Understanding The Average Value of Your Interior Design Clients

Understanding the average value of your interior design clients is a key component any successful interior design business.

Why? Knowing this answer will  help you create your plan for the year.

Here’s how knowing the average value of your interior design clients will help you create your plan:

      1. Estimate how much your average client profit is.  Let’s just say that your average client does $30,000 of revenue with you.   The profit for that client is $6,000 after the cost of materials and overhead for your business not including your salary.
      2. Estimate the number of clients you work with in year:  Then ask yourself how many clients do you want to or can you successfully serve in a year?
      3. Calculate the number of clients you need to serve:  The average designer earns $40,000 per year. So you divide $6,000 into your earnings of $40,000, you see that you need around seven clients to make $40,000. Your gross profit should be be $210,000. This is a simple way to calculate a simple financial plan for your business. Doing this planning at the end or beginning of the year will help you set a goals for what you want to do each year in your business.
      4. Determine how many prospects you need to make your goal: If your average closing rate is 10% then you will need to meet with 10 prospects to get one client.  If you need seven clients next year, you need to meet with 70 prospects.  Divide that by 12 and you see that need to meet with about 6 prospects per month.

If you want to make more money in your interior design business you have essentially 6 options to increasing your bottom line.

  • Work with more clients
  • Improve your closing rate
  • Do more business with repeat clients
  • Have more sales conversations
  • Raise Your Rates

Gail Doby

2 Comments

  1. Cindy McClure, ASID, CKD, MCR, GCP on March 4, 2016 at 9:45 am

    I think that the math in this example is off a bit, or maybe the terminology….

    If you state that the average PROFIT on a $30K job is $6K without including salary, we would need to know how much of the job cost is dedicated to salary–the 6K only covers overhead and materials. If the designer is making and average of 40K a year you would need to additional 6K in each of the 7 projects to cover your 40K salary. Also, if the PROFIT on the jobs is 6K, the gross sales would need to be $210,000 ($30K job x 7) making the gross profit $42K but still not covering salary. To cover salary each job would need to be $36K, or approximately $252,000 in gross sales, no?

    Thanks!

  2. Rebecca on March 6, 2016 at 11:13 am

    So many designers don’t know the percentage of their overhead and are bad with numbers. I think it is easier to say that 25-30% of a clients budget is the designers. So if a client gives you a budget of $30,000 you should be spending $21-23,000 in furnishings, delivery, freight, etc. .

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