fees

I have been a designer since 1994. I work for a small town firm that does residential and commercial design. We also have a retail showroom. Our design fee is based on an hourly rate. We order our products-fabric, furniture,etc.- directly from the sources that we have set up wholesale accounts with through our retail business. Our standard operations include charging a design fee for planning and then charging about 30% off retail for product since we get the product at "wholesale"; therefore, we make money on the fee end and then, stop the clock for purchasing and make money from mark up on the materials end (while not charging for time to do the purchasing, etc.). The problem is, now that costs have become so transparent due to the internet and with all of the discount fabric stores, etc., our "wholesale" prices are close to retail prices at these discount establishments. We can't compete with this! And we are losing business! We would love to have all high end clients and not have to worry about this but it is just not the case. We work with many budgets and must stay competitive.
My question is, how are people charging these days? I am thinking about dissolving our retail business completely because it is tanking. If I do, what type of mark can I put on merchandise that I purchase at "to the trade" or other establishments and still attract customers.
Thanks for any input you can offer!

senior designer in small town in Newnan, Georgia said: I have been a designer since 1994. I work for a small town firm that does residential and commercial design. We also have a retail showroom. Our design fee is based on an hourly rate. We order our products-fabric, furniture,etc.- directly from the sources that we have set up wholesale accounts with through our retail business. Our standard operations include charging a design fee for planning and then charging about 30% off retail for product since we get the product at "wholesale"; therefore, we make money on the fee end and then, stop the clock for purchasing and make money from mark up on the materials end (while not charging for time to do the purchasing, etc.). The problem is, now that costs have become so transparent due to the internet and with all of the discount fabric stores, etc., our "wholesale" prices are close to retail prices at these discount establishments. We can't compete with this! And we are losing business! We would love to have all high end clients and not have to worry about this but it is just not the case. We work with many budgets and must stay competitive.
My question is, how are people charging these days? I am thinking about dissolving our retail business completely because it is tanking. If I do, what type of mark can I put on merchandise that I purchase at "to the trade" or other establishments and still attract customers.
Thanks for any input you can offer!

I offer specific services to clients, an overall design package fee to the client for design service to plan space, design, specify or shop and make catalog recommendations. I have another package for archtectual drawings.

It is unfortunate that we have not been better protected by our professional organizations. Our significant purpose however is to assist the client by better space planning, experience in budgeting, and material selection. We charge for this or go to work for a furniture store.

I'm with you. Since posting my original comment we have decided to close our retail showroom and move towards a true interior design studio model.
We will still be selling product, but I think that coming from this angle we will attract more lucrative projects and, hopefully, price will become less of an issue.
Thanks for your comments.

I went to school for interior design and have a lot of experience working on real client design projects, but I am struggling with the 'business' side of the design business and I would really appreciate some concrete advice/answers. I just seem to be working and not making money so I get frustrated with the clients and then myself for under-valuing my time and work and then everything tanks.

I know all the different ways designers charge (I like either the hourly ($75/hr) + mark-up (20%) or flat fee models). But what I would like to know from more experienced and successful designers is what is reasonable in terms of: How long should it take me to do specific tasks and complete projects? How much should I expect to earn (on average) for each type of project (typical type of projects, even though I understand every client/project have their own needs & budgets).

Example: "I want to re-do my master bedroom or living room." Should this take me 10 hours or 40 hours? How many weeks or months? How many client meetings? How much avg. should I expect to earn (regardless of fee method)?

Example: Just bought a condo and need everything done?
Example: Want custom window treatments for 1 room?
Example: Need help accessorizing?
Example: Just need help with picking paint colors?
Example: Re-do a kitchen: floor plans, specifications, everything?

Also, do you set minimums for working with clients? And do you charge for travel time (I spend a lot of time going to and from clients, stores, showrooms and I have not brought myself to bill them for this time)?

Thank you in advance for your guidance. I appreciate your thoughtful replies.

Thank you,
Kevin

The best and only way to work with clients are these two options. First and foremost ask them what they are intending to spend on the room.
Both of these options are fair.

#1. Charge hourly, $100.00 (usually a dining room will take approx. 40 hours.)
#2. Show your client what everything is going to cost (your cost) and charge a 20% fee for your services.

For example: The dining room cost total with paint, furniture, lighting, drapes, a rug and some framed prints $24,000.00 taking 30% you would make $4,800.00

option #2. The dining room takes 40 hours of time for space planning, ordering materials, ect. you would make $4,000.00

My point is if the Client is only planning on spending $10,000. on her diningroom you absolutley have to charge hourly. It is time consuming; searching
for a dining room set a rug ect. for $10,000. not to mention you would do all that work for 20% No thanks! you would only make $2,000.00

If I was certain every week I would have a $10,000. room to work on then I would be fine making $2,000.00 a week why not? It's $8,000.00 a month total anual income $96,000. a year opps forgot to decuct that 33% tax to the Government. I take that back It would end up being a poor $64,320.00 Wow, What happens after November? We would only make around $45 thousand a year. Maybe we should stick to the hourly rate. I think I'll just move out of the country. ha ha

Of course not every week do we have Clients ordering $70,000. kitchens. We also have weeks on end where we are ordering a sofa.
It all works out in the end.

