BUILDING YOUR BUDGET
- An Insight into Interior Design Fees -
One of the most important points in the planning process of a design project is evaluating and outlining your budget. This is no easy task, and we know how daunting it can feel. We totally get it! Money is often a point of contention, and it can be difficult to invest into something where you can’t see the end result at the onset. We’re here to help! Of course, every project is unique, and there are tons of variables that affect the overall project cost, but we wanted to give you a special peek into the process to help you understand what your money is going towards, and how your fees are calculated.
There is no fixed industry standard for determining fees, though there are several fee structures that are used in determining project costs. We can’t speak for every firm or designer, but we can at least give you some insight into where the numbers you see are coming from!
Hourly Rate:
Just as it sounds, an hourly rate is a fee charged for every hour of work. This is a very common fee structure which you are no doubt already familiar with from other services. Hourly rates are often used in interior design (especially on smaller projects or consultation-based scopes of work), as they have a large degree of flexibility. Generally, even with an hourly approach, an outline or estimation of hours at the onset of the project will be provided to help give an understanding of where the total hours will (likely) land, allowing you to cut back on or add hours where they’re needed.
Flat/Fixed Fee:
In this model, the designer will meet with you prior to the onset of the project and discuss your project goals, expectations, and scope to outline the project requirements. This gives your designer an idea of the potential tasks and requirements of the project, as well as an idea of how many details and the types of finishes, fixtures, and furniture they will be looking for down the line. From there, these numbers are taken and laid out into an estimation of hours, and used to calculate a fee for the overall project. This fee is then formatted into a proposal, outlining the expected tasks and associated fees, and acts as a contract for the design of the project. This fee is typically set and does not change, unless there are changes to the overall project scope or unforeseen site/project conditions that require a re-assessment of the fee.
Percentage of Project or Construction Cost:
Another common practice is to base design fees off a percentage of the overall project or construction cost. The resultant fee is directly proportional to the scale and complexity of the finished build, though can be tricky to assess “value”, as some projects may require more groundwork or preliminary research and development which is not always accounted for by the results alone. Though we use this number purely as reference and don’t typically use it to calculate our actual fees, we find that design fees usually land within 7-15% of the construction cost in our experience.
Cost Plus:
Cost plus is a fee structure related to the goods and services provided. In this model, the fee is calculated as a percentage of the purchased goods within the project (materials, furniture, fixtures, etc.). This model isn’t used as commonly on the design end as it doesn’t correlate as directly to the designer’s time (especially when it comes to planning, custom details, etc.), but it is often used in decoration or smaller projects where the scope pertains moreso to material selections and furnishings than core design and construction. The cost plus model is also used often in construction, as the fee percentage can relate more directly to procurement of materials and the associated labour + installation.
Value-Based:
A value-based fee is a niche fee structure wherein the fee is calculated based on the perceived value brought to the project by the designer, which can be negotiated and set based on the complexity and significance of the project rather than being directly proportional to the time spent or project’s cost. This model is less commonly used, but may be seen in larger scale projects or projects where the interior designer is brought on as an additional or secondary consultant, rather than project lead/prime consultant.
An important consideration is that these fee structures vary widely, and can change over time. Because there is no industry standard, every firm or office may have a unique approach to their billing and fee structures, as well as what services are provided within any given fee and the variables that lead them to a proposed number. Methods of payment can also vary widely between firms. You may be looking at lump-sum payments before or after a project, progress billings over the course of the project, or a cross between the two.
To expand further on fees and fee structures, we’ve compiled some considerations that may affect your choice in designer, as well as how they arrive at their fees, fee structure, and hourly rates.
Scope of the Project:
Project scope is the main consideration when determining the project fees. The scale and complexity of the project is directly related to the amount of time, energy, and expertise that will be required.
Time and Effort Involved:
For the more commonly used fee structures outlined above, your fee is a direct calculation based on the time and effort involved. Interior designers invest a lot of time and effort into planning, conceptualizing, detailing, sourcing fixtures and finishes, coordinating, and overseeing the project’s execution. Your fees are reflective of this time, and the care and craftsmanship put into the process.
Experience and Expertise:
There’s an old saying that goes “if you think hiring a professional is expensive, try hiring an amateur”. This is true across many disciplines, and applies to design as well. The value of experience can’t be overstated, and seasoned designers bring a wealth of knowledge, insight, and problem solving capability to every project they engage with. Their experience not only ensures a seamless design, but also elevates and ensures the quality and finesse of the final result. A senior or otherwise experienced designer’s fees may be higher to commensurate with their expertise, but you’ll undoubtedly be spending less time getting to your end result.
Professional Credentials:
Professional credentials in any industry are a badge of trust. In interior design specifically, a related design education is the foundation, with memberships and certifications to governing bodies of design acting as the highest standard of accreditation. Professional membership to PIDIM (Professional Interior Design Institute of Manitoba) and the NCIDQ Exam (National Council for Interior Design Qualification) are the highest accreditations locally. These accreditations signify that the designer has a professional-level mastery of their craft, a clear knowledge of building code, and a definitive understanding of how their designs impact their spaces and the people who use them. As such, designers with these accreditations may charge more for their mastery.
Unique Design Solutions:
Every firm and every designer approaches a project differently. Depending on your project, you may be seeking a specific type of charm, or maybe a specific firm’s style resonated highly with you. Based on the level of detailing or complexity of a project, your detailing may require extra creativity or ingenuity. As a result, your fees or the designer’s rates may be reflective of the exclusivity of these bespoke, tailor-made solutions.
Design Services Offered:
Your fees or a designer/firm’s rates may also be reflective of the breadth of skills and services at their disposal. Of course, not every skillset is required for every project, but depending on the designer’s level of involvement and the services provided (full-scope design, project management, graphic design, branding, etc.), the range of services may impact your overall fees.
Location and Market Demand:
Like many services, the cost of design also varies widely based on location and demand. Design is a luxury service, and each firm’s rates are reflective of the market they’re in and the value they bring to it. Locally, designers in Winnipeg will likely have different rates from firms offering similar services in Vancouver, Toronto, or any other city/country. This will vary further based on demand, and may align with prevailing market conditions and the allure of the locale.
Project Budget:
Having a budget in mind before going into a project is immeasurably valuable. Design fees should align with the overall project budget to ensure a harmonious balance between dreams and reality. Transparent communication between client and designer is critical, and allows for open and honest conversations about what’s realistic, what adjustments can be made, and what the best path forward is.
Legal and Administrative Considerations:
There are also some not-as-glamorous parts to design behind the scenes, and their administrative and organizational impacts may be reflective of the design fees you see. Contracts, insurance, and other legal considerations are vital for a smooth and secure design experience. These may be built into a firm’s fees, and are there ensure a solid foundation for the design journey.
As you can tell, there are a ton of factors affecting the fees you see. Interior design fees are the combination of a multitude of factors that come together to shape the magic of the design process. Transparency, communication, and a shared understanding between the client and the designer are key to establishing fees that truly reflect the value of the design journey. So, whether you’re embarking on a cozy makeover or a grand transformation, let the foundation of interior design fees be built on trust, expertise, and the shared vision of creating a space that reflects who you (or your brand) are and brings your dreams to life!