Are you struggling to figure out the best way to charge clients for your design services?
In this episode, I dive into the hotly debated topic of billing methods for interior designers. With so many options—hourly rates, flat fees, square footage models—which one is right for your business?
As someone who primarily does residential remodeling, I found that hourly billing allows me to capture the unknown challenges that often arise on projects. However, I acknowledge that time tracking can be a tedious task. Believing that tracking your time is essential for the health of your design practice, I share practical tips on using time-tracking software like Harvest to streamline your process.
I also explore alternative billing models like fixed fees and cost-plus, explaining when those approaches may be appropriate.
Regardless of your chosen billing method, tracking your time is a critical business expense that will provide invaluable data to improve your profitability.
If you’re ready to take control of your design fees and ensure you are getting paid for every minute of your hard work, tune in now. This episode might be the solution you have been searching for.
Why you’ve got to check out today’s episode
- Learn the best billing method for residential remodels to help you capture all the work you put into a project
- Discover practical tools for time tracking making it easier to track your time efficiently and ensure you are paid accurately
- Avoid common billing pitfalls and ensure you are billing clients fairly and maximizing your profitability
Check out these episode highlights
01:55 – The Debate on Time Tracking
03:33 – Why Hourly Rates Work Best for Residential Remodels
Residential remodels often involve many unknowns and potential changes, making hourly billing a flexible and accurate way to capture all work done.
Hourly billing helps avoid frequent contract revisions due to project scope changes.
05:03 – Tools for Time Tracking
Harvest – integrates well with QuickBooks. Great for those starting due to its minimal cost.
Studio Designer – tracker within the software and with integration for accounting.
06:23 – The Importance of Tracking Your Time
To get paid for the time you work
To understand project costs and improve future estimates
To make informed decisions about project fees and business operations
07:54 – Alternative Billing Methods
Fixed Fees: Suitable for projects with a well-defined scope, like new builds or commercial designs. However, it is best to add a premium (e.g. extra 10%) to cover unforeseen extra time.
Square Footage Model: Works best for large-scale projects, either residential or commercial, where the time spent on detailed areas is balanced by less intensive spaces.
Cost Plus: A model where the designer acts as a general contractor, adding a percentage markup to subcontractor fees (not applicable in all states).
Recommendation:
- Don’t rely solely on furniture markups for fees. You should also be charging a design fee.
- Pick the method that is best for you based on your experience.
- For starting designers, go with the hourly method.
12:10 – Practical Tips for Tracking Time
Set reminders on your phone
Use time-tracking software tools
Don’t eliminate any time well spent on the project out of fear of client reactions
Use five-minute increments for tracking time to ensure accuracy
Recommendation:
- For starting designers, charging a minimum rate of $100 to $125 per hour.
- Be prepared to raise rates periodically to account for inflation and business growth
Next Steps
Grab your freebies:
- Furnishings Investment Guide
- Remodel Budget and Timeline Guide
- Your Roadmap to a Career in Interior Design
- 3 Things I Wish I had known when I Started my Career
Take a Quiz!
- Find Your Perfect Interior Design Style if you are curious about your design style
- Find Out What Type of Interior Designer You Should Be!
Join the Design Mentor to kickstart a successful career in interior design!
Check out the best books every interior designer should have here.
Email me at [email protected] if you have suggested topics
DM me on Instagram at @rwarddesign if you have a burning question
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Thanks for listening. I hope this helps you discover if interior design is the career for you. See you next week…