Behind the Design: How an Interior Design Firm Generates Revenue
When you think of interior design, the first images that likely come to mind are stunning spaces, beautifully curated furniture, and flawless finishes. But behind the scenes, running an interior design firm involves a carefully thought-out business model—and understanding it can help clients feel more informed and confident about the process. At Violet Marsh Interiors, we’re pulling back the curtain to share how design firms generate revenue, how we’ve structured our own business, and why transparency matters in creating a successful client experience. In this blog, we’ll explore common revenue models in the interior design industry, highlight our unique approach, and provide insights into how clear communication fosters better collaboration and trust.
The Varied World of Interior Design Business Models
There are tens of thousands of interior designers across the country, each with their own way of running a business. From fee structures to sourcing methods, no two firms operate exactly alike. Over the years, we’ve encountered a variety of client requests, from lowering fees to sharing trade discounts and even shopping at specific retailers. This diversity in approach makes it all the more important to provide clarity around how firms sustain their businesses.
After all, a successful design firm—one that can consistently deliver high-quality work—must also be a profitable one. That’s why we’re diving into common revenue models in interior design