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Checklist for Financial Practices

Helpful Hints in Avoiding Costly Mistakes in the Interior Design Biz

This article serves as an extensive checklist, offering invaluable insights into the financial practices that underpin successful interior design projects. It underscores the importance of financial transparency, client trust, and the strategic approach designers take to avoid potential pitfalls in the intricate world of interior design.


Experience brings out different perspectives in business. You must always adapt.

We take great pride in our work for clients, but the path is not without its associated costs and considerations. Designers have to navigate a complex terrain, from hourly rates to unforeseen expenses, to guarantee a seamless and gratifying experience. By comprehending the financial intricacies and adopting best practices, designers and clients can collaborate in the process with ease, fostering success. This article provides a extensive checklist for understanding those financial practices.

1. Hourly Rates and Setting Expectations:

Interior designers typically charge clients on an hourly basis, with rates ranging from $75 to $300 per hour, depending on experience or market conditions. To provide clients with cost transparency and avoid potential disputes, it is recommended to establish a not-to-exceed amount for a project. This approach ensures that clients have a clear understanding of the project’s financial scope from the outset, minimizing the likelihood of discrepancies and fostering mutual understanding.

In order to establish a not-to-exceed amount for design services, a thorough understanding of the client’s needs, preferences, and the scope of the project is essential. This includes the size of the space, the extent of design work required, and any specific client requests. Sometimes, this isn’t easy to do, as all clients are not equal when it comes to decision-making. It is a designer’s responsibility not to undercut themselves by underbidding the competition.

As designers progress in their business, it becomes easier to judge clients and base estimates on past projects. The more experience gained, the better designers can assess the unique requirements of each client and tailor their pricing accordingly. This strategic approach helps designers avoid potential financial pitfalls and establish a fair and mutually beneficial working relationship with clients.

2. Cost Per Square Foot:

A designer can charge a cost per square foot rate rather than the hourly rate mentioned above. Typically I use this method for drafting services.

The pricing breakdown is as follows:

  • $2.50 – $6.00 p/sq. ft. for drafting floorplans and elevations.
  • $10.00 – $18.00 p/sq. ft. for a full-scope project, including finish selections, construction documents, and furnishings.
  • For a single-room project, such as a bathroom renovation, the rate may be a little higher.

  • 3. Deposits and Contractual Safeguards:

    Securing a deposit is a common practice in the interior design industry, and it serves as a commitment from the client. Designers often tie deposits to hours utilized, creating a fair system in case of contract termination. This not only protects the designer’s time and effort but also provides a financial safeguard in the event of unforeseen circumstances. It is crucial to ensure you receive a deposit, as there may be a considerable time gap between completing the work and receiving payment once an invoice is sent out – it could be weeks or even months before funds are received.

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    4. Cost-Plus Percentage vs. Percent off Retail

    Designers often utilize a cost-plus percentage on furnishings, a method that can become a bit intricate. Clients may easily tally up this percentage and express dissatisfaction, feeling they are overpaying for design services. Unfortunately, they may not perceive the designer as both a creative professional and a provider of discounted retail items. Their focus tends to be solely on the numerical sum.

    I advocate for designers to adopt a discount off retail pricing strategy, akin to practices observed in furniture stores. This approach promotes transparency and fosters trust with clients, steering them away from scrutinizing the designer’s profit margins through the cost-plus percentage method. By extending a fair discount, designers establish a straightforward and truthful pricing structure, cultivating a positive client-designer relationship. Clients generally find satisfaction in this approach, as they recognize the discount off retail serves as a balancing factor against the hourly or cost-per-square-foot fee.

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    5. Detailed Documentation and Review

    In an effort to mitigate misunderstandings, designers adopt a meticulous approach to document every aspect of the project. From intricate window treatment details to carefully curated finish selections, designers compile comprehensive proposals for clients to thoroughly review and sign off on. This methodical process serves to minimize the risk of miscommunication and ensures that clients remain aligned with their initial vision.

    Within the interior design industry, errors in purchase orders and vendor invoices are not uncommon. Recognizing the potential for costly mistakes, designers emphasize the critical importance of diligent review. Through a repetitive process of checking and rechecking purchase orders and invoices, designers can save both time and money. While purchasing errors and omissions insurance serves as a safety net, the thorough review process remains an invaluable practice, providing an additional layer of assurance for the seamless progression of the project. Don’t forget, always note there are no returns on custom orders.

    6. Prepayment for Furnishings and Shipping:

    Clients are typically required to pay upfront for all furnishings to facilitate the purchasing process. Shipping costs, however, can be unpredictable, necessitating careful consideration. To avoid surprises, designers advise clients to cover potential changes in shipping amounts, which are subject to fluctuations. Failure to settle all outstanding balances may result in delays or non-delivery of furniture, emphasizing the importance of financial responsibility.

    7. Setting Expectations in Delivery Dates and Dye Lot Variations:

    Establishing realistic expectations plays a pivotal role in the interior design process. Designers frequently avoid committing to specific delivery dates, recognizing that external factors beyond their control can influence project timelines. Moreover, clients are advised to formally approve swatches and finish samples, acknowledging the potential for dye lot variations. These two proactive steps serve to inform clients about potential discrepancies and align their expectations accordingly. In the event that the outcome falls short of expectations, this measure acts as a safeguard against potential legal action.


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    What is Designer's Corner?


    In this blog, tutorials, business advice, and shared experiences merge to guide the path for aspiring interior designers. The author, a seasoned interior designer with over two decades of experience in transforming spaces has encountered a myriad of clients, each with their unique quirks and peculiar requests. Here, the tutorials offer invaluable insights into the craft, while business advice extends a guiding hand to novices. Yet, it's the Designer's Corner where the past informs the present, and the future of design is shaped with every shared story. Embracing the industry's lighter facets, anecdotes are shared, and the occasional absurdity is met with laughter, fostering a community where designers find solace and wisdom in the collective journey. Whether you're a designer seeking affirmation, a client looking to hire, or navigating your own renovation project, this space can be a guide.