What Level is Your Design Business?

Take the Elephant Out of the Room In Your Design Projects: Establish Interior Design Budget Early

Take the Elephant Out of the Room In Your Design Projects: Establish Interior Design Budget Early

Yeah, yeah, I hear you. You hate talking numbers.

I used to be the same way, but now, I love it. Well, to be fair, I don’t actually love it, but I do love the end result of talking numbers with my clients or potential clients. For me, it’s a lot like exercising—I’m never really excited to do it, but I feel great when I’m done.

So here’s the deal: Half of what we do as designers is based around money. Literally half! We cannot design with the pretty things unless we know the clients want to buy these pretty things so the train stops here if we can’t get past this part.

For me, there are three factors that go into a client making the decision to hire a designer:

1. The “Pretty”

Meaning the client loves the looks you create and the furnishings you sell, so they hire you to create something special for them.

2. The “Level of Involvement”

How much time does the client want to invest in this project? If they want very little involvement, then Full-Service is a great option! If the client wants to be hands-on and involved in the project, then maybe a DIY package or E-Design would be a good fit.

3. The “Investment”

How many dollar bills is it going to take to achieve the two items listed above?

Ding Ding! You can’t get past “go” without budget being talked about, mapped out and agreed upon!

Recently I listened to Kim Merlitti on LuAnn’s Podcast, A Well-Designed Business®.

The episode was literally titled “Profitable Firms Build Estimates Before They Sign the Contract“… YES! Yes Kimberly, I could not agree more!

I was so thrilled to hear that others too found value in sharing the numbers up front! And I’ll be honest, I didn’t always do it this way.

It’s because I know that gut-wrenching feeling of sending that invoice or being afraid to tell the client how much the room of their dreams costs that makes me that much more passionate about establishing budget early in the design process.

When you take the money elephant out of the room, you really get to focus on why you’re there…. to solve their design problem!

So here’s how it works, for me and my firm at least.

It starts waaaaaay in the beginning, even before the Discovery Call. In my pre-call questionnaire, I ask, On a scale of 1-10, how much are you looking to invest in your project? Note: I didn’t ask them their budget, I asked them to RANK their budget.

Before I get on the call, I review the answer they provided me and know that this is a very subjective answer that needs to be discussed on the phone. One person’s “3” could be $100,000, while another person’s “9” might be $10,000. This means we need to dig deeper, but it’s still helpful to know how they perceive their own investment.

Next, I jump on the phone with them and learn about their design wants and needs, we dig deep into why we have arrived at being on the Discovery Call in the first place (i.e. Identifying their problem). Then, once I have a pretty good understanding of what they’re looking to do, the style they’re going for, and the level of involvement they’d like to have in the project, I can confidently say that  I recommend “X” design package for what they are looking to do.

I tell them that, on average, clients who hire us to do projects similar to the one they are describing are usually between $X – $Y. Then I wait quietly for their response. If it’s a simple, “Okay”, then we continue on. If it’s a, “Wow!”, “Oh…” or a “-gasp-” then I know I have some educating to do, which is totally fine.

Many times clients don’t understand how much things costs because they’ve simply never added it all up on one receipt before.

I will take a moment to help them understand our process and our design philosophy so that it all makes sense. I want my potential clients to make an educated, confident and calculated decision to hire me for that Initial Design Consultation, which will then lead into a full blown project.

I don’t want clients to get all the way through that consult only to find out we are not playing in the same financial sandbox and leave them disappointed—there is no value in that for either one of us!

If the Discovery Call goes well, we will do the initial Design Consultation and then send a Proposal with the flat design fee (I charge a flat fee based on the number of spaces in the scope of work) as well as the estimated furnishings and accessories investment.

I can calculate this fairly accurately because of my professional experience of doing this day in and day out, because I’ve walked the house with the client and laid eyes on the space, and because I can break down the products on a spreadsheet we created and show them exactly how I’ve calculated this high-level estimate.

We schedule a follow-up call to discuss their questions, concerns and next steps and, again, talk about the money! This way, by the time we get to the Letter of Agreement meeting, I can confidently state the estimated investment for the project, based on facts and figures I’ve discussed with the client, and we can project when that payment will be due in our process.

We now all know that eight weeks from our project start date, that’s about what you’re going to owe me. How cool is that?

By taking the financial elephant out of the room early, we are now all on the same page and can focus on the design.

This process also helps to eliminate the clients who won’t be a good fit before you get too deep in the process. If you can’t agree on budget, wouldn’t you rather find that out before you begin? Before you’ve spent countless hours on the project to find out they can’t afford or don’t want to invest that much? I know I would.

I recognize these conversations are HARD to have, but nobody said being the CEO of your design firm was going to be easy.

When it comes to investment, budget, money, whatever you want to call it, talk about it with potential clients early to ensure you are both on the same page. Like I always say, showing up is not enough! You have to do your home work, prep work, calculations, and planning to show up and be excellent.

The time you invest on the front end will serve you on the back end time and time again.  A big thanks goes out to Kimberly Merlitti for bringing this subject to light on LuAnn’s show. I think it was a great subject and a much needed conversation for our industry.

So, are you going to do it? Are you going to adjust your process to talk money earlier? Or are you going to continue to show up unprepared and afraid of what your clients might think when you tell them how much it all costs?

It’s up to you, but my advice is to show up prepared and be excellent!

(1) Comment
  • Catasha
    (8 November 2020)

    Great advice! It helps to see where you place this piece in your conversation and how effective it is.

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What Level is Your Design Business?