34. Your Design Fees: Value Created vs. Time Spent
Are you working way more than you want in your business while not making the amount of money you expect? Is your business generating the revenue you desire, but you still find yourself working more hours than ideal?
If either one of these scenarios resonates with you, you're likely deep in the mindset of trading dollars for hours, which indicates that you're under-earning in your business. Whether you charge your design fees by the hour or have a flat fee, this mindset leads you to set your fees in a way that results in overworking and under-earning. No amount of scaling your business, hiring help, or productivity hacks will solve this issue. The good news is, I know what will.
Listen in this week to hear why trading dollars for hours leaves you under-earning and overworking in your business, and why approaching your fees in a value-based way is the secret to creating change. I’m showing you what happens in your business when you overwork and under-earn, how to recognize the signs, and why it’s a disservice to you and the entire industry.
There are still a few spots left for the upcoming session of Out of Overwhelm! We kick off on July 18th 2023, so there’s still time for you to join us and get your planner and program guide in the mail. Click here to find out more!
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What You’ll Discover from this Episode:
2 ways trading dollars for hours is showing up in your bottomline.
What happens when you overwork and under-earn.
Why there’s no amount of scaling, hiring help, or productivity hacks that will solve for under-earning.
My thoughts on charging by the hour versus flat fee as it relates to trading dollars for hours.
What value-based pricing means.
How to solve for under-earning in your business.
Listen to the Full Episode:
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Full Episode Transcript:
Hey designer, you are listening to episode 34. In this one I’m going to be talking about under-earning, specifically how trading dollars for hours is showing up in your bottom line and how you spend your time. This is going to be applicable whether you charge by the hour or flat fee. You’re not going to want to miss this.
Welcome to The Interior Design Business CEO, the only show for designers who are ready to confidently run and grow their businesses without the stress and anxiety. If you’re ready to develop a bigger vision for your interior design business, free up your time, and streamline your days for productivity and profit, you’re in the right place. I’m Desi Creswell, an award-winning interior designer and certified life and business coach. I help interior designers just like you stop feeling overwhelmed so they can build profitable businesses they love to run. Are you ready to confidently lead your business, clients, and projects? Let’s go.
Hello designer, welcome back to the podcast. I actually outlined this episode while I was sitting out on the summer porch. Actually, we call it the summer porch, that was what our builder deemed it. I don’t know when else in Minnesota you’d sit out on a porch. But anyways, I was out on the summer porch. Fiber-Seal was here. And if you’re not familiar with Fiber-Seal, it’s fabric protection.
And I think that pretty much anywhere my kids touch is fiber sealed, because I need an indestructible home. And fabric protection is one of the ways I do that. It’s funny because the technician who arrived had been the person who had been here several years ago when we had our first dog, it was actually my only dog that I’d ever had. But this dog, Penelope, was the sweetest thing ever. And she also would get into every last bit of food. I mean, no matter how high you put it, how far back on the counter you put it.
And the technician that arrived was remembering Penelope and how she had gotten into some blue oil pastels that had been in the nanny’s backpack. So our old nanny when our daughter was young, she was a children’s book illustrator. And so she often had really amazing art supplies with her that she’d use with our daughter, which was great. But anyways, Penelope got into these oil pastels and started, of course, vomiting up this blue all over our house. Over my new rug, over the carpeting, I mean, everywhere.
But the amazing thing was the Fiber-Seal people, it had been protected, they got these blue oil pastels out. I mean, I could not believe it. So anyways, it was kind of like a little blast from the past when this man showed up to help me with current needs. Anyways, it was also kind of fun to be outlining the podcast outside, so maybe I’ll have to keep doing that.
Today, what I want to talk about is trading dollars for hours and this mindset and then the way that this mindset leads you to set your fees is creating a result of under-earning in your business. It’s also creating a result of overworking and also not creating the lifestyle you want in conjunction with having the business that you want.
And by the end of this episode I want you to know, if you’re under-earning in this way, I want you to be able to recognize the signs, know what to do to solve it, and start making money from the value you create, not from the time that you put in.
Before we dive into the episode I have a really important announcement to make. And that is that there are still a few remaining spots in this upcoming session of Out Of Overwhelm. We kick off on July 18th, so there is definitely still time for you to join us and get your planner and program guide in the mail and get started this summer so that you are finishing off the year so much stronger than you started.
As I mentioned in the previous episode, I’ve been playing around a lot in the last few months with leaning into what feels fun and generous in my business. And I had this idea to offer private coaching to my clients in Out Of Overwhelm. So what I’ve decided to do is to offer three VIP private coaching sessions with me for every client who joins this round of Out Of Overwhelm.
