteriordesigner #cincinnatiinteriordesigner
#theaffluentcreative #melissagalt #interiordesignpodcast
Do you know how to navigate the challenging world Do you know how to navigate the challenging world of client interactions? 

🎙️Join me on today’s episode of The Affluent Creative where I’m sharing my experiences and tips on standing your ground during fee negotiations, redlining of agreements, and more. 

Learn how to lead the project rather than following the cues from your clients. 

Tune in and elevate your design journey today!

Listen In → Episode 51.
Listen wherever you find podcasts!
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#interiordesigncommunity #interiordesignpodcast #successcoaching #successbydesign #bestpodcast #podcastrecommendation #designinfluencer #kitchendesigners #bathroomdesigners #commercialdesigner #residentialdesigner #interiordesignfee #clientinteraction #creativebusinesscoach #instapodcasts #interiordesignbusinessmentor #melissagalt #theaffluentcreative #elevateyourdesignbusiness #chicagointeriordesigner #interiordesignarizona #interiordesignphiladelphia
➡️ Streamlining your design process doesn't me ➡️ Streamlining your design process doesn't mean cutting corners. Instead, it’s often just a matter of taking back the reigns from your client during the design process. 

In the latest episode of The Affluent Creative, I share my insights on how to help combat decision-making fatigue and frustration in the design process and make you once again feel like the expert you are. 

🎙️Listen In → Episode 51. 
Listen wherever you find podcasts!
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#designprocess #interiordesignprocess #interiordesignpro #interiordesignbusinesstips #interiordesignexpert #interiordesignprofessionals #interiordesignbusinessmentor #theaffluentcreative #melissagalt #recommendedpodcast #interiordesigncommunity #interiordesigncompany #newyorkinteriordesign #louisvilleinteriordesigner #interiordesignaustin #texasinteriordesigner #interiordesignersandiego #philadelphiainteriordesigner
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