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How do Interior Designers make money?

There’s a fair amount of mystery around how interior designers charge, what they do and what they are paid. We’re sharing the most common fee models, to give you a better idea of the types of designers, projects and fees available.

Interior design has a wide-ranging application from homes to offices, restaurants, events, homewares, set designs and more. Professionals within the industry come from many different backgrounds, often specialising in complementary services such as project management, upholstery design, etc.

Accordingly, there are many different business models used by interior design practices and also a great deal of choice when selecting a professional to work with.

The most popular fee structures:

Hourly fees

Similar to lawyers: a record of any time spent on a design (or other service) is kept and invoiced at an agreed hourly rate, at agreed intervals. Before undertaking work, the designer may estimate or set a limit on the hours required to complete a task. Different hourly rates may also apply for tasks dependent on the person undertaking the work and the level of skill required (as you pay more for a haircut with the director of a salon; less for a trainee cut.)

Note that the hourly rate charged meets much more than the designer’s salary – it needs to cover business expenses such as tax, equipment, office space, marketing and time spent running the business (not just design work).

This is a straightforward approach and means the client is paying for exactly what they receive. However extra work is required by the designer to accurately record their time and ensure that any agreed limits are not overstepped. It can be difficult to predict all time required at the beginning of a project, especially if the brief is quite loose. Often the fee will be quoted in stages. For example, detailed design time can be quoted accurately only when the concept design is completed and agreed.

Detailed design time can be quoted accurately only when the concept design is completed and agreed.
Absolute Project Management Director Cat Hoad and Design Director Liz Bell
With all fee models, good communication is key to ensuring transparency

Set fees

Similar to construction companies: the designer produces a detailed brief and provides a set fee to complete the work. The fee will typically be calculated by estimating how much time/ resources a project will require, plus a percentage in profit.

The fee proposal should clearly state what is (and isn’t) included within the scope, as well as a payment schedule. It may also set out how additional or repeated work will be calculated and charged for if required (for example if problems arise, the client changes their mind or extra work is requested).

This approach works well when the project brief is very well defined. It is less suitable when there are many unknowns/ items to be confirmed (as if often the case when renovating an older property), or a project party is prone to changing their mind/ the scope.

Percentage fees

Similar to architects: a percentage fee is usually charged on a range of defined costs. Typically, this is charged on any services, materials or build costs which are part of the interior designer’s scope to organise or oversee. This could be invoiced as items are confirmed, or at the end of the project.

This method works well and efficiently when there are lots of cost/ scope changes, as the fee automatically changes with the scope. Clients may be concerned that there is little incentive to keep to budget or reduce costs.  However, clients should be provided with options and explanations to help them make the right choice for their project – giving them ultimate control over the budget. Some professionals may also set a minimum fee with percentages applied on top for small projects which can require significant time and effort to organise.

Renovation project management
With residential renovations, there is often a lot to discover and finalise on site – and some clients want the flexibility to change the scope. Percentage fees may be more suitable than a set fee.
Project manager and building contractor looking at stair structure on building site

No fees/ procurement

Similar to a personal shopper: the design fee will either be minimal or free, on the assumption you purchase all products needed through the designer. The designer will then receive payment via trade discounts (in effect the designer buys the goods from a supplier then sells them as a retailer to the client) or through a referral scheme. Many online-only design services (with per-room fees in the low £100s) work on this basis.

The designer does not need to disclose the total they earn on the project but must explain exactly how they will be paid when you agree to work together.  Failure to do so can constitute a criminal offence under the Bribery Act 2010.

Clients may be concerned that the designer will recommend products based on their referral fee, rather than the correct product for the job. As above, designers should provide a range of options and a clear design rationale to help allay these fears. This approach tends to work best when the client is happy to sign up to the ‘look’ that the designer offers – as they will usually be fulfilled with their preferred suppliers.

APM don’t use this fee model as it doesn’t offer sufficient transparency to our clients.

Combination fees

Many businesses (APM included) will use one or a combination of the above structures, tailored to suit the project at hand. Many interior designers don’t advertise their fees online, preferring to discuss with the prospective client what the project will involve, before outlining the scope of services and an appropriate fee.

Formal Lounge finished in cream and gold styled by Absolute Project Management
Comfortable light living room with blue feature wall and fireplace designed by Absolute Project Management
Brightly coloured living room styled by Absolute Project Management

Is it worth it?

Interior design services come at a cost.  However, you’re paying for a professional service, which should enhance your home and save you money with good quality, long lasting design, avoidance of costly mistakes and trade discounts/ inside knowledge. A good interior designer will be able to outline the benefits and justifications of their service as part of their proposal.

Further reading – the British Institute for Interior Design is running a campaign, enthusiastically supported by APM, to improve transparency and eliminate illegal ‘secret’ payments to designers – here

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