These sessions are going to be in September, October and November, which is going to be perfect because you’ll have already learned the foundations and we can dive into exactly where you’re at with the process and your goals. When we start the program, you’re going to set your goals for the six months of work that we do together, which is really setting your goals for the end of the year.
And this is going to be a great touch point to get that additional support because remember, this is a super intimate group to begin with. It’s limited to 15 designers. And on top of that, that’s going to be your opportunity to get even more individualized support from me, or even share something with me privately that you don’t feel quite comfortable sharing in the group. Whatever it is, these bonus private sessions are here to serve you.
And it’s going to be amazing for you as my client. And for me, it’s going to be incredible because anytime I can connect with my clients I absolutely love it. This is something I’m doing this round. I’m not sure if I’m ever going to do it again, so this is an incredible opportunity. If you’ve been wanting to join Out Of Overwhelm, if you also want some private coaching on top of that, you want to take advantage of that.
Now, I get it. I know that summer is busy and maybe you’re feeling uncertain about the economy and you kind of want to see what happens, I totally get it. And I know that the work that you do inside of Out Of Overwhelm is going to be the most impactful investment you can make all year. And it’s going to continue to impact you personally and professionally for years and years to come.
To join us, all you have to do is fill out a quick form on the program page, the link is going to be in the show notes. And you will tell me a little bit about your business, about you, your goals, why you’re interested in joining the program, and then that makes sure that this is a perfect fit for everyone involved. You’ll also have the option to schedule a consultation if you’d like to talk to me before you make a decision.
So go ahead, pause this episode, click the link in the show notes and get your form in now so that you can join me this summer and also claim those three VIP bonus private coaching sessions. Now let’s dive into the episode.
What we’re talking about today is the idea of trading dollars for hours and why this is resulting in you under-earning in your business. So what do I mean by trading dollars for hours? What I mean is thinking of yourself or charging for your design services based on the number of hours you work. The exchange is the number of hours worked for dollars billed.
And I want to be clear, this type of under-earning can show up whether you’re charging your clients by the hour or if you’re charging a flat fee. I even see this mindset showing up in how some designers are selling products. When I talk about under-earning, I define that as earning less than you want to make, earning less money than you’re capable of making and earning a disproportionately small amount of money compared to the value you create through the services you offer and deliver to your clients.
There’s really two ways that I see this show up with clients. The first is that there are clients of mine who are working way more than they want to be working. And when they look at the amount they’re making as an hourly wage, it’s low. And they’re kind of like, what am I doing this for?
The second scenario is when a client of mine is making the amount of money they want to be making or around there, but they’re still working way more than they want to be working. Both of these are indicative of the trading dollars for hours mindset, and indicative of under-earning in your business. I also want to say if you’re not clear on how much money you’re making, how you’re spending your time, where all that time is going, you’re likely also under-earning. And these are all reasons to join me in Out Of Overwhelm.
So what I want you to do is just take a minute and check in with yourself. Do you identify with what I’m sharing? And if so, which scenario resonates the most? The first being working way more than you want to work, and also looking at the amount you’re making and it’s way less than you want to be making. Or you’re making around the type of money that you want to be making, but you’re still working more than you want to work.
And as always, this is not a time to judge yourself. Get curious, because we want to first recognize how this is showing up. The awareness piece is really important. Without having the awareness, it will continue to be a problem. Not just in business, but in your life because when you’re overworking and under-earning it for sure shows up in how you care for yourself, your relationships and your overall quality of life.
It’s really exhausting to be in a position where you’re questioning if you can hire the support you know you need and continue to be stretched thin. Or you’re worrying a lot about taking time away from your business, whether that’s taking an actual vacation or if that means you’re not going to work tonight or this weekend. I know the majority of you get into this field of interior design because you love it, not because you think it’s going to be the most lucrative. But you have to remember that this is a business.
The purpose of your business is to make money. Yes, it’s to create incredible designs, to work on incredible projects, and it’s also your responsibility as the CEO to help the business make money. And that’s whether your family depends on you for the income or not. No amount of scaling your business, hiring help or productivity hacks will solve for under-earning. And that’s because it’s coming from that mindset of trading dollars for hours.
That mindset will follow you no matter what you do if you don’t address it. And it’s certainly a problem you can solve, which is why I wanted to bring it to your attention today. You have to acknowledge what’s going on, if this is present for you, so that you can change it.
