Designer Business Tip – What About Engagement Fees?

Well now, as we move forward from the craziness, excitement, and fear that we’ve missed something important at Spring Market, we would like to lighten things up a bit. Besides, we can’t work that hard ALL the time, right? And so, we have a quick designer business tip on charging your design clients an “engagement fee”. (You know, a trivial little subject that hardly matters!)

According to Sean Low, “the go-to business coach for interior designers” at BusinessOfHome.com, for designers who know their value, an engagement fee is a must. However, those who doubt themselves and continue to “hustle” for design projects like a newbie might want to reconsider.

(If there’s one thing we know about Mr. Low, it’s that he pulls no punches.)

Are You Worth It?

Answering the above question depends largely on you. If you’ve established a solid reputation as a designer who delivers what you say you will, dependably and creatively, why would you think otherwise?

As Mr. Low says, “Your talent, wisdom, and experience have intrinsic value and deserve to be recognized (and compensated). Your willingness to dedicate the time necessary to fulfill your … promises needs to be appreciated and paid for. That’s where an engagement fee comes in. It’s not a deposit or retainer; it is a fee for your talent and attention that goes against nothing and is non-refundable.” (emphasis added)

In other words, they are paying you – for you – and all that may include!

“If you ask a client to invest a significant sum in you to create the transformative environment they seek, the more likely they will give you what you need to make the transformation happen. As much as they are investing in you, they are investing in themselves. Once invested, you will be better able to receive the kind of information you need to create as you must.

What Do You Owe After the Fee?

“You do not owe your clients anything other than your best work. You have nothing to prove, only the willingness to share your talent, wisdom, and experience with those clients [who] truly care about your work and how it will come to be for them.”

He concludes with, “While a significant engagement fee might make your firm more money, that is not my ultimate aim. Instead, I want you to establish a relationship dynamic from the very start that will yield the greatest opportunity for success.”

There now. How was that for a lightweight, frivolous topic following the hectic week at Spring Market? You’re welcome!

And remember, Ted remains available for questions and answers about things like charging an engagement fee and other designer business tips to help you grow your business. With more than a quarter century in the business, Ted has the experience and knowledge to offer high-quality business consulting to the trade. Simply… Get in touch with TD Fall today.

Interior Design Budgets – A Designer’s Nightmare Come True

Too often, discussing interior design budgets with potential clients can be a nightmare. So many homeowners think they know what a job is worth yet may not have the knowledge to understand the full range of steps needed to match their dreams. So, while they feel like they “know” what a project should cost – and that may be all they’re willing to spend – it’s your job to educate them about their misconceptions and help them move toward a more realistic number.

Yeah, waking from that nightmare is a huge relief!

Take Command of Conversations About Interior Design Costs

Good thing for us, the folks at Business of Home corralled five interior designers to explain how they deal with unrealistic expectations about design costs with their clients.

Needless to say, it all begins with communication and education with plenty of follow-up during a project, if you’ve accepted the job. Then too, it may not be worth your time, energy, and frustration of the budget is unrealistic. Sometimes, as you’ll soon see, you just need to say, “No thank you”.

This is true for Robin Gannon of Robin Gannon Interiors in Lexington, MA:

“Sometimes that’s just what their budget is, and they’re not a fit for us. As a firm, it’s important to understand what you do and what you do well. You can’t sacrifice the quality of what you do simply because of somebody’s budget.”

The same is true for Helena Brana of Brana Designs in Corona del Mar, CA:

“Transparency with our clients is one of our founding principles. We discuss clients’ budget expectations very early in our communications and estimate costs based on our experiences with comparable projects. [Not all] clients are the right fit for us, and it’s better for everyone to find out early to avoid disappointments later on.”

Adjust Your Design Clients’ Expectations

Doing this is a priority for Daniela Holt Voith of Voith & MacTavish Architects in Philadelphia, PA:

“We seek to set client expectations not just about budget, but also about schedule and fees. We can design a beautiful, functional project for a client based on all the listening in the world, but if it’s not in the budget, it’s a nonstarter. As much as you never want to walk away from an opportunity, if there’s no consensus, it’s better to part ways amicably.”

Handling the budget conversation should be done up front, says Johanna Barger of Johanna Barger Design in New York:

“Design is a very creative field, but it is also a business – my business. And I never shy away from budget discussions. I take the financial aspect of the process very seriously, and one of the first discussions in our initial meeting is cost expectations.”

And further, she says:

“Many clients do not have a sense of the financial commitment it takes to create what they see in magazines or on social media. Part of my service is to educate the client through direct, transparent conversations about numbers while also realizing their design aspirations.” (emphasis added)

Finally, we have these comments from Alison Downey of Downey Interiors in New York:

“The project budget is always part of our initial conversation before moving forward. As our fee is commensurate with the budget, and [considering] clients don’t always understand the vast range of options when it comes to price points, we take the time to educate them from the get-go. In order to determine a realistic level of investment [rather than] ‘budget’, we prepare a project plan that includes a high and low total reflecting the items we anticipate will be used.” (emphasis added)

She continues with:

“If the client doesn’t feel comfortable moving forward, we need to determine whether the project is a fit [for us]. When a project doesn’t align with what’s needed for a successful outcome, it likely won’t be a good experience for anyone involved. That said, we wholly respect a realistic budget that is set at the beginning of the project. We work hard to be as accurate as possible and guide the client when they are veering off course. It is our job to check in with them, let them know where things stand financially, and ensure they are well-informed.”

Conversations about money can be tough, as can dealing with a potential client’s expectations based on their interior design budget. Yet, as we all know, they must take place and must be frank and open. Anything less would be not only a disservice to your client, but to yourself, as well.

If you find yourself regularly getting caught in the nightmare surrounding interior design budgets with clients, Ted is available for sales coaching and business consulting to the trade. Simply… Get in touch with TD Fall today.