How do I know what to charge for my services?

Question

I am going to start redecorating/up-dating/re-arranging peoples homes and offices. Should i charge a commision or hourly? Im not sure help!

Answer 1

Dear Greener,

        Great question. All who are self employed struggle to understand our public market value. That includes accountants, attorneys, consultants, engineers and doctors.

          Your services are professional consulting. Your first step is to try determining how others in your field charge.You may be at a disadvantage because many in your field have arrangements with stores, manufacturers and contractors to receive a percentage of sales. The service part is presented as being "free" which you understand is bogus and misleading. Notwithstanding, never underestimate the ignorance and greed of your customer who fails to recognize they are paying indirectly for services. IT IS HARD TO COMPETE AGAINST SO-CALLED "FREE".

       In your situation you might best consider charging a flat-fee arrangement. Obtain a substantial downpayment and progress payments or payment upon completion.

       It will take time for you to set up arrangements with stores or manufacturers. And you should not want to limit your clients to items at a limited number of outlets.

     Determine in advance the amount of time you need invest in completing the services. Multiply this by an hourly figure. Your hourly amout should be your estimated gross weekly income necessary to pay you a decent wage and pay your expenses.... Rent and telephone are killers...  Divide by 36 to 40 hours and you have an hourly figure. The advantage of quoting flat fee is the fact that by quoting $50, $75 or $100 hourly discourages less scrupulous competitors (and they are not called "competitors" for no reason) from stealing potential clients by dismissing your fee as much high than their hourly fees and proceeding to burn the difference and the client by taking twice as long to complete.

                As your experience grows you can adjust your quotes through your ability to judge your potential to earn fees through your direction of buyer traffic. Your clients will have comfort in knowing in advance how much they will need to pay you.Further you will be under less pressure to direct sales to a limited number of outlets or manufacturers or contractors.            

                  Best Wishes

Answer 2

My husband owns a gardening business, and it took him a while to get this right.  You can't really charge by the hour for two reasons.  Firstly, people will be thinking about how much they are paying for your time and be upset if you take a break.  If you don't tell them an hourly rate, they won't break it up that way and think about it.  

The trick is to guess how long you think it will take you to do the work, then charge them that amount of hours (my husband always adds an hour too just in case)  He also charges 20% extra for any plants, sod, mulch he brings over.  This is to cover shopping, delivery...  

Just remember, it's easier to say "this didn't take as long as I thought it would, so I'm charging you less" than "This took longer than I thought, so you owe me more if you want me to finish".

A last note, you may want to see what other people in the area charge and try to beat their prices.  Since you are the new guy in town, you'll want to win over new clients with your lowest price, then slowly raise them as you get more experience.

Answer 3

You should spend some time in market research. Find a mentor who has more experience in the industry and have a casual chat with other interior decorators. May be take some of them for coffee or drinks and try to figure out how they manage their business life. You will get to know a few trade secrets after a few of drinks.

Charges should be based on the time and skill you put in at your work. You should be fair towards your customers. Try to figure out what the budget of your client is and then decide how much time and resources you would need to meet the expectations of your client. You can then give an estimate to your client detailing the costs involved. Always say to your clients that you are trying to keep it withing their budget range. This shows that you are genuinely keen in meeting the budget criteria.

Go, take some risks, if you get less money to start with - does not matter, you will get good experience to build your future on. Good luck..!

Answer 4

obviously you want to make as much money as possible.

but you should be competetive with others that offer the same service.

if you dont know what to charge then maybe youre not ready to start a business. I would not let anyone so obviously inexperienced into my home or office to perform such an intimate service.

Answer 5

Commission.  When you are called with a job opportunity, go to the place, see exactly what the person wants you to do, then depending on what they want give them a price.  Let them know ahead of time that the quote you give them is only for the things you have discussed doing and anything else that they request you to do during the redecorating will be extra.  I wouldn't pay anyone to do this type of work by the hour (some people work much much slower than other people).  Good luck with your new business...wishing you lots of success!!

Answer 6

lotsa money hun, lotsa money