I first noticed this was a pattern that I had as I was building my residential interior design practice. And I will say when you’re just getting started, there is that time where you’re building experience, you’re working with anyone you can get your hands on, right? You just want to get your feet wet. But as you get going, things shift.
And what I saw with myself was at first, when I started my business, I was shifting from being a commercial interior designer working for someone else, to being the sole proprietor of my own business. And I was learning a whole new set of resources. I was developing new relationships. I was setting up my own CAD templates. I was slow at things and there were a lot of new things to learn.
There was a huge learning curve, and that was to be expected. But once I had my footing, once I was really knowing my product, I was creating efficiencies in the business, I started to realize that the more my expertise and effectiveness in my role grew, the less I would actually be charging the client when I was charging on an hourly basis.
This became so apparent to me this one moment, it sticks out so clearly, when I was working with a client on their bathroom remodel. And I was going over some concepts thinking about things and it hit me and I was like this tile, this one at this specific showroom, this is the tile that needs to be in this bathroom. And what I realized was I had already made a selection in my head without actually even really doing any work or going to a showroom to look for things to source the samples.
And so then the trading dollars for hours thing became so clear of if I was going to be more efficient, if I was going to be more skilled, if I was going to be just charging for the time, I just cut a lot of time out of that design fee. And now I know a lot of designers weigh the pros and cons of flat fee versus hourly. And I have my opinions and thoughts on how both can work and really what you need to be aware of with each of these.
But when we’re talking about trading dollars for hours, a flat fee, if you structure it properly and have a very clear scope, set clear expectations and boundaries and uphold those, has a leg up here. And it’s because it allows you to charge for what I call value based pricing. When you price your design services based on the value of the result you provide to your client, and pair that with effectively managing your time, setting up systems, delegating where you get an ROI, all things you’ll learn in Out Of Overwhelm and I work with with my clients, you solve for under-earning and serving clients as if you are a paid hourly worker.
Before I go into more of what I mean by this, I want to be absolutely clear that I do not mean you are charging your value as a human. This is one of my issues with the phrase charge your worth. Charging your worth is not possible. No amount of money a client will pay you will compensate you for being the invaluable human that you are.
So let’s be clear, you’re not charging for the value of you as a human. You’re charging for the value of the result you create for your client. This was something I really started to understand as a designer, and now I understand it as a coach for my clients.
If we think about the value that I bring for my clients, it encompasses my background as a designer, both in the commercial and residential sphere and as a consultant. I was an NCIDQ certificate holder, LEED AP, held numerous leadership positions within ASID.
I also have experience that I bring in property management. I’m a certified life coach through the Life Coach School and about to get my master coach certification. There’s the years and years and years I’ve spent being my own best client and then the hundreds of designers I’ve worked with and seeing the patterns and learning how to help them better and faster and get better results.
So when I think about it for myself now, my clients do not pay me for an hour of my time. They pay me for all of the value I bring to the relationship and the value I help them create in their business and in their lives. And that’s just not when we’re working together, it’s the value that they’re going to go on to create because of the work that we’ve done together forever and ever.
I often like to think about it as you don’t want to spend more time with me. You want to spend less time with me, and then use the highly effective time we do spend together to go out and create your own amazing value in the world. Because as a designer, you create incredible value for your client.
One of my past clients, Sarah Montgomery, just sent out this great newsletter where she was reflecting on her own kitchen project that she is in the process of completing and being her own client. And she had this list that was talking about what a designer brings. And she was sharing this kind of from her perspective as a designer for her client, but also being her own client and her own designer.
And as I was reading it, I was like, yes, this is value, right? She was talking about the experience in the field of design and her previous experience. And the connections and relationships that she brings with the trades and the work rooms and everyone else you interface with as a designer. She mentioned the ability to problem solve. I know Sarah, she sources really high-quality products and unique products. So much value.
As I mentioned before, I see the trading dollars for hours showing up even in selling products because I think that a lot of designers are thinking, “Well, I’m just being paid hourly to shop for my client.” But that’s not true either. You have researched the brands. You’ve maybe paid to go to High Point or you spend time in your local showrooms to sit on things and see what each cushion feels like, what each depth of seat feels like.
Or you’ve looked at all of the wood finishes firsthand, so you know what the perfect one is. Or maybe you buy in volume from a select group of resources, so you might get better service or some other perk that is going to be an increase in value to the client.
You also have to think about your training, whether that’s formal school, or certifications, or just on the job training. That’s valuable, right? I think about my training as a designer in school and we had some sort of mock real life projects, but nothing compares to being on the job site. And then, of course, those skills that you’re bringing from past careers.
