“Is there an ideal billing structure?” she posits. Interior Design in New York, feels that operating a lucrative business is harder than one thinks. Heron has calculated that-on any project-her overall profit has to be a minimum of 42 percent of the budget to be profitable, a number that’s “hard to make when there is only so much time in a day-week-month and you have a cap on what you can physically bill out.” Not a fan of hourly billing (”I’ve lost years of my life to recording and totaling up hourly billing”), she says that “with a fee structure based on a percentage, I’m always covered.”īonnie J. This method has ensured that our accounts are up to date and we aren’t behind the eight ball on a project.” We collect this again at the time of ordering. She continues, “Almost always the scope increases, and our fee outstanding grows after installation as the add-ons inevitably happen. We collect the remaining 10 percent before we deliver and install.”
When we are ready to order product, we invoice for another 40 percent so before anything gets ordered we should have approximately 90 percent of our fee. Once that is determined, we collect another 40 percent. “We start off by collecting 10 percent to be retained, so that we can really work out the scope and budget. Once we get to a $1 million, my fee is 15 percent, and stops dropping there,” she explains, adding that she believes in total transparency with her clients. As the budget increases in $100,000 to $200,000 increments, the percentage drops. “For a project under $150,000, my fee is 25 percent of the overall budget. Meredith Heron, eponymous principal of a Toronto-based design firm, discusses how she charges a fee based on a percentage of the overall budget, much like a contractor. You can basically qualify your fees and the cost of product by the previous projects you’ve done with them.” If all aspects of the project are very clear and the team is of the highest caliber, then this can be a wonderful method for both you and your client.” He adds, “I’ve found this most effective on a second or third project with a client, when the trust in us as a firm is already there. In the case of the latter, he says, “The scope of work and deliverables both need to be extremely well defined and understood.
One approach he employs is a hybrid of hourly plus markup, and the other is a straight fee-based model. And if you have questions about a designer’s integrity, then what the hell are you doing working with them?”įrank Ponterio, principal of his Chicago interior design firm, bases his billing model on the scope of project and the client. It comes down to the integrity of the designer you're working with. Wolf continues, “Sometimes a certain type of client will say, ‘Well, aren't you going to buy more expensive things so you make more commission?’ And my answer to them is always no, because we're designing a project within a certain budget the client gives us.