The Wrong Way to Set Fees
By Gail Doby, ASID
CVO & Co-Founder, Gail Doby Coaching & Consulting & Design Success University
Undoubtedly, the question I and other experienced designers get most often from those who are launching their own businesses or looking to upgrade their clientele is, “how much should I charge?” It is a question not easily answered. There are no industry standards for fees, and what designers charge varies considerably based on a number of factors, not all of them quantifiable. Plus, good business practice frowns on designers sharing information about fees, to avoid any appearance of collusion. So it is no wonder that designers are often as confused as their clients as to what is a reasonable or proper fee.
While, for the reasons stated above, I can’t provide any specific numbers, I can offer some guidance. A good place to start, I think, is talking about the approaches one should avoid. The first seems on the surface the most logical: find out what your competitors are charging and charge the same. The flaw in this approach is twofold. First of all, it is highly unlikely that you and your competitors have exactly the same qualifications, level of experience, business model, clientele, etc. You are comparing apples and oranges. Secondly, do you know from the client’s perspective who your competitors are? From a purely budgetary standpoint, they may not be a designer at all but a contractor or the decorator in a furniture showroom.
For much the same reasons, you don’t want to pick a number at random. It’s tempting to do some web surfing to try to find out what other designers are charging, or to ask friends or associates what they would be willing to pay, and then guesstimate what might be an appropriate fee for you to charge. A fee is not a magic number. You are business planning in a vacuum.
To arrive at a sustainable fee structure you need to consider what is your cost of doing business, the number of hours you plan to work, the number of hours you will be able to bill for your time and services, the types of services you will provide, what level of profitability is comfortable for you, and who your clientele is. Doing so will lead you to the right fee for you. And in the end, that’s the only one that matters.
Re: setting fee structures, I agree with all of the listed items you mentioned. What is your education, experience and abilities. Then add are you a liscenced by the state interior designer. However keeping in mind what the area will allow is important, we can not price ourselves out of the market. This is a difficult subject for all of us however I beleive the more we share the better we are as a industry!
Thank you for being at fore front of topics we all need to have open discussions with.
Thank you for addressing design fee issues that seem to be a faux paus. I have always had to evaluate the client before I decided the fee or how I will charge. If we understand how each of our fellow
designers work we could possibly create a strong network!
I agree, Diana. Our community is very helpful, and I think you’ll find that you can ask anything here and get support.
Such wisdom, thanks for reminding us that we need to use our own wisdom in deciding on our fees, and not to try to copy others who may not be doing the same type of design work that we are.
It is so important to have a “reason why” your fees are what they are. Thank you for your comment.
Great article! I also see my feed as a relief to clients who have offers from their architects to do the interior 1/3 more than what I charge and can’t do the work as efficiently since they are not doing enough interior design to do so.
I always found that my fees were higher than the architects (which didn’t make them happy). Your experience will always prove to be very valuable in charging higher fees.
Thanks, Gail , for the insights. I remember once I was having lunch with a friend, and I was complaining about how busy I was, She suggested I go up on my fee. I did, and there have been no negative consequences: Only the positive one of making more money!
Isn’t that great, Kathryn? I did the same thing many times and never lost the clients I wanted. It’s about believing you’re worth it. Good for you!