You have created a business plan and decided what type of company to form. You are beginning to establish your client base. Now is the time to consider how to establish a fee structure. You are probably beginning to wonder, How much do interior designers charge? What is the typical interior design fee structure? Should you charge an hourly rate, or should your design fee be by the room or by the square foot?
There are many methods of interior design services billing. We will help you understand the options and hopefully choose the one that is best for each of your projects.
Methods of Interior Design Services Billing
What do interior designers charge and what is a typical interior design fee structure? Interior designers provide such a wide range of services, it is often hard to know where to begin. One way to start is to consider the space size and the scope of the work involved for each project.
Below we discuss the possibilities. You might consider a mix of some of the options to provide more flexibility for you and your client.
Interior Design Consultation Fee
Interior designers often charge an initial consultation fee. Based on an hour of the designer’s time, it can range from $50 to $250. During this initial meeting, you find out about the scope of the project, as well as your client’s tastes, lifestyle and budget. Then you start putting together ideas for each room, which may include up to three concepts each.
Interior designers can choose to charge an hourly rate for limited services such as guidance and assistance with sourcing specific items, based on the time necessary for consultations and visits. The average hourly rate for interior designers ranges from $75 to $250, and even more. In general, if you are just starting out as an interior designer, you can charge between $75 and $125 per hour. After several years of experience, you can increase your rate to $150.
One drawback of charging an hourly rate is that is can be difficult to come up with a time estimate at the beginning of the project, especially if you are just starting out. If you do charge by the hour, you should include the fee in your contract together with a list of the work you will be charging for.
Flat Fee/Fixed Rate
A flat fee or fixed rate for interior design services is a common method for billing clients. However, especially for someone just starting out, it can present a challenge, because this method of billing requires you to calculate all of your expenses in advance. Keep in mind that clients can be unpredictable, and you may end up spending far more time on the interior design project than you originally estimated. For example, the client may decide to extend the scope of the project after you have begun your work. You can protect yourself by drafting a contract that covers you in such an event.
Charging by the Square Foot
On average, interior designers charge anywhere from $5 to $17 per square foot for their work, including consultation, design, project management, and material selection and procurement, with $10 being the average. This fee is separate from the cost of materials. While this billing method is more common for commercial interior design projects than for residential ones, it works well for large spaces such as living areas or master bedrooms. For example, at $12 per s.f., you would charge $2400 for a 200 s.f. kitchen. Some designers charge a square foot fee for their design services only, and add a percentage for the rest of their services.
Percentage of Project Cost
An interior designer’s percentage of project fee can range from 10% to 45%, although the average is in the 15% to 30% range. The project cost includes materials and furnishings, as well as contractor fees. You then add your design fees to this cost. A 20% to 35% mark-up on purchases and services is typical. If you choose this method, you should set up a payment schedule that aligns with the progress of the project. Of all the billing options, this is one of the easiest and most straightforward.
The process begins by providing the client with a cost estimate of the entire project, from furnishings and finishes to installation and contractor fees. Your interior design fees will be added to the cost of the project based on a percentage of the estimate. You are required to provide your client with copies of all vendor invoices, so you must be completely transparent.
Many interior designers offer a “design for a day” fee on their website. This is an excellent option for a small, specific project, such as furniture placement, color consultation, even a shopping trip. This fee, which is typically for eight hours of work, averages $600 to $2000.
This is a great option when you’re just starting out. It can easily segue into larger projects with satisfied clients.
Charging your clients per room is another easy billing option. You can charge a per-room fee for interior design work only, which can range from $500 to $1500 per room. If you charge for furniture, materials and finishes selection as well as your design work, your fee would go up to between $1,000 and $7500 per room. Living rooms typically cost double the amount charged for bedrooms.
As you can see, there are many options for establishing a fee structure for your clients. A lot depends on the scope of the project and the services involved. It is up to you to make sure the work you do is profitable and that your rate is a realistic reflection of your level of experience and the quality of your work. Remember to be patient: as you gain more experience and develop a reputation, you can increase your rates as your interior design practice evolves.