And now I’m going to call in all of you who discount yourself because design is a second career. There is so much value you’re bringing to the table that I see too many of you dismissing. What I want you to see is all of these components add to the value you bring. You’ve invested your time, your effort and money in creating all of this for your clients to benefit from. And if you only think about charging for the hour you’re actively working on the client project, you are under-earning.
We talked about all of the value that you’re bringing to the relationship and then we’re not even talking about the value you create for the client in their home and in their life. It’s a comfortable place to relax when they get home from working hard. Or it’s a place where memories are built around that big, beautiful kitchen island with the family. Or it’s that cozy cabin where the grandkids are going to spend summer holidays and the parents get a break.
When you start looking at your design fees based on the value of the result created versus time spent to create the result, everything changes. Now I know you’re wondering, okay, so how do I figure this out, Desi? And fortunately and unfortunately, there is no scientific exact way to do this. I say unfortunately, because I know a lot of you would love for me to just give you an answer and a little computation that you could just adopt, and I totally get that.
But I also want you to consider that this is the upside that there’s no scientific way to do this because you can drop trying to figure out what everyone else is charging. And you can drop all that second guessing that goes along with it and give yourself permission to look at and charge for the value you bring to your clients. You alone can give yourself that permission and I encourage you to start doing that now.
One side note I have to make here is that in case your head is going there, this is not a reason to not track your hours. You still need to do this so that you have a baseline and can also manage your workflow and project timelines. And again, if this is a challenge, you really need to join me in Out Of Overwhelm this July, I will help you with this. There’s actually a worksheet called projects and profits in one of the many bonus modules that I offer that will help you with this specifically if you want to work less, make more and be more profitable.
So what I want to do is go through some of the things that I’ve shared in this episode and start to think about what is the value of that? Your experience in the field. The experience you deliver to the client. How invaluable is it that you deal with all of that back and forth, all the things that go wrong, right?
The experience you deliver is so valuable. Your connections and your relationships with the trades, your ability to solve problems and not make it your clients problem. Exclusive, high-quality and unique product. Knowing exactly where to go for the right thing for their house. Or your training or skills that you bring with that are outside of the design field. And then the value for the client after the project is completed for years and years to come until they hire you again.
I promise you, if you start to look at the value of your services, versus the time spent on the services, whatever you’re charging for fees right now is going to start to look like an absolute steal. What a confidence boost. Go send those invoices you’ve been putting off or negotiating in your head immediately, once you start to think about it this way.
When you stop trading dollars for hours and stop under-earning in your interior design business, everyone wins. You’re going to be making more money, which means you’ll have enough support. You’ll have the office space you want. You’ll be able to take time off. You’ll be able to take care of yourself in whatever way that looks like for you. And your children and family or your friends will benefit from your presence and attention with them because you’re able to give it freely.
Your clients do not benefit from you under-earning. They benefit with value based pricing. This is because you’re able to provide a better client experience when you have appropriate support. You have time to work on systems so their projects run smoothly with less mistakes. You’ve got space and time in your calendar to source new products they’ve never seen at their friend’s house. And you aren’t burned out and resentful.
The end product is going to be better when you are no longer trading dollars for hours. I think it’s really common to start to feel maybe a little bit guilty when you focus on the money aspect of your business or there’s some other discomfort that comes up. We’ve really got to clear that up, whether that’s limiting beliefs around money or your willingness to receive and accept money.
This is a business and what you provide is incredibly valuable to the world at large. Think of the number of things you interact with throughout the day that have been designed that would not exist had someone not designed it. And then it’s so valuable to your clients.
This ended up being a little bit of a longer episode today, but I really wanted to dive into this because under-earning is a disservice to you. It’s not helping you have the business that you really want to have and serve the clients you want to serve in the way you want to serve them.
And I’d also argue that we should be looking at this as an industry on the whole because when you under earn, you normalize it for your peers. And you normalize the pricing and overextending yourself to the clients who hire design professionals. I really want you to set aside some time to think this through and consider if and how you want to adjust your fees. Definitely listen to this again, I know we covered a lot, and then share it with a friend who needs to hear it too.
That’s what I have for you today. And if this episode resonated, go to the link in the show notes and submit your form to join us in Out Of Overwhelm. It’s where you’re going to change your mindset around time and money and streamline your business for productivity and profit.
