Know Your Value and Charge Accordingly

The question of what to charge is often difficult for emerging entrepreneurs and independent contractors. Oddly, it can be just as difficult to know your value even if you have an established design business. You see, as an independent business person, it’s very easy to lead a somewhat insulated life, with little interaction among other designers. This can lead to confusion about your value and can make you wonder what clients might be willing to pay for your design services.

When we wonder about the value and price of the services we offer, we will all do well to remember this little nugget of wisdom, often attributed to Warren Buffett:

“Price is what you pay… Value is what you receive!”

First, let’s define our terms, shall we?

• Price – The amount of money needed to purchase something.
• Value – The amount of money that is a fair equivalent in exchange for goods or services.

So, stated as simply as possible, it’s the difference between what you charge and the worth of what you deliver that determines the value of anything you sell, whether goods or services.

How Valuable Are Your Design Services?

Here’s an example of the mindset that will help you discover just how valuable your services are: There was once a young man who taught piano lessons. He was just 20 years old, but he charged as much as a 40-year-old piano teacher. When asked why he explained, “I don’t charge for teaching piano, I charge for the 15 years it took me to learn how”.

This was a young man who understood the value of what he had to offer – the value to his clients, not to anyone else – for their opinion did not matter.

Now, as you try to set a value for the services you offer, there are some very basic things you need to consider. These are commonly referred to a covering “your nut,” and are the basic expenses you’ll incur as you move forward in business.

• What have you invested in becoming an interior designer – the time, the effort, the dedication, and paying for your training; both in the past and any ongoing training you need?
• What kinds of business expenses do you have to cover – from office to insurance and equipment to support personnel?
• What kinds of personal expenses do you have to cover – from mortgage to utilities and groceries to family support?

Once you’ve covered the basics, it’s time to build in some profit. For help with this, it would be wise to consult with someone who will be honest with you and help you understand the true value you provide to your clients. This can be a friend, an “ideal client”, a fellow designer, or one of the resources with whom you work. Just keep in mind, it’s always helpful to have that outside view when brainstorming what you’d like to charge for your services.

Doing this should be a priority for you. Not only will it put your mind at ease, but it will also greatly help change your sense of self and help you to know the value of your design services.