How To Increase Your Interior Design Business Revenue This Year
It’s 2020, and time to kick off the new year and decade with a bang — by making more money than you’ve ever made before!
There are several ways you can increase your interior design business revenue, some easy and others … well, not so easy. And it shouldn’t come as a surprise that there is math involved — we are talking about adding up all those $$$ after all.
I promise it is all worth it in the end. The worst thing you can do is undervalue your services or — gasp! — give them away for free.
Let’s talk about how you can add more Benjamins to your books this year.
First things first, I do not recommend charging your clients by the hour. There’s always time you’re not fully accounting for and you usually end up paying yourself less than what your gorgeous designs are really worth.
That’s why I highly recommend using a value-based fee, which is a lump sum you charge for the entire project.
And guess what, clients actually love it too. They don’t have to deal with an invoice after invoice and there’s no surprise when they add it all up at the end of the project. With a value-based fee, your clients know exactly what they’re going to pay and exactly what they’re going to get.
One of my students in my most recent Designed for the Creative Mind™ Masterclass told me she more than tripled her fee for a kitchen design when she broke it down into a value-based vs. hourly fee. And guess what? Her new clients didn’t even blink - they signed the contract and wrote her a check!
It does take some time to figure out exactly what to charge, and I’ll dive more into that in another post soon.
Stick to your pricing model
When you figure out what your fee should be, it’s time to hit the gavel and stick with it. No negotiation, no nothing.
If your clients say they don’t want to pay quite that much, then you ask what part of the design can be left out. You are driving the bus here, embrace it.
Your price is your price, and you shouldn’t be trying to set it around your assumptions of how much money your clients have. Just because you walk into a gigantic million dollar home one day and a smaller, more conservative home the next day doesn’t mean the clients necessarily have different budgets — they might spend their money in different ways. And if they do have different budgets, then that’s no sweat either ... because you’ve set your price.
If you want to create another service that’s at a lower level then, by all means, do that and offer it to those clients who might not be looking for the “Platinum level” service you cater to. Just don’t lower your main prices because of it.
Invest in Financial Fridays
A handful of students in my last class told me something shocking: They weren’t sending all their invoices to their clients.
They were doing the work, but they weren’t collecting all the money they’d truly earned. Often, it was a case of them being uncomfortable asking for money.
Well, here’s the harsh reality: You are running a business, not a charity.
So send all your invoices — although (ahem) you should be able to cut down on them once you set your value-based service fee — and do so regularly. In fact, start doing them every week.
My own ritual for this is Financial Fridays. At the end of every week, I go through all my finances. I make sure my bills are paid. I make sure my invoices are going out. I make sure my cashflow is good.
And it’s not just about sending your invoices, but also making sure you’re following up with your accounts receivable — go ahead and get a little (respectfully), Guido, as needed — because that is money out there that is due to YOU.
Don’t overspend your time
Ask yourself: Are you spending longer on your projects than you’ve budgeted for?
If so, you need to figure out why, and adjust your value-based fee accordingly (because there’s no way you’re still charging hourly by this point of reading this blog post, right?).
After that, don’t spend any more time than needed. Get your butt in gear and remember that perfection might only be incrementally better than a really damn good design. And a lot of times, perfection is futile, anyway.
Charge for luxury
Don’t let anyone treat you like free salsa; you are guac, girl. This saying works for so many things in life, including pricing your design services.
You are providing a luxury service, so you should be charging luxury prices.
If you’re not a guac person (which makes me sad), then think of it in terms of cars. No buyer goes looking for a Mercedes or Maserati expecting to be able to haggle down to a Ford or Kia price. Sorry, ain’t happening because what you are paying for is LUXURY.
I can’t tell you what exactly to charge because every market is different, your experience is different, your software is different, etc. So you’ll need to do some work and some market research to figure out what to charge. But raising your rates is a great starting point.
Don’t accept every project
Be strategic. You don’t need to latch onto every project that comes your way like a barnacle to a pier. Look, your luxury designs are not going to work for everyone — and guess what, that’s OK!
If you’re going to charge the premium prices your business deserves, then you’re going to only be able to accept the premium jobs that come your way. And sometimes that means saying no to some jobs or creating a service at a lower level for clients who want a little bit less.
No, you are not a sofa salesperson just like you’re not a used car salesperson, but you can add another stream of revenue to your business by selling furniture to your clients.
I’m not talking about logging onto Wayfair and using your 20% discount and then charging the client full price either. I’m talking about partnering with vendors you trust and who only work with designers.
And guess what — you don’t need to feel sleazy about it or hide it from the client, either. I’m completely transparent with my clients and you can be, too.