Are Your Interior Design Fees High Enough?
Many designers set their fees based on what their peers charge, and that is the wrong way to set your fees.
- How much do you want to earn per year? At the most, you will be able to bill 50% of your time if you are the CEO of your business, so if you work 40 hours per week, and take two weeks off for vacation per year, you might bill 1,000 hours. Some of your income will cover operating costs, too, so don’t assume you’ll earn $150,000 if you bill $150 per hour.
- What does it cost to operate your business, and what is your budgeted net profit for the year? Do you have a team? If so, it takes time to manage your team, and especially if you hire someone with limited experience and you’re the primary trainer, you’ll be spending a lot of your time training the new hire, so your fees need to be higher to cover the overhead of training.
- How experienced are you? If you have twenty years of experience with a strong referral base, then you should charge as much or more than your peers for your fees. Interestingly, if you raise your fees, then you may get more clients because you perceive yourself to be be better, so they perceive you to be better than your peers. You will not lose a significant amount of clients if you raise your fees. Start with new clients, and raise your fees at least 10%.
- How good is your work? Are you published frequently? That’s a key indicator of brand perception. If the magazines “endorse” you with articles about your work, then you should be charging at the top of the market.
- How well do you operate your business? Do you have a well-trained team and do you provide exceptional client service? That is worth a premium over your competitors.
- Do you have a strong online presence anchored with a cohesive brand image and well written website copy? This is another important variable in your fee setting plans.
- Are you confident? The first sale you must make is to yourself, and if you struggle with your own value, then you will have a difficult time charging higher fees. Practice, practice, practice. Once you can convincingly present your value, you’ll earn more money.
Many interior designers undervalue their skills, knowledge and brand value. Ask your friendly colleagues for their perception of your brand. Yes, it takes courage to ask, but it is worth the effort.
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