Measuring your interior design company’s profitability

by | Oct 17, 2023 | Interior Design | 0 comments

Inflation is a reality every business has to grapple with, and it makes the already-complicated dynamics of pricing your own services even more confusing.

There are a lot of things business owners have to guess on or piece together over time – best practices for hiring, business operations, setting up a storefront, communicating with clients, and the dreaded task of pricing your services.

Pricing is made more complicated by the fact that the economy probably looks drastically different now than it did when you started your business, and it will continue to change over time. 

That means that when it comes to knowing what to charge for your interior design services, no one can make that decision but you. 

Your level of expertise, education, the cost of living in your area, and so many other factors determine what rates work best for your company. So rather than ask around endlessly, or pull a number out of thin air, you can consider your profitability and go from there.

You could spend days scouring the internet for advice on how to best price your services, but you’re going to get a lot of different opinions.

Rather than starting with a focus on pricing, our advice is to start with a focus on profit. After all, we believe that focusing on profits first is the best method for success and a realistic understanding of your business’ finances. 

Here are some ways to use a Profit First mindset as you price your services:

Compare the cost of a project to your price 

This is the simplest and best way to determine what your prices should be. Every designer’s process, sourcing locations, and workflow is different. Going off a predetermined pricing sheet can be a good starting place, but following it blindly only means that you’re using someone else’s metrics, not your own. Take a real look at whether you’re generating a profit, from the cost of your services to the end product. Do you have any money leftover to compensate for your expertise and work? Or are you scraping the bottom of the barrel to do the bare minimum for your client?

Notice your sales process

It’s a business owner’s dream to have endless positive responses to sales pitches, right? Well. Not quite. Maybe you’ve had the confidence-boosting experience of  hearing yes over and over again from prospective clients. 

It’s great at first, but eventually, you may start questioning whether it’s really a good thing for every single client to be ready and able to work with you, no questions asked. When everyone can say yes, it may be an indicator that you have a low price compared to the rest of the market, and that your competitors are making more. While having a steady influx of clients is great, you run the risk of working yourself ragged without much to show for it over time. 

Don’t bill after the fact

If your profitability is leaving much to be desired, does it have to do with the way you’re billing? Billing a client after your work is completed can create a laundry list of problems –including doing the work essentially for free, and potentially having to chase down the payment you’re owed. This is a situation we wouldn’t wish on anyone, and it’s hard to imagine that it could happen to you until you’re in the middle of it. But too many people get stuck in a cycle of sending endless emails and phone calls, trying to track down a client who owes money and refuses to pay it. This situation will rob you of your valuable time, money, and energy. This is one situation where playing it safe is the absolute best move. Be transparent with your clients about your up-front payment policy, and they’ll respect it. If they have a problem with it, you’re likely not a good fit anyway.

How to increase prices

Knowing that you need to raise your prices and actually doing it are two very different things. It’s overwhelming to consider making a change, especially if you have long-standing clients who may not understand why you need to charge them more for your services. It feels like a risk, and it is a risk…but it doesn’t have to be so scary. 

You can increase your prices slowly – you don’t have to drop a huge pricing bomb all at once! It can be a slow increase over time, one that customers will be able to acclimate to.
Your own self-worth
Owning a business is hard. We deal with imposter syndrome and endless DIY solutions – it can all make us doubt ourselves so deeply – especially as we try to determine what others should pay us for our work. But the truth is that the vast majority of the time, your expertise and work is worth so much more than you realize. You have permission to accept that.

Taking just one of these principles to heart and implementing it in how you think about pricing your services can make a huge difference in your own clarity about the cost of your interior design work. If you’re still unsure or confused about the best way to approach the profitability of your business, we’d love to help!



Lori Peterson


Lori Petersen

Lori Petersen has seen the frustration and loss that business owners experience when they don’t have command of their finances. Growing up, she watched her father work incredibly hard as a contractor. He’d come home late, eat the dinner kept warm in the oven, and do it all over again the next day. But it all came crashing down when he had to close the business and Lori’s family applied for food stamps. The business had failed and all of his hard work was for nothing. 

Today, Lori views every one of her clients as an opportunity to make this right. She firmly believes no one should work as hard as her dad did and not have a profitable business. No family should suffer because business finances were poorly managed. 

Lori has helped hundreds of business owners make sense of their finances, implement proven money management systems and create unimagined profitability for their business. She ensures they experience the return they deserve for their hard labor.

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