The Difference Between Markup & Margin

The Difference Between Markup & Margin

Today, I’m going to touch on some accounting principals, markup and margin. These are two terms that you may have to think about when you’re calculating profit and pricing in your business. These are numbers that you should be familiar with and how they play into your business because they can help with your profitability.

Markup and margin are not the same, even if occasionally you may hear them used in the same way.

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How to be Profitable in Interior Design

How to be Profitable in Interior Design

As a business, you deserve to be profitable. Running a business is a challenge and too often we settle for “just getting by”. We shouldn’t settle. We shouldn’t compromise on profitability. We shouldn’t allow ourselves to forget that we’re running a business and the goal of any business is to make money.

Otherwise we’re not running a business, we just have a hobby.

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When Clients Want to Buy Retail

When Clients Want to Buy Retail

When you buy retail, you buy at an inflated price.  Yet, more and more clients want to buy retail.  They want their furniture quick and easy.  Not to mention cheap.  But what they (and you) may not realize is that you're likely paying a much bigger "markup" on retail compared to the quality that you get than to-the-trade sources.  

Usually when buying to-the-trade the cost to quality ratio is much better.  Clients get more for their money.  They'll be paying a smaller markup to the designer rather than a large markup to the retailer.  

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Fee Schedule for Interior Designers

Fee Schedule for Interior Designers

A fee schedule is just a list of client fees that could occur in your business and charge to clients.  It is not necessary to have one, but if your pricing structure is complicated and you want to be transparent in pricing this is the way to go.

I'm 100% for clear, transparent, and simple pricing.  I think you should stop using markup and start showing your clients what you pay.  But I wrote about that in other posts already (just click on the links to read those!)  If your business is more complicated

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