When we have our kickoff retreat, you’re going to have my support in setting your goals for the next six months of our work together so that you’re really clear on exactly what you’re focusing on with your time, energy and attention through the rest of 2023. And I know that that feels like a far way off, but summer always goes so quickly. And this is a way to avoid that post summer crunch of going, “Oh shoot, there’s only three months left of the year and there’s so much I said I was going to do and I haven’t done it.”
Plus, you’re going to get the three bonus private coaching sessions with me for even more personalized support. We kick off July 18th and I would love to support you. Next week. I’ll have a brand new episode, as always. And until then I’m wishing you a beautiful week.
I’m going to make the bold assumption that you enjoyed today’s topic. Let’s make sure you never miss an episode; follow the show now wherever you listen to your podcasts. If you haven’t already, I would really appreciate it if you’d make the time to leave me a rating and review. This is how I know what you’re loving so I can share more of it.
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Thanks for joining me for this week’s episode of The Interior Design Business CEO. If you want more tips, tools and strategies visit www.desicreswell.com. And if you’re ready to take what you’ve learned on the podcast to the next level, I would love for you to check out my signature group coaching program, Out of Overwhelm.
Welcome to The Interior Design Business CEO, the only show for designers who are ready to confidently run and grow their businesses without the stress and anxiety. If you’re ready to develop a bigger vision for your interior design business, free up your time, and streamline your days for productivity and profit, you’re in the right place. I’m Desi Creswell, an award-winning interior designer and certified life and business coach. I help interior designers just like you stop feeling overwhelmed so they can build profitable businesses they love to run. Are you ready to confidently lead your business, clients, and projects? Let’s go.
Hello designer, welcome back to the podcast. I actually outlined this episode while I was sitting out on the summer porch. Actually, we call it the summer porch, that was what our builder deemed it. I don’t know when else in Minnesota you’d sit out on a porch. But anyways, I was out on the summer porch. Fiber-Seal was here. And if you’re not familiar with Fiber-Seal, it’s fabric protection.
And I think that pretty much anywhere my kids touch is fiber sealed, because I need an indestructible home. And fabric protection is one of the ways I do that. It’s funny because the technician who arrived had been the person who had been here several years ago when we had our first dog, it was actually my only dog that I’d ever had. But this dog, Penelope, was the sweetest thing ever. And she also would get into every last bit of food. I mean, no matter how high you put it, how far back on the counter you put it.
And the technician that arrived was remembering Penelope and how she had gotten into some blue oil pastels that had been in the nanny’s backpack. So our old nanny when our daughter was young, she was a children’s book illustrator. And so she often had really amazing art supplies with her that she’d use with our daughter, which was great. But anyways, Penelope got into these oil pastels and started, of course, vomiting up this blue all over our house. Over my new rug, over the carpeting, I mean, everywhere.
But the amazing thing was the Fiber-Seal people, it had been protected, they got these blue oil pastels out. I mean, I could not believe it. So anyways, it was kind of like a little blast from the past when this man showed up to help me with current needs. Anyways, it was also kind of fun to be outlining the podcast outside, so maybe I’ll have to keep doing that.
Today, what I want to talk about is trading dollars for hours and this mindset and then the way that this mindset leads you to set your fees is creating a result of under-earning in your business. It’s also creating a result of overworking and also not creating the lifestyle you want in conjunction with having the business that you want.
And by the end of this episode I want you to know, if you’re under-earning in this way, I want you to be able to recognize the signs, know what to do to solve it, and start making money from the value you create, not from the time that you put in.
Before we dive into the episode I have a really important announcement to make. And that is that there are still a few remaining spots in this upcoming session of Out Of Overwhelm. We kick off on July 18th, so there is definitely still time for you to join us and get your planner and program guide in the mail and get started this summer so that you are finishing off the year so much stronger than you started.
As I mentioned in the previous episode, I’ve been playing around a lot in the last few months with leaning into what feels fun and generous in my business. And I had this idea to offer private coaching to my clients in Out Of Overwhelm. So what I’ve decided to do is to offer three VIP private coaching sessions with me for every client who joins this round of Out Of Overwhelm.
These sessions are going to be in September, October and November, which is going to be perfect because you’ll have already learned the foundations and we can dive into exactly where you’re at with the process and your goals. When we start the program, you’re going to set your goals for the six months of work that we do together, which is really setting your goals for the end of the year.
And this is going to be a great touch point to get that additional support because remember, this is a super intimate group to begin with. It’s limited to 15 designers. And on top of that, that’s going to be your opportunity to get even more individualized support from me, or even share something with me privately that you don’t feel quite comfortable sharing in the group. Whatever it is, these bonus private sessions are here to serve you.