I hope this was helpful. My husband is a Custom Home Builder and does a lot of his pricing by the sq. ft.

Remember we spent so much time educating ourselves, internships.... for years, continuing education with ASID. Not to metnion it's your profession. You deserve it.

The best and only way to work with clients are these two options. First and foremost ask them what they are intending to spend on the room.
Both of these options are fair.

#1. Charge hourly, $100.00 (usually a dining room will take approx. 40 hours.)
#2. Show your client what everything is going to cost (your cost) and charge a 20% fee for your services.

For example: The dining room cost total with paint, furniture, lighting, drapes, a rug and some framed prints $24,000.00 taking 20% you would make $4,800.00

option #2. The dining room takes 40 hours of time for space planning, ordering materials, ect. you would make $4,000.00

My point is if the Client is only planning on spending $10,000. on her diningroom you absolutley have to charge hourly. It is time consuming; searching
for a dining room set a rug ect. for $10,000. Not to mention you would do all that work for 20% No thanks! you would only make $2,000.00

If I was certain every week I would have a $10,000. room to work on then I would be fine making $2,000.00 a week why not? It's $8,000.00 a month total anual income $96,000. a year. opps... forgot to decuct that 33% tax to the Government. I take that back It would end up being a poor $64,320.00 Wow, What happens after November? We would only make around $45 thousand a year. Maybe we should stick to the hourly rate. I think I'll just move out of the country. ha ha

Of course not every week do we have Clients ordering $70,000. kitchens. We also have weeks on end where we are ordering a sofa, or a set of blinds, possible weeks we have no work.
It all works out in the end.

I hope this was helpful. My husband is a Custom Home Builder and does a lot of his pricing by the sq. ft.

Remember we spent so much time educating ourselves, internships.... for years, continuing education with ASID. Not to metnion it's your profession. You deserve it.

The best and only way to work with clients are these two options. First and foremost ask them what they are intending to spend on the room.
Both of these options are fair.

#1. Charge hourly, $100.00 (usually a dining room will take approx. 40 hours.)
#2. Show your client what everything is going to cost (your cost) and charge a 20% fee for your services.

For example: The dining room cost total with paint, furniture, lighting, drapes, a rug and some framed prints $24,000.00 taking 20% you would make $4,800.00

option #2. The dining room takes 40 hours of time for space planning, ordering materials, ect. you would make $4,000.00

My point is if the Client is only planning on spending $10,000. on her diningroom you absolutley have to charge hourly. It is time consuming; searching
for a dining room set a rug ect. for $10,000. Not to mention you would do all that work for 20% No thanks! you would only make $2,000.00

If I was certain every week I would have a $10,000. room to work on then I would be fine making $2,000.00 a week why not? It's $8,000.00 a month total anual income $96,000. a year. opps... forgot to decuct that 33% tax to the Government. I take that back It would end up being a poor $64,320.00 Wow, What happens after November? We would only make around $45 thousand a year. Maybe we should stick to the hourly rate. I think I'll just move out of the country. ha ha

Of course not every week do we have Clients ordering $70,000. kitchens. We also have weeks on end where we are ordering a sofa, or a set of blinds, possible weeks we have no work.
It all works out in the end.

I hope this was helpful. My husband is a Custom Home Builder and does a lot of his pricing by the sq. ft.

Remember we spent so much time educating ourselves, internships.... for years, continuing education with ASID. Not to metnion it's your profession. You deserve it.

I've just moved to a smaller community and am working on a small residential project. In my previous city, I worked on larger projects and specified furniture to be purchased by a purchasing company - so time was easier to estimate. My new client is vague about her budget, I'm not sure how to structure the contract. Usually I do a flat fee for design and specifying, then a separate contract for the project management if necessary during construction.

Should I charge a flat fee for space planning and finish selection (paints, tile, etc) and a markup on the furniture? My concern is this is a new client and I don't know how indecisive she'll be about the furniture. She is hesitant to go hourly because she worked that way with another designer and costs got out of control. If I charge cost plus for furniture, will this typically cover one's time shopping, selecting and coordinating delivery?

Thanks so much for these detailed replies. It is a relief to discover that I am not alone in the issues I've been grappling with on the business side.

A service I am offering is design coaching -- which is helping clients identify their style and general palette, then coaching them through the process... e.g., rug first, room arrangement, examples of furniture style, how to see the bulk, etc., and then weighing in on their finds. When enough items have been found, I arrive to help clients place them effectively.

These clients typically need flat fees. I am in the process of discovering how much time to estimate for myself given client differences in skill and decision making, but have yet to be satisfied with my efforts to do well by my bottom line. Have any of you gone this route and have advice to offer?

Thanks so much,
Sky

I worked for a homebuilder and was laid off in January, so now I'm trying to build up my own business with design work. And I'm also struggling to figure out how to charge people as every job is so different.
The homebuilder that I worked for is still contracting me for small jobs here and there. They have asked what I would charge to furnish a new model home. While I worked for them, I sketched a furniture layout and also did a preliminary budget for all. So now, my question is, what would you suggest I charge for furnishing it now that I am not employed by them? An hourly shopping fee? Then an hourly install fee for the days I'm installing and accessorizing? Any comments would be greatly appreciated!
Thanks!