Interior Design Business: How To Avoid Undercharging

If you are just starting your own interior design business, one of the common mistakes you might make is undercharging for your work. This usually happens for various reasons:

1. Fear to loose potential client and thus quoting lower rate to win the project.
2. Lack of confidence and impostor syndrome (“I am not good enough, professional enough, experienced enough, etc… to charge more”)
3. Lack of experience in estimating the time needed to complete a scope of work.

As a result somewhere in the middle of the project you realize that you are basically working for free. Needless to say that this results in lack of motivation, frustration and decline in productivity.

Below are several tips on how to avoid undercharging in your interior design business:

• Keep a detailed record of your time for a project so that you will know in the future how long it actually took to accomplish the scope you offered.
• Add in 20% to the estimated time when you give a quote to a new client.
• Describe in detail the scope of work your flat fee covers in your LOA. Be extremely specific and mention which services are included and which are not.
• Then charge hourly if your work goes beyond this scope. Your hourly rate should be mentioned in your LOA as well. For example I include in my design package 2 visits to showrooms together with clients to select furniture and materials which can last up to 3 hours. Anything above it I  charge hourly.
• Specify in your LOA the amount of changes your client can make. For example, I say that clients are allowed to make 1 amendment in the proposed layout. Once it is confirmed every change is charged as X amount. The same goes for furniture and materials selection.
• Mention the terms for decision making. I specify in my contract that client has 3 working days to confirm the drawings after they were sent to him.
• You can use a new contract or an Addendum to your contract if you went beyond the scope of work you specified.  For example in my general LOA I mention that custom furniture design is not included in interior design package – if this service is required, a separate agreement needs to be signed.

How to handle if you feel you have undercharged your client:

• If your scope of work has not changed from what you spelled out in your agreement it would be wrong to go back to the client and ask for more money. In this case this is not the client’s problem, it is yours. You have to suck it up this time and be more mindful in the next job so as not to repeat it.
• If the scope of work has changed from what you spelled out in your agreement, you actually can get back to the client and discuss with him these changes. In that position you can and have the right to ask for more money for your work. Be confident and refer to the contract.

Have you ever faced the situation of undercharging your clients? How did you handle it? Please share your experience in the comments below.

If you would like to get more tips on growing your interior design business, check out my eBook called  “Marketing for interior designers“, where I highlight 23 effective marketing tools that will help you to get new clients.