And it’s going to be amazing for you as my client. And for me, it’s going to be incredible because anytime I can connect with my clients I absolutely love it. This is something I’m doing this round. I’m not sure if I’m ever going to do it again, so this is an incredible opportunity. If you’ve been wanting to join Out Of Overwhelm, if you also want some private coaching on top of that, you want to take advantage of that.
Now, I get it. I know that summer is busy and maybe you’re feeling uncertain about the economy and you kind of want to see what happens, I totally get it. And I know that the work that you do inside of Out Of Overwhelm is going to be the most impactful investment you can make all year. And it’s going to continue to impact you personally and professionally for years and years to come.
To join us, all you have to do is fill out a quick form on the program page, the link is going to be in the show notes. And you will tell me a little bit about your business, about you, your goals, why you’re interested in joining the program, and then that makes sure that this is a perfect fit for everyone involved. You’ll also have the option to schedule a consultation if you’d like to talk to me before you make a decision.
So go ahead, pause this episode, click the link in the show notes and get your form in now so that you can join me this summer and also claim those three VIP bonus private coaching sessions. Now let’s dive into the episode.
What we’re talking about today is the idea of trading dollars for hours and why this is resulting in you under-earning in your business. So what do I mean by trading dollars for hours? What I mean is thinking of yourself or charging for your design services based on the number of hours you work. The exchange is the number of hours worked for dollars billed.
And I want to be clear, this type of under-earning can show up whether you’re charging your clients by the hour or if you’re charging a flat fee. I even see this mindset showing up in how some designers are selling products. When I talk about under-earning, I define that as earning less than you want to make, earning less money than you’re capable of making and earning a disproportionately small amount of money compared to the value you create through the services you offer and deliver to your clients.
There’s really two ways that I see this show up with clients. The first is that there are clients of mine who are working way more than they want to be working. And when they look at the amount they’re making as an hourly wage, it’s low. And they’re kind of like, what am I doing this for?
The second scenario is when a client of mine is making the amount of money they want to be making or around there, but they’re still working way more than they want to be working. Both of these are indicative of the trading dollars for hours mindset, and indicative of under-earning in your business. I also want to say if you’re not clear on how much money you’re making, how you’re spending your time, where all that time is going, you’re likely also under-earning. And these are all reasons to join me in Out Of Overwhelm.
So what I want you to do is just take a minute and check in with yourself. Do you identify with what I’m sharing? And if so, which scenario resonates the most? The first being working way more than you want to work, and also looking at the amount you’re making and it’s way less than you want to be making. Or you’re making around the type of money that you want to be making, but you’re still working more than you want to work.
And as always, this is not a time to judge yourself. Get curious, because we want to first recognize how this is showing up. The awareness piece is really important. Without having the awareness, it will continue to be a problem. Not just in business, but in your life because when you’re overworking and under-earning it for sure shows up in how you care for yourself, your relationships and your overall quality of life.
It’s really exhausting to be in a position where you’re questioning if you can hire the support you know you need and continue to be stretched thin. Or you’re worrying a lot about taking time away from your business, whether that’s taking an actual vacation or if that means you’re not going to work tonight or this weekend. I know the majority of you get into this field of interior design because you love it, not because you think it’s going to be the most lucrative. But you have to remember that this is a business.
The purpose of your business is to make money. Yes, it’s to create incredible designs, to work on incredible projects, and it’s also your responsibility as the CEO to help the business make money. And that’s whether your family depends on you for the income or not. No amount of scaling your business, hiring help or productivity hacks will solve for under-earning. And that’s because it’s coming from that mindset of trading dollars for hours.
That mindset will follow you no matter what you do if you don’t address it. And it’s certainly a problem you can solve, which is why I wanted to bring it to your attention today. You have to acknowledge what’s going on, if this is present for you, so that you can change it.
I first noticed this was a pattern that I had as I was building my residential interior design practice. And I will say when you’re just getting started, there is that time where you’re building experience, you’re working with anyone you can get your hands on, right? You just want to get your feet wet. But as you get going, things shift.
And what I saw with myself was at first, when I started my business, I was shifting from being a commercial interior designer working for someone else, to being the sole proprietor of my own business. And I was learning a whole new set of resources. I was developing new relationships. I was setting up my own CAD templates. I was slow at things and there were a lot of new things to learn.
There was a huge learning curve, and that was to be expected. But once I had my footing, once I was really knowing my product, I was creating efficiencies in the business, I started to realize that the more my expertise and effectiveness in my role grew, the less I would actually be charging the client when I was charging on an hourly basis.
