interior designer checklist - Gail Doby
INTERIOR DESIGNER CHECKLIST: Avoid Fee Mistakes
Do you struggle with deciding how (or how much) to charge your clients? Do you wish you could raise your rates, but put off doing so because you aren’t sure people will pay? Have you ever thought…
I wish I could be a fly on the wall at my competitors’ business, so I could find out how she charges and how she runs her business? If you could, you’d know how to charge for yours. Right?
I felt that way for years!
Here’s the thing: setting your fees according to what your competitors charge will only lead to costly business mistakes and unhappy clients. Why? Because you aren’t setting your fees based on a logical justification. Therefore, you lack confidence. Your clients notice, and they’re more likely to negotiate or question your rationale. Unfortunately, they’re also less likely to see the value of your professionalism. How do I know that? I’ve experienced it. Years ago, I raised my fees in January because it was a new year and the cost of living and business operations was higher. Still, higher fees didn’t necessarily guarantee more profit because I lacked confidence when presenting them. That led to my prospects questioning my rationale and professionalism, and I missed out on opportunities for some great projects. Determining your fee structure is just one small step in the process of selling the fee to your prospects and clients … one small step in the process of attracting and landing more affluent clients. Once you’ve determined your fee structure, you must present it with confidence so prospects are willing to become clients. That’s where you come in. Unless you convince yourself that your fees are fair, profitable, and saleable—before you approach your prospects—you will find yourself struggling to run a sustainable business.
THE GREAT NEWS If you’re interested in earning a higher income, more easily, by attracting more affluent clients, you’re in exactly the right place, right now.
Let’s get started.
PG..2
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
We’ll begin by walking through some of the most common mistakes we see designers make, so you can avoid them and begin filling your business with the types of clients and projects you really want: 1. Confidence
Setting fees based on how confident you feel (or don’t feel). Many designers have “head trash” about fees, being valued, and feeling fairly compensated. Most of us have old money stories that impact us. Maybe you’ve even had conflicts with clients about your fees. Though you state your hourly rate, when it is time to invoice your clients, do you do either or both of the following: F Do you cut your hours because you’re worried that the client won’t pay the bill? When you “gift” them time that you’ve already invested in their project, it cuts your effective hourly rate and it diminishes your client’s belief that you’re worth the hourly rate you originally contracted. F Do you procrastinate when it comes to sending your bills, because you’re worried your client will get upset? If so, you’re making decisions based on fear of rejection, and in turn, you’re setting yourself up for being devalued, earning less and losing money.
2. Competition
Setting fees based on what you think other competitors are charging. It doesn’t matter what your competitors charge. Set your fees according to your cost of operations and the profit you want to earn. Here are a few questions to consider: F Experience. What is your level of experience? F Time. How long have you been in business (though isn’t your ability more relevant)? F Capacity. What level of projects do you do (size and quality)? F Published. Are you published frequently? F Busy. How busy are you? F Referrals. Do you get projects and referrals without asking? F Overbooked. Are you overbooked or struggling to get work? Again, your cost of operations and the level of profit you want to achieve are the most relevant aspects of setting your fees. Profit pays for the things that matter to you: your children’s college, family vacations, your retirement, traveling, etc. Yes, you have to consider what the market will bear, but you also need to have a rational basis for your decisions. If you confidently present your fees with clarity and conviction, you’re more likely to earn the income you deserve and require to operate a successful business.
PG..3
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
3. Covered
Believing hourly fees “cover” all of your time, and that you’re less likely to lose money than you would be if you offered a fixed fee. Fixed fees may actually be more profitable, especially when considering how so many designers devalue their own billings. The truth is, the majority of designers don’t actually bill all of their hours. For example, let’s say you bill $100 per hour. By the time you calculate the number of hours you work vs. the number of hours you actually bill at $100, then your effective hourly rate is discounted by the non-billed hours. For example, if you work 2,000 hours per year, you should bill a total of $200,000. But if you’re like most designers, you only bill $80,000. When you divide $80,000 by 2,000 hours, your effective hourly rate is $40. Apply this same calculation process to your employees’ compensation, and I have a feeling you’ll find that you’re paying for a lot of inefficiency in your company.
4. Clarity
Are you clear about your Vision, Mission and Goals?
Do you have well-conceived, and concisely written brand messaging? Does your visual representation fit the clientele you’re trying to attract? Do all elements of your brand connect with your values, and the values of the clientele you’re trying to attract?
5. Time
Tracking your time inaccurately.
If you’re “too busy” to track your time, could you be focusing on pleasing your client to the point of over-delivering and giving up your personal time and profit? Could you be a perfectionist who keeps working to your own detriment? That’s a recipe for burn-out, isn’t it? How about your employees? If you don’t value your time, and you don’t take the time to track your own time, then can you expect your employees to do so?
6. Hourly
Believing hourly fees are more acceptable to your clients than flat fees.
