estimation

Pricing Strategies for Interior Design

Hourly

One strategy for pricing your interior design service is to bill the customer for hours worked. Although this method has its pros and cons, some customers are more comfortable working with this type of arrangement. Therefore, developing an appropriate hourly rate may be just as important as delivering a pleasing design to your customer.
There is no exact method for determining an hourly rate. However, a good starting point is determining the average cost of running your business per month (rent, supplies, advertising, seminars, travel, etc.) and dividing the total by the average hours worked per month. This yields an average hourly rate that only covers your costs -- also known as a "break-even" rate. Add a desired profit percentage to your break-even rate to calculate your desired hourly rate. For example, an Rs.8000=00  total monthly cost, divided by 160 hours per month, yields an average break-even rate of Rs.50=00 per hour, plus a desired 50 percent profit margin, equals a Rs.75 =00 desired hourly rate. Although you can research what other interior designers are charging in your area for comparison, it's more important to request a rate that covers your costs and gives you incentive to deliver the best possible work product to the market.

Total Project

With consumers becoming more budget-minded every day, charging by total project has become a popular pricing plan. Also known as a "flat fee," this pricing strategy is created by estimating the total cost of labor and materials for the job, plus your hours estimated to complete the job times your desired hourly rate, plus a contingency reserve for unexpected expenses that may crop up. For example: a bedroom suite with Rs50,000=00 of furnishings and installation costs, plus 160 hours of your time at Rs.100 =00 per hour would equal another Rs.16000=00, resulting in a minimum project cost of Rs. 66,000=00 . Adding a 10 percent contingency reserve would calculate to a Rs.72,600=00 total project price to the customer.

 

 

 

Cost Markup

Many interior designers opt for charging clients by totaling all the costs of labor and materials for the job, plus a markup percent age as the designer's fee. Also known as a "cost plus" price, this strategy allows a customer to purchase from any source and pay the designer the agreed markup -- which can vary by location, experience and reputation.

Trade Discount

Most interior designers have trade accounts established throughout the design community. These are retail outlets that offer a trade discount to the designer on all purchases placed with the supplier. Since the customer pays retail price, the trade discount becomes the interior designer's fee. For small, quick projects that don't take much planning or installation time, this strategy can work well. However, it relegates the designer to more of a buyer than a full-service practitioner and may not do much to build a unique reputation for valued expertise.

Square Foot

Commercial projects are often quoted by the square foot. Similar to a total project fee, the designer must accurately calculate the total price of the job (total cost of labor and materials for the job, plus the designer's hours estimated to complete the job times the desired hourly rate, plus a contingency reserve); then divide the total price by the total square feet of the space. For example: the rs.1,25,000=00  total price, divided by 400 square feet, equals rs.  per square foot.

Posted by:  
Swaroop Bapat
(Founder)
The Interior Master