This became so apparent to me this one moment, it sticks out so clearly, when I was working with a client on their bathroom remodel. And I was going over some concepts thinking about things and it hit me and I was like this tile, this one at this specific showroom, this is the tile that needs to be in this bathroom. And what I realized was I had already made a selection in my head without actually even really doing any work or going to a showroom to look for things to source the samples.
And so then the trading dollars for hours thing became so clear of if I was going to be more efficient, if I was going to be more skilled, if I was going to be just charging for the time, I just cut a lot of time out of that design fee. And now I know a lot of designers weigh the pros and cons of flat fee versus hourly. And I have my opinions and thoughts on how both can work and really what you need to be aware of with each of these.
But when we’re talking about trading dollars for hours, a flat fee, if you structure it properly and have a very clear scope, set clear expectations and boundaries and uphold those, has a leg up here. And it’s because it allows you to charge for what I call value based pricing. When you price your design services based on the value of the result you provide to your client, and pair that with effectively managing your time, setting up systems, delegating where you get an ROI, all things you’ll learn in Out Of Overwhelm and I work with with my clients, you solve for under-earning and serving clients as if you are a paid hourly worker.
Before I go into more of what I mean by this, I want to be absolutely clear that I do not mean you are charging your value as a human. This is one of my issues with the phrase charge your worth. Charging your worth is not possible. No amount of money a client will pay you will compensate you for being the invaluable human that you are.
So let’s be clear, you’re not charging for the value of you as a human. You’re charging for the value of the result you create for your client. This was something I really started to understand as a designer, and now I understand it as a coach for my clients.
If we think about the value that I bring for my clients, it encompasses my background as a designer, both in the commercial and residential sphere and as a consultant. I was an NCIDQ certificate holder, LEED AP, held numerous leadership positions within ASID.
I also have experience that I bring in property management. I’m a certified life coach through the Life Coach School and about to get my master coach certification. There’s the years and years and years I’ve spent being my own best client and then the hundreds of designers I’ve worked with and seeing the patterns and learning how to help them better and faster and get better results.
So when I think about it for myself now, my clients do not pay me for an hour of my time. They pay me for all of the value I bring to the relationship and the value I help them create in their business and in their lives. And that’s just not when we’re working together, it’s the value that they’re going to go on to create because of the work that we’ve done together forever and ever.
I often like to think about it as you don’t want to spend more time with me. You want to spend less time with me, and then use the highly effective time we do spend together to go out and create your own amazing value in the world. Because as a designer, you create incredible value for your client.
One of my past clients, Sarah Montgomery, just sent out this great newsletter where she was reflecting on her own kitchen project that she is in the process of completing and being her own client. And she had this list that was talking about what a designer brings. And she was sharing this kind of from her perspective as a designer for her client, but also being her own client and her own designer.
And as I was reading it, I was like, yes, this is value, right? She was talking about the experience in the field of design and her previous experience. And the connections and relationships that she brings with the trades and the work rooms and everyone else you interface with as a designer. She mentioned the ability to problem solve. I know Sarah, she sources really high-quality products and unique products. So much value.
As I mentioned before, I see the trading dollars for hours showing up even in selling products because I think that a lot of designers are thinking, “Well, I’m just being paid hourly to shop for my client.” But that’s not true either. You have researched the brands. You’ve maybe paid to go to High Point or you spend time in your local showrooms to sit on things and see what each cushion feels like, what each depth of seat feels like.
Or you’ve looked at all of the wood finishes firsthand, so you know what the perfect one is. Or maybe you buy in volume from a select group of resources, so you might get better service or some other perk that is going to be an increase in value to the client.
You also have to think about your training, whether that’s formal school, or certifications, or just on the job training. That’s valuable, right? I think about my training as a designer in school and we had some sort of mock real life projects, but nothing compares to being on the job site. And then, of course, those skills that you’re bringing from past careers.
And now I’m going to call in all of you who discount yourself because design is a second career. There is so much value you’re bringing to the table that I see too many of you dismissing. What I want you to see is all of these components add to the value you bring. You’ve invested your time, your effort and money in creating all of this for your clients to benefit from. And if you only think about charging for the hour you’re actively working on the client project, you are under-earning.
We talked about all of the value that you’re bringing to the relationship and then we’re not even talking about the value you create for the client in their home and in their life. It’s a comfortable place to relax when they get home from working hard. Or it’s a place where memories are built around that big, beautiful kitchen island with the family. Or it’s that cozy cabin where the grandkids are going to spend summer holidays and the parents get a break.
