A practical approach to pricing full design services for modern interior designers.
Pricing is often one of the most daunting aspects of running an interior design business. Many talented designers—especially those just starting out—undervalue themselves massively. If you have ever found yourself questioning whether to charge a markup, how to handle trade discounts, or whether your hourly rate is truly reflecting your worth, you are not alone.
This guide breaks down a more transparent, profitable, and modern approach to structuring your fees for full design services, moving away from outdated models and towards a system that truly values your time and expertise.
The Problem with the Traditional Markup Model
For a long time, the industry standard has heavily relied on charging a fixed design fee plus a percentage markup (often around 10%) on procurement and contractors. However, this system is increasingly becoming a “dead system” for several reasons:
•Lack of Transparency: The markup model is often not transparent enough for today’s realities.
•Savvy Clients: Clients are more resourceful than ever. If they find the product themselves or bypass you to purchase it directly, you instantly lose your anticipated profit.
•Unreliable Suppliers: Trade discounts are becoming trickier to navigate, and some suppliers are more focused on making the sale than protecting the designer’s margin.
Relying on markups for your primary profit is risky. If the client gets the product directly, your compensation for the time spent sourcing and managing that product vanishes.
A Better Way: The Transparent Pricing Formula
For full design services (not just one-off consultations or partial services), a hybrid approach of a fixed fee and hourly billing is often the most honest and profitable way forward.
1. The Fixed Design Fee
Start by charging a robust, fixed design fee for the creative phase of the project. This fee should encompass the actual design work, concept creation, and spatial planning.
But how do you calculate this? You need to move past charging what you “humbly feel you deserve” and focus on building a profitable business. Your fee structure must account for:
•Your Desired Monthly Income: What do you actually want and need to take home?
•Business Expenses: Software, insurance, marketing, and travel.
•Taxes: Always allow for taxes in your calculations.
•Profit Margin: Aim to include an additional 10-20% profit margin on top of your costs and salary.
When you start breaking down these numbers, you might realise that an hourly rate you previously thought was high (e.g., £120/hour) is actually the baseline needed to sustain a healthy business.
2. Hourly Billing for Procurement and Project Management
Drop the markup on goods and instead charge an hourly rate for procurement and project management.
This means you bill for the actual time you spend:
•Ordering products and materials.
•Chasing deliveries and managing logistics.
•Communicating with contractors and tradespeople.
This method is entirely honest and transparent. The client pays for the exact amount of administrative and management work required to execute the design, and you are fairly compensated for every hour you work.
3. How to Handle Trade Discounts
If you are charging hourly for procurement, what happens to your trade discounts?
Never give away your designer discount freely.
Giving away your hard-earned discounts undermines the entire interior design industry. Instead, treat any profit made from trade discounts as a bonus on top of your design and procurement fees.
In larger London studios, profit often comes from negotiating better discounts and not sharing them with the client. While this can be trickier for small business owners to negotiate, the principle remains: keep the discount.
The Exception: Occasionally, if you absolutely want a client to have a particular product or material to make the design sing, you might choose to split the discount with them. However, this should be a strategic choice, not the default expectation.
The Secret to Pricing Confidence: Track Your Time
The key to making this formula work—and to forecasting an accurate estimate of hours for future projects—is knowing exactly how much time a project takes you.
If you are just starting out, estimating hours will feel tricky and you might wobble at the beginning. But if you meticulously track your time, you will become increasingly confident in your pricing.
Recommendation: Get into the habit of using a time-tracking tool. Apps like Harvest (or Toggl) are excellent for this. Install it on your phone and get used to switching it on and off between different projects and specific activities (e.g., “Design Concepting” vs. “Procurement Admin”).
Putting the effort into tracking your time and refining your pricing formula will pay off. While everyone’s final price will differ based on their unique financial goals, having a transparent, time-based structure ensures you are building a profitable, sustainable, and professional interior design business.