Many clients in today’s world become stressed when they see endless bills for time. It may seem easier to bill by the hour, but if you don’t track your time well, or you aren’t consistent, then your clients may start to question your professionalism. Also, there is a limit to what is comfortable for clients to spend on “time” vs. results. If you’d like to understand this concept better, be sure to sign up for our How to Avoid Fee Fiascos… and Attract Your Ideal Client webinar.
7. Proposal
Fearing that your clients will turn down fixed fee proposals because your fee proposals are high. If you have a frank and clear discussion with your clients about expected fee ranges, wouldn’t it be better for them to know what to expect before signing the contract vs. getting into the project and then finding out that your invoices for hourly fees are “out of control”? Getting fired isn’t fun, and this sets the stage for it. Plus, if a client hasn’t worked with a designer before, he or she may have completely unrealistic expectations about how long things take, and YOU are the one who will pay the price for educating them.
PG..4
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
8. Model
Not having a clear financial model and budget for your business.
This is the reason most designers struggle financially, give up, or go out of business. If you’re earning less than six-figures in your business, then you either don’t have a budget, don’t know your cost of operations, or you’re “flying blind,” hoping that more clients will result in more money in your business.
If you’ve found these tips helpful, and you’d like to learn more about earning more, more easily, join us for How to Avoid Fee Fiascos… and Attract Your Ideal Client. It’s our most popular webinar, and it’s complimentary! You’ll discover… đŏ $!ŏ)+/0ŏ!û! 0%2!ŏ3 5/ŏ0+ŏ 1%( ŏ (%!*0ŏ0.1/0ċ đŏ +3ŏ0+ŏ 00. 0ŏ (%!*0/ŏ3%0$+10ŏ/,! '%*#ŏ ŏ/%*#(!ŏ3+. ċ đŏ $ 0ŏ5+1Ě.!ŏ)%//%*#ŏ%*ŏ5+1.ŏ) .'!0%*#ŏ0$ 0ŏ +),(% 0!/ŏ0$!ŏ,.+ !//Čŏ and causes you to work too hard! đŏ * ŏ)+.!ċŏ
Warm regards,
“Natural gifts are undervalued by the people that possess them, and when they are undervalued by the possessors, they are also undervalued by others. Confidence attracts confidence.” – Gail Doby
Gail Doby Gail Doby, ASID, is the Chief Vision Officer of Design Success University and Gail Doby Coaching & Consulting. She is NCIDQ certified, and she is passionate about helping interior designers achieve six-figure and multi-six-figure incomes.
PG..5
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
Do you struggle with deciding how (or how much) to charge your clients? Do you wish you could raise your rates, but put off doing so because you aren’t sure people will pay? Have you ever thought…
I wish I could be a fly on the wall at my competitors’ business, so I could find out how she charges and how she runs her business? If you could, you’d know how to charge for yours. Right?
I felt that way for years!
Here’s the thing: setting your fees according to what your competitors charge will only lead to costly business mistakes and unhappy clients. Why? Because you aren’t setting your fees based on a logical justification. Therefore, you lack confidence. Your clients notice, and they’re more likely to negotiate or question your rationale. Unfortunately, they’re also less likely to see the value of your professionalism. How do I know that? I’ve experienced it. Years ago, I raised my fees in January because it was a new year and the cost of living and business operations was higher. Still, higher fees didn’t necessarily guarantee more profit because I lacked confidence when presenting them. That led to my prospects questioning my rationale and professionalism, and I missed out on opportunities for some great projects. Determining your fee structure is just one small step in the process of selling the fee to your prospects and clients … one small step in the process of attracting and landing more affluent clients. Once you’ve determined your fee structure, you must present it with confidence so prospects are willing to become clients. That’s where you come in. Unless you convince yourself that your fees are fair, profitable, and saleable—before you approach your prospects—you will find yourself struggling to run a sustainable business.
THE GREAT NEWS If you’re interested in earning a higher income, more easily, by attracting more affluent clients, you’re in exactly the right place, right now.
Let’s get started.
PG..2
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
We’ll begin by walking through some of the most common mistakes we see designers make, so you can avoid them and begin filling your business with the types of clients and projects you really want: 1. Confidence
Setting fees based on how confident you feel (or don’t feel). Many designers have “head trash” about fees, being valued, and feeling fairly compensated. Most of us have old money stories that impact us. Maybe you’ve even had conflicts with clients about your fees. Though you state your hourly rate, when it is time to invoice your clients, do you do either or both of the following: F Do you cut your hours because you’re worried that the client won’t pay the bill? When you “gift” them time that you’ve already invested in their project, it cuts your effective hourly rate and it diminishes your client’s belief that you’re worth the hourly rate you originally contracted. F Do you procrastinate when it comes to sending your bills, because you’re worried your client will get upset? If so, you’re making decisions based on fear of rejection, and in turn, you’re setting yourself up for being devalued, earning less and losing money.