When you start looking at your design fees based on the value of the result created versus time spent to create the result, everything changes. Now I know you’re wondering, okay, so how do I figure this out, Desi? And fortunately and unfortunately, there is no scientific exact way to do this. I say unfortunately, because I know a lot of you would love for me to just give you an answer and a little computation that you could just adopt, and I totally get that.
But I also want you to consider that this is the upside that there’s no scientific way to do this because you can drop trying to figure out what everyone else is charging. And you can drop all that second guessing that goes along with it and give yourself permission to look at and charge for the value you bring to your clients. You alone can give yourself that permission and I encourage you to start doing that now.
One side note I have to make here is that in case your head is going there, this is not a reason to not track your hours. You still need to do this so that you have a baseline and can also manage your workflow and project timelines. And again, if this is a challenge, you really need to join me in Out Of Overwhelm this July, I will help you with this. There’s actually a worksheet called projects and profits in one of the many bonus modules that I offer that will help you with this specifically if you want to work less, make more and be more profitable.
So what I want to do is go through some of the things that I’ve shared in this episode and start to think about what is the value of that? Your experience in the field. The experience you deliver to the client. How invaluable is it that you deal with all of that back and forth, all the things that go wrong, right?
The experience you deliver is so valuable. Your connections and your relationships with the trades, your ability to solve problems and not make it your clients problem. Exclusive, high-quality and unique product. Knowing exactly where to go for the right thing for their house. Or your training or skills that you bring with that are outside of the design field. And then the value for the client after the project is completed for years and years to come until they hire you again.
I promise you, if you start to look at the value of your services, versus the time spent on the services, whatever you’re charging for fees right now is going to start to look like an absolute steal. What a confidence boost. Go send those invoices you’ve been putting off or negotiating in your head immediately, once you start to think about it this way.
When you stop trading dollars for hours and stop under-earning in your interior design business, everyone wins. You’re going to be making more money, which means you’ll have enough support. You’ll have the office space you want. You’ll be able to take time off. You’ll be able to take care of yourself in whatever way that looks like for you. And your children and family or your friends will benefit from your presence and attention with them because you’re able to give it freely.
Your clients do not benefit from you under-earning. They benefit with value based pricing. This is because you’re able to provide a better client experience when you have appropriate support. You have time to work on systems so their projects run smoothly with less mistakes. You’ve got space and time in your calendar to source new products they’ve never seen at their friend’s house. And you aren’t burned out and resentful.
The end product is going to be better when you are no longer trading dollars for hours. I think it’s really common to start to feel maybe a little bit guilty when you focus on the money aspect of your business or there’s some other discomfort that comes up. We’ve really got to clear that up, whether that’s limiting beliefs around money or your willingness to receive and accept money.
This is a business and what you provide is incredibly valuable to the world at large. Think of the number of things you interact with throughout the day that have been designed that would not exist had someone not designed it. And then it’s so valuable to your clients.
This ended up being a little bit of a longer episode today, but I really wanted to dive into this because under-earning is a disservice to you. It’s not helping you have the business that you really want to have and serve the clients you want to serve in the way you want to serve them.
And I’d also argue that we should be looking at this as an industry on the whole because when you under earn, you normalize it for your peers. And you normalize the pricing and overextending yourself to the clients who hire design professionals. I really want you to set aside some time to think this through and consider if and how you want to adjust your fees. Definitely listen to this again, I know we covered a lot, and then share it with a friend who needs to hear it too.
That’s what I have for you today. And if this episode resonated, go to the link in the show notes and submit your form to join us in Out Of Overwhelm. It’s where you’re going to change your mindset around time and money and streamline your business for productivity and profit.
When we have our kickoff retreat, you’re going to have my support in setting your goals for the next six months of our work together so that you’re really clear on exactly what you’re focusing on with your time, energy and attention through the rest of 2023. And I know that that feels like a far way off, but summer always goes so quickly. And this is a way to avoid that post summer crunch of going, “Oh shoot, there’s only three months left of the year and there’s so much I said I was going to do and I haven’t done it.”
Plus, you’re going to get the three bonus private coaching sessions with me for even more personalized support. We kick off July 18th and I would love to support you. Next week. I’ll have a brand new episode, as always. And until then I’m wishing you a beautiful week.
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Thanks for joining me for this week’s episode of The Interior Design Business CEO. If you want more tips, tools and strategies visit www.desicreswell.com. And if you’re ready to take what you’ve learned on the podcast to the next level, I would love for you to check out my signature group coaching program, Out of Overwhelm.
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