Interior design billing methods can vary depending on the complexity of the project and the preferences of the Designer. One common approach is the hourly rate method, where Designers charge clients based on the number of hours spent on the project. This method is suitable for smaller projects or those with a less defined scope. Alternatively, a flat fee or fixed-rate approach involves establishing a predetermined cost for the entire project, which can be advantageous for both the Designer and the client, providing clarity and predictability. Some designers may also use a percentage or square foot method. Regardless of the method chosen, clear communication and transparency in billing are essential to maintain a positive client-designer relationship.
Understanding the different billing methods
1 / FLAT OR FIXED FEE
This is the most common pricing model in Interior Design. The designer charges a predetermined, fixed amount for the entire project or for a specific phase of the project. This fixed fee is agreed upon between the designer and the client before the project begins, there are no surprises. The designer and the client define the scope of the project, outlining the specific services to be provided.
PRO'S
Fixed fee billing provides clients with cost predictability, as they know the total cost of the project from the onset.
There is no concern about extra charges or overages, and the Designer doesn't have to worry about tracking hours
In the event that there is additional work required, a change order or addendum will be created to charge for the extra design work
CON'S
the client may assume that something is included in the scope of work, ensure you receive a detailed scope of work from the Designer
Any changes or additions to the original scope may result in additional charges, which should be discussed and agreed upon in advance.
Fixed fee models may lack flexibility when it comes to accommodating changes in project requirements. If there are significant alterations or additions to the scope, it may necessitate re-negotiation of the fee, potentially causing delays and complications.
2 / HOURLY
Charing clients hourly is another popular method for Designers to charge for their services, however it can leave uncertainty with clients as they may underestimate the time that is involved with designing a home. Setting expectations is crucial when billing your clients hourly, so there are no surprises or unwanted tension when your invoice arrives. Hourly rates vary greatly with Designers, you will want to know how long they have been in the industry, their qualifications, and what their markups are. Transparency is key when using the hourly method. You can expect to be charged anywhere from $150-$500+ per hour, the average being $200-250/hour.
PRO'S:
you are only billed for the time you use, this can be very cost effective for the client especially when it comes to smaller projects
the time spent with your Designer will be spent mindfully and efficiently & less revisions in order to avoid additional costs
client decisions will be made in a timely manner
everything is billable - phone calls, e-mails vendor enquiries, travel time, documentation, bookkeeping & admin
CON'S
all designers work differently and at different paces, it is difficult to quantify the hours required. A ton of work goes into designing a home, these hours add up very quickly and may even end up costing the client more than the other methods of charging fees
if you are unsure of your design style, require numerous meetings or revisions, this time will add up
the Designer has to track hours (I personally do not use the hourly method for this reason, I am not a lawyer!)
being concerned with billable time may take the fun & focus out of the design process for the client
weekly or monthly invoices = more billable time from your Designer
it may even give the Designer incentive to work slower on your project
3 / PERCENTAGE
The percentage of project cost method is based on the overall project cost. Percentage billing is a common method used by interior designers to charge for their services. In this billing structure, the designer charges a percentage of the total project cost as their fee. The total project cost includes expenses such as materials, furniture, labor, and any other relevant costs incurred during the design and implementation of the project. The percentage will vary between Designers due to location, market and project specifics, make sure to ask when your are researching designers to work with.
PRO'S
the client knows exactly what their design fees will be right from the beginning
This billing method is flexible and can be applied to various project types, whether it's a full-scale interior design project, renovation, or remodeling.
invoices are issued only at project milestones = less billable time from your Designer
CON'S
percentage billing is the most expensive method
there may be tension created because of the higher fees
trust may be compromised because you may wonder if the choices were made because they were the best design choice, or because it produces a higher fee for the Designer
4 / SQUARE FOOT
Square foot billing, or per square foot pricing, is another common method used by interior designers to charge for their services. This method of pricing is most commonly used for new build custom homes, large scale and commercial spaces. In this billing structure, the designer charges a fixed rate for each square foot of space they are working on. This method is often used for specific services, such as design consultation, space planning, or drafting. Square foot pricing can range between $5 per square foot, to $17+, depending on the inclusions.
PRO'S
as with percentage based billing, the design fees are easy to determine at the start of the project
provides comfort for the client that fees will not increase during the project
invoices are issued only at project milestones = less billable time from your Designer
CON'S
there are areas in the home that require very little design work but are still included in the square footage (hallways, bedrooms, etc) which means more fees for the client
If there are changes to the project scope after the initial agreement, the square foot pricing may not adapt well to these modifications. Additional work or unexpected requirements may lead to disputes over pricing adjustments.
often provides a broad overview of costs without breaking down expenses for specific tasks. This lack of detail can make it challenging for clients to understand the specific value they are receiving for their investment.
With any of the above methods, it is important to measure the value & expertise a Designer brings to your project. A well-drafted contract is essential to outline the terms and conditions of the fixed fee arrangement, helping to prevent misunderstandings and disputes. Designing your home should be exciting and as stress-free as possible. Hiring a Designer that no only designs but has a strong design process, is crucial to a well executed project.
If you need helping planning your next design project, please reach out. I’d love to discuss it with you!