2. Competition
Setting fees based on what you think other competitors are charging. It doesn’t matter what your competitors charge. Set your fees according to your cost of operations and the profit you want to earn. Here are a few questions to consider: F Experience. What is your level of experience? F Time. How long have you been in business (though isn’t your ability more relevant)? F Capacity. What level of projects do you do (size and quality)? F Published. Are you published frequently? F Busy. How busy are you? F Referrals. Do you get projects and referrals without asking? F Overbooked. Are you overbooked or struggling to get work? Again, your cost of operations and the level of profit you want to achieve are the most relevant aspects of setting your fees. Profit pays for the things that matter to you: your children’s college, family vacations, your retirement, traveling, etc. Yes, you have to consider what the market will bear, but you also need to have a rational basis for your decisions. If you confidently present your fees with clarity and conviction, you’re more likely to earn the income you deserve and require to operate a successful business.
PG..3
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
3. Covered
Believing hourly fees “cover” all of your time, and that you’re less likely to lose money than you would be if you offered a fixed fee. Fixed fees may actually be more profitable, especially when considering how so many designers devalue their own billings. The truth is, the majority of designers don’t actually bill all of their hours. For example, let’s say you bill $100 per hour. By the time you calculate the number of hours you work vs. the number of hours you actually bill at $100, then your effective hourly rate is discounted by the non-billed hours. For example, if you work 2,000 hours per year, you should bill a total of $200,000. But if you’re like most designers, you only bill $80,000. When you divide $80,000 by 2,000 hours, your effective hourly rate is $40. Apply this same calculation process to your employees’ compensation, and I have a feeling you’ll find that you’re paying for a lot of inefficiency in your company.
4. Clarity
Are you clear about your Vision, Mission and Goals?
Do you have well-conceived, and concisely written brand messaging? Does your visual representation fit the clientele you’re trying to attract? Do all elements of your brand connect with your values, and the values of the clientele you’re trying to attract?
5. Time
Tracking your time inaccurately.
If you’re “too busy” to track your time, could you be focusing on pleasing your client to the point of over-delivering and giving up your personal time and profit? Could you be a perfectionist who keeps working to your own detriment? That’s a recipe for burn-out, isn’t it? How about your employees? If you don’t value your time, and you don’t take the time to track your own time, then can you expect your employees to do so?
6. Hourly
Believing hourly fees are more acceptable to your clients than flat fees.
Many clients in today’s world become stressed when they see endless bills for time. It may seem easier to bill by the hour, but if you don’t track your time well, or you aren’t consistent, then your clients may start to question your professionalism. Also, there is a limit to what is comfortable for clients to spend on “time” vs. results. If you’d like to understand this concept better, be sure to sign up for our How to Avoid Fee Fiascos… and Attract Your Ideal Client webinar.
7. Proposal
Fearing that your clients will turn down fixed fee proposals because your fee proposals are high. If you have a frank and clear discussion with your clients about expected fee ranges, wouldn’t it be better for them to know what to expect before signing the contract vs. getting into the project and then finding out that your invoices for hourly fees are “out of control”? Getting fired isn’t fun, and this sets the stage for it. Plus, if a client hasn’t worked with a designer before, he or she may have completely unrealistic expectations about how long things take, and YOU are the one who will pay the price for educating them.
PG..4
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
8. Model
Not having a clear financial model and budget for your business.
This is the reason most designers struggle financially, give up, or go out of business. If you’re earning less than six-figures in your business, then you either don’t have a budget, don’t know your cost of operations, or you’re “flying blind,” hoping that more clients will result in more money in your business.
If you’ve found these tips helpful, and you’d like to learn more about earning more, more easily, join us for How to Avoid Fee Fiascos… and Attract Your Ideal Client. It’s our most popular webinar, and it’s complimentary! You’ll discover… đŏ $!ŏ)+/0ŏ!û! 0%2!ŏ3 5/ŏ0+ŏ 1%( ŏ (%!*0ŏ0.1/0ċ đŏ +3ŏ0+ŏ 00. 0ŏ (%!*0/ŏ3%0$+10ŏ/,! '%*#ŏ ŏ/%*#(!ŏ3+. ċ đŏ $ 0ŏ5+1Ě.!ŏ)%//%*#ŏ%*ŏ5+1.ŏ) .'!0%*#ŏ0$ 0ŏ +),(% 0!/ŏ0$!ŏ,.+ !//Čŏ and causes you to work too hard! đŏ * ŏ)+.!ċŏ
Warm regards,
“Natural gifts are undervalued by the people that possess them, and when they are undervalued by the possessors, they are also undervalued by others. Confidence attracts confidence.” – Gail Doby
Gail Doby Gail Doby, ASID, is the Chief Vision Officer of Design Success University and Gail Doby Coaching & Consulting. She is NCIDQ certified, and she is passionate about helping interior designers achieve six-figure and multi-six-figure incomes.
PG..5
©2017 Design Success University, LLC DesignSuccessU.com | GailDoby.com | 720.477.0378
