Why Design Fees Work Better
A couple of weeks ago, I was speaking to a group. Afterward, a designer approached me and said, “So, it’s your opinion that design fees are really better for designers than hourly.” I responded, “Well yes, for a whole slew of reasons, but I have to tell you the answer is also no.
No, it’s not an opinion. It’s the result of a whole bunch of research.”
I don’t make things up to put into my education programs. I go out into the business community, look at other industries and other businesses, and see how they sell their services. I uncover what works for them, and what those patterns are. I discover what people expect when they search for professional services.
The Importance of Establishing Your Design Fees
I take those pieces back us and our design businesses, and figure out how do we use that. That’s where design fees come from. It’s actually a form of bundling, you see it all the time. You get this service, then you get so many minutes of this and so many gigabytes of that. It’s a lot of different services combined. You may not even want all of it, but it sounds like a lot of value. If there’s something in there you want, and the price makes sense, you do it.
When you’re looking at design fees, you’re really doing the same thing. You’re providing the client a variety of things combined into one price. You might add in a few things extra that don’t cost you anything to make the offer juicier. Your clients will understand exactly what they’re getting as well as what it’s going to cost. They can easily agree to it, and you end up serving a lot more people.
As this “bundling” progresses into bigger jobs, you could look at a design-build job, where the bundle would be services for architectural drawings, lighting and millwork drawings, and architectural meetings to get started. The second piece of the bundle would be all the finishes and fixtures that go inside and outside. It would include the entire schedule of all the meetings, what has to be approved, and by when. Another piece to offer would be the construction support or observation that needs to be in there.
The last piece of the bundle would be the interior design, where you’re providing all the furnishings. When you add all four things in your bundle, it easily comes up to $43,000 or so, and it’s easy to sell. Now, some designers don’t believe that clients will pay you that much. They need to work on their mindset a little to understand. There’s a relationship between the total amount that the client is spending on the whole job, not just a few elements of the job, and your fee. In a way, your fee operates kind of like insurance. It reflects what they’re doing and what they’re spending while making sure it all turns out beautiful and appropriate and also enhances the value of their real estate.
When you combine these elements and understand what that relationship actually is, it starts making fees pretty easy. When you get a little clearer about what you’re offering and put time frames and boundaries in place, it works very well and predictably increases your income.
Design fees are not an opinion, they are actually a research piece that you will help you become more profitable and your business will operate better. Your cash flow will be better; your time will be better, and everything works better when you’re set up on fees. You’re not getting your strings pulled by somebody who thinks they own your time or wants to turn you into a purchasing agent or a personal shopper.
Getting Help with Design Fees & Elevating Your Business
If it’s important for you to not be in the same place a year from now as you are right now, then consider giving us a call so we can talk about this. We have two programs, the first is ‘Growth,’ and it’s all about getting clients and making money. It’s entirely focused on all the essential marketing pieces, and then signing up the client’s strategies.
Once you are really busy with clients, you’re ready for ‘Structure,’ which is the next level up. This program is about building a team and a business system behind you. That way, you can keep up your income and have a life at the same time. They’re both very successful programs, so if you want to learn what those programs can do for you and your business, click on the link below. You’ll get my calendar, and you can pick out a time that makes sense for you. We’ll go over all the details and see if it’s a good fit for you.
Until then, design something beautiful, and get paid what you’re worth.