At the end of my course, The Golden Blueprint, I do review calls with participants. In the last session of the course I had several review calls every day and I found myself giving the same advice most every call. So what was the question that everyone was asking about? Pricing. Or more specifically, how to make money as an interior designer.
We would talk about how they priced their services and how they charged their clients and ultimately there was one glaring mistake everyone was making in their design business that was costing them valuable income.
They were not charging for every hour they worked on a project.
It really is that simple. There isn't a Magic Pricing Model that will make you more money. The magic is not working for free.
So many designers don't track their hours and don't know how much time they spend working on projects. They may guess at the end of the day or the end of the month when they are doing their time billing. But humans are actually pretty bad at guessing at time. It's best, especially when you are just starting, to keep meticulous tracking of your time. This is the only way to know if you are making good money or slaving away your life.
Every designer I've spoken to about this admits that they cut hours from their invoices and give hours away for free. Sometimes this is necessary and will probably never be eliminated from your business. Sometimes they feel like something took too long. Sometimes they feel like their client won't pay for that many hours. Sometimes they feel like they don't want to be questioned about what they did for that many hours. Sometimes they don't know what they did for that many hours (take good records of your time and be able to back it up!). There are lots of excuses for giving an hour or two away.
But here is some crazy math that will make you think twice about giving hours (ie money) away for free.
Let's say you charge $125 per hour.
You also don't charge for ONE hour a week.
You are leaving $6500 on the table by skipping a single billable hour in a week.
Now let's say you don't charge for a measly TWO hours a week.
That is $13,000 you aren't getting.
If you up that to one hour a DAY?
$31,250. Thirty one thousand two hundred fifty dollars!!!
This my dear friends is why you aren't making money and feeling like your billing model lets you down. You cannot give time away. Any pricing model will work for you and allow you to make a good living wage if you can:
- You track your hours
- Make sure you are billing for every hour you work. (Most working hours should be billable).
Even if you are charging a flat rate or a square foot model, you need to know how many hours you can put in before you start to lose money.
Now, I could tell you how I price my interior design services and tell you that it is the best way and the only way, but that's not my style. I respect that we are all different and while it would be nice if the interior design industry could unite and choose one pricing model, it's not likely to happen.
So I created a free course: Pricing Strategy for Interior Designers to guide you through the question of how you should price. At the end of the 5 days, if you put in the work, you will be much clearer on how you should price. It's not going to spit out a Magic Pricing Model for you, but it will give you clarity and direction.