Knowing how to charge and when to charge is necessary for your design firm. This week, three designers—Amy Carman, Ashley Gilbreath and Stephanie Kraus—share how they found their pricing plan.
UPFRONT FUNDS
“Instituting a flat fee helped us grow by narrowing our focus to whole-home projects with clients who value our experience. We wanted to ensure that we were touching the whole home, which we have identified as our sweet spot—having our hands on every aspect of the project means that we can deliver the best product possible to our clients. This shift also establishes a level of commitment and a clear set of expectations from the get-go. A flat fee attracts clientele who understand the value of hiring an experienced designer, and who trust that we are going to deliver the best product. The hefty upfront fee demonstrates that they take the project seriously and value our process. [This system] ensures that clients view our services as an investment and establishes a sense of trust and commitment, allowing us to do what we do best, resulting in a happy client and a successful project.” —Ashley Gilbreath, Ashley Gilbreath Interior Design, Montgomery, Alabama
ACCURATE ESTIMATE
“Part of our responsibility is to educate clients upfront so they have a realistic expectation [about] what it takes to finish a space to the level they see in our portfolio. We work with our clients to determine a budget for their project upfront [based on the costs of past equivalent work]. If it is strictly a furniture and decor project, we base their estimated investment on past projects of a similar scale and quality. By studying the design hours our past projects have required, we’ve been able to create an average per-square-foot cost, which we then apply to each area our client would like to furnish in order to land at a realistic budget. We follow a similar process when we work on renovation and new construction projects: We’ve kept track of what it takes to complete a typical kitchen or bathroom renovation, for example, and we provide that estimate to the client during the interview phase and incorporate it into our fee proposal. We can also look at similar homes that we’ve completed and provide what we think it will take to finish a client’s home.
“When you’re working on a variety of scales like this—new construction might be $2 million or more, while furnishing a bedroom might only cost somewhere around $50,000—the design hours it takes to complete them are also quite different. Because we’ve tracked how much time it typically takes us to accomplish our design work, we are able to arrive at a sliding percentage model by taking the average design hours for each project and aligning it to the total cost. As an example, a $200,000 furnishings-only project usually takes about 110 hours. When we multiply those hours by our hourly rate, it is equivalent to about 9 percent of the project budget. For a large-scale renovation that might cost $1 million, we typically spend about 360 hours, which is 6 percent of the budget. Factors like market variables and staff efficiency are always changing, so we analyze our performance year-over-year and make adjustments to these percentages annually to stay in step with our customers and project mix.” —Amy Carman, Amy Carman Design, Wauwatosa, Wisconsin
EXCEPTIONAL SERVICE
“Renovating or building a home is one of the most significant investments many will make in their lifetime, and it can also be one of the most stressful. By charging an appropriate design fee and product costs, we enable ourselves to provide a comprehensive, luxury service that alleviates this stress. In the world of luxury interior design, the value of expertise, exclusivity and exceptional service cannot be overstated. Our firm is dedicated to delivering excellence. Our highly trained team combines exquisite taste with a profound understanding of design principles, which allows us to create spaces that are not just aesthetically pleasing but also functional and tailored to our clients’ lifestyles. This level of expertise comes from years of education and experience. We offer the best to our luxury clients: We invest time and resources into ongoing education and market research, and our team travels across the country to attend trade shows, where we immerse ourselves in the latest technology available to run a better business and we learn about new products. This continuous pursuit of knowledge empowers us to bring fresh ideas and unparalleled quality to every project, ensuring that our clients receive designs that exceed their expectations.
“We recognize that the design process can often be overwhelming for clients. From initial concept development to purchasing and final move-in, we manage every detail, allowing our clients to focus only on what matters most. We handle everything for our clients, including the unprecedented number of damaged products we have all been seeing lately. In the end, the money our clients invest in us is not merely a fee; it is an investment in a stress-free, enjoyable design experience that transforms their vision into reality. We take pride in the meticulous attention to detail we provide, working closely with builders and architects to ensure that every aspect of the project is executed flawlessly. Charging a fee and fair markup is not just about profit; it is about delivering unparalleled value and creating extraordinary experiences for our clients. We believe that this approach not only enhances the final outcome but also fosters lasting relationships built on trust and satisfaction.” —Stephanie Kraus, Stephanie Kraus Designs, Philadelphia
These excerpts were originally published in the 2024 Interior Design Business Survey report, produced by Pearl Collective and Interior Talent in collaboration with Business of Home. Download the full report for more insights on the state of the industry.
