Transcription
Welcome back to the channel, everyone. I wanted to start off this year with a question, which I know is something that a lot of us interior designers who are first starting out their business are wanting to get clear answers on. And that is, how do you price your design services?
This is a question that has its variables included. So, it's not like a product that you sell to a customer and has a fixed price and it stays like that through an endless period of time. What I want to cover is basically part two of my first video, which I did because it goes through the context with which you need to be prepared when you're thinking about this thing. So, what are some of the factors that are actually involved in setting your pricing structure? So, if you haven't checked that out, I definitely recommend you see that first before you jump into this video.
I'm going to make this one really quick and simple. And first, I want to start by giving a caveat that the information that I'm providing you is based on my knowledge and my exposure in the past 3 years of running this business. If you are an interior designer who is just starting out, you have to first be mentally prepared that you are not going to be making an optimal amount of hourly rate. You have to work for it. You have to get enough projects under your belt. You have to get enough experience to understand what it's actually like to deal with contractors, clients, invoices, procedures. Those are all of the things that you do not learn in school. School teaches you theoretical knowledge, teaches you somewhat technical knowledge of how to create a floor plan, 3D models, and things like that, but it does not teach you the practical value of what it means to actually run a project from beginning to end.
Now, the range that I'm going to give you of what an hourly rate looks like is based on a beginner designer to a medium designer to all the way up to an experienced designer. And that range can start anywhere between $50 an hour to $200 an hour. If you're someone who's just starting out, you may want to consider charging for your hourly rate to be $50 and then make your way up gradually year by year and see, "Hey, I've actually done 10 projects. I've gotten them photographed beautifully, so you know what? I think I can go up to $100 an hour."
My experience with how I've been structuring my pricing has definitely changed. When I first started, I used to offer a fixed rate. So rather than looking at how much time it's going to take me to take a job on, I would just present a number to my client and say, "Hey, this is my rate per room or per space." Now, obviously, at that time, I was super green. I was super new, so I didn't really have enough experience to gauge how many hours it would take for me to design, let's say, a bathroom. After I realized that giving a fixed rate to the clients definitely was not making me any money at the end of the day, I realized I need to go back and do some homework. So, I started estimating my own bedroom in the house and saying, "Okay, if I were to completely renovate this bedroom, how many hours is it going to take me to put a mood board together, to source all of the materials, to do the quoting with contractors, and how to do project management?" So, how many hours is it going to take for me to go on site, maybe go to a showroom with the client? Collectively, I figured out how many hours it would take me roughly. And that's when I started to calculate my fixed rate.
That also for me personally didn't work because if you are someone who's running an interior design business, you are basically the person who does everything from the very beginning sales consultation to the designing process as well as execution. So you're wearing multiple, multiple, multiple hats. And when that's the case, you are spending endless amounts of hours on doing one single job. And with that, I realized that the fixed rates were just not making it work for me.
That's when I decided to do the second approach: charging by the hour. Now, that approach doesn't usually work because there are a lot of variables that can hinder how many hours it's going to take for you to complete a project. The element of the unknown for a client makes them paranoid and they're very less likely to sign you on for a project. And that's what I felt was happening with that hourly rate structure. I didn't close a single project.
As of lately, I've been working with a model called a hybrid pricing structure, which I find has actually been working well for me. Hybrid basically means that you can take the best of both worlds. You can take all of the benefits that come from the fixed price and it also combines the benefit of the hourly rate, which enables you to set boundaries with your clients and say, "Hey, I'm more than happy to come to this plumbing fixture showroom visit with you. However, if you want me to attend that 1-hour visit and accompany you just for general conformity of the design, it's going to cost you." So, those are the two things that merge perfectly well together. And I find that it has been working with my clients.
The way that I do it is I basically break my services down into two stages. Stage number one is a design and planning process. Now, that process is always fixed because I know from experience how much time it's going to be taking me to put together a design for a space. So that never changes and I will never spend more or less in coming up with the design concept. The second stage is the actual purchasing and execution stage. This is where a lot of the variables come in place. So you have a perfect concept in place, but when it comes time to working with the contractors to execute it, you have all these different problems that come up. And it's very natural and common for that to happen. I always say this in my videos, more than we are interior designers, we are actually problem solvers. So as you're problem-solving, you're spending lots of hours in figuring out the optimal solution to present to your client, pivoting the design as needed, and then moving forward with that specific solution in mind. So all of that time that happens during the execution process is something that I charge on an hourly basis. That's something that I found works well with the client because A, they have transparency into what they're paying me as a designer to come up with their house renovation plans, and it gives them the complete honest and reliability on part two, which is the execution is totally out of my control. I can manage it, but if some things come up that we didn't plan for, then you have to compensate me for my time for that. And that's very fair.
So, that's the advice in a nutshell that I would give you. This year, I am also offering one-on-one coaching lessons, which you can purchase from my website. It has worked really well for people who have endless amounts of questions on not just pricing, but how to start your business, what kind of paperwork do you need in place, how do you do your invoicing, how do you do contractor relationships. It is highly valuable and you will get an opportunity to basically strategize with somebody who has been doing this for a couple of years and who has learned the hard way what not to do and what to do. So definitely check out that link in my description box and I'll be more than happy to provide you that training and that coaching that you need to get that confidence to get your business started.
And if you just want to listen to other professionals chat with me about the world of interior design, then check out my Design Table podcast. I started this podcast last October and since then, I've had the pleasure of connecting and getting together with so many talented individuals who are hustling in this field and who are doing great things and are more than happy to share their wins and successes and their challenges. So definitely stay in tune with the podcast. It is available on Anchor for free, and if you have a Spotify account, it's available there as well. And if you're somebody who likes to have a visual presence, then they're all available on my YouTube. Check out the playlist here.
Once again, thank you so much for tuning in and I will see you guys in my next video. Bye-bye. [Music]