How to price your interior design services
"How much should I charge for my design work?"
This is a question that I am asked somewhere around the internet almost every day. And it’s a question I’ve answered in a range of different ways in other posts I’ve written on my blog before. Here’s a few you may find helpful once you’ve read this post:
Three mistakes designers make with charging
The different pricing options for designers
But in this post I want to go a bit deeper on pricing and give you a framework to use as you start to think about pricing.
Why pricing is hard
Pricing design services is always difficult because designers generally don't want to undercharge, lose money on a project or be wasting their time. But they also worry that if they overcharge they will lose the project to a competitor or be completely out of alignment with other designers quoting on the job.
And this is all fair enough because pricing is a complicated topic, especially when we talk about pricing creative services. It's much more of an art than a science and your pricing WILL adjust and change as your business evolves.
One main message I want to share with you in this post is that there is no right or wrong way to price in your design business and I've seen a lot of different models over the years of working with lots of designers. So learn what you can about pricing but then apply this to your business in a way that suits you. This is your business and you need to do what is right for you first and foremost!
One issue that is definitely common with many designers I speak with is that they don’t charge enough. They either massively undercharge in order to try and win business or they just pluck numbers out of the air rather than spend thinking about their revenue goals and what they need (or want!) to be earning.
So perhaps you've come to read this blog post because you are doing that sort of thing as well. You may have no real pricing strategy in place yet and want to take a bit more of a systematic approach to how you estimate and price your work. And if that sounds like you then hopefully what I share below will help you.
In this short post I will be sharing a pricing system that you can plug and play in to your business to get started with charging clients. This is just a simplistic overview of the system that I share in my pricing course ‘The Pricing System for Designers’, so if you want to get more in depth information on the information I’m sharing here plus get hold of my free fee proposal templates (and other freebies that come with the course) then come and join us here.
How to work out your pricing
So here is a quick summary of the steps I advise when you are first starting out and find pricing difficult.
1. Work out your hourly rate
In my short course on pricing I share a formula and system for how to work out your ideal hourly rate and how to estimate your design projects based on that.
It's more complicated than I can share in a short blog post here but the basic system is to work out how much you want to earn in a year, how many hours you want/can work each week, how many hours are client project work vs other work you have to do in the business (e.g. admin tasks, marketing) and then calculate your hourly rate based on those figures.
Here's a quick snapshot of the formula spreadsheet that you’ll use in the course to work all of this out automatically.
2. Estimate your project hours
Once you've got an idea of what you need to be charging per hour to make money in your business the next step is to make a good estimate of how long you think a new project you’re trying to price is going to take you.
Remember there are lots of aspects to a design project that need to be factored in to pricing. It’s not only about the design work itself you also need to estimate how long other aspects will take you as well. Things like;
meetings, phone calls, emails and text messages with clients
administration directly related to the project
site visits
researching, planning and sourcing products from suppliers
creating your design drawings
styling/install of the final project
That’s just to name a few….so make sure you think about all the different aspects of the project and how long each of them will take you and include all that as part of your fee estimate.
Once you've got this estimate multiply it by your ideal hourly rate and this will give you the starting point for the pricing of the project.
Remember to also add in a bit of a buffer to your calculation so you cover yourself if something takes longer than you expected - and also so you actually make money on the project.
But I realise that estimating like this can be hard when you're first getting started - so this is where step 3 comes in.
3. Start tracking every single project as soon as you can
The best thing you can do to start pricing more accurately is to start tracking every project you do and how much time you are spending on them. I find the app Harvest is great for this.
Very few designers I meet are tracking their time accurately, but this is the only way you are going to get better at putting together fee proposals and quotes for your projects. Without tracking you will always just be making a 'best guess' and you'll more than likely be losing money on the projects you are doing.
From this point forward every project you do should be time tracked until you get a really good idea of exactly how long different types of work take you.
And once you've done this for a number of projects you'll find the process of estimating your time and adjusting your hourly rate is much easier and your quotes will become a lot more accurate.
Without actually tracking what you're doing you'll never know if you are making money or losing money!
Some final thoughts on pricing
OK before we finish up I just have a few final thoughts to share about pricing:
No matter what size the project is, make sure you make the scope exceptionally clear. One of the quickest ways to start losing money in a design project is by scope creep. You want to document everything you will be doing and clearly point out what isn’t included as well. That way if scope does start to creep you’re well covered to be able to raise this with your clients and renegotiate the fee.
Make sure your fee proposal is professionally presented and well branded. If you don’t have a good proposal yet then you will get my templates for free in my short course ‘The Pricing System for Designers’.
Also make sure you do grammar and spell check and if you do copy and paste proposals between clients do a triple check that you never accidentally put the wrong names or addresses or other details in your proposals. Make a good impression
Send clients samples of your work via a portfolio that you put together. I used to always send an example portfolio as part of my fee proposal documentation and also include any testimonials for social proof.
Make sure you get a client to sign the agreement and return it to you BEFORE you start any work on a project. Even if you feel pressured to start as the client is saying they are in a hurry, do not start work before they have agreed to your terms, or you leave yourself exposed to risk.
Make sure your payment schedule is detailed in your fee proposal so this is clear up front. I would normally take 50% up front and 50% on completion of work for that phase. Again, you can find more information about this in my short course.
When to raise your prices:
if you are starting to get too much work and want to be more selective with who you are working with
once you start to establish a name for yourself – e.g you’ve had some media exposure, you’ve got lots of testimonials and social proof to display on your website and/or your social media profile is growing.
if you are ready to test new prices and see the market tolerance for them
Finally - remember that pricing is an art not a science and it should always be evolving as your gain more experience and get more work.
For more information on what I’ve covered today and to grab all my free resources then join my business short course - The Pricing System for Designers.
Courses and Templates for Designers and Architects
DO YOU WANT TO….
Improve your professionalism?
Find more clients?
Bring in more revenue?
Create better systems and processes?
Then check out my business courses and templates for designers and architects.
These courses and templates leave you with work done - not just a long list of things you need to do next. We have a really strong focus on taking action and getting things created that improve your business.
Enjoy the rest of your day!
Clare x
Dr Clare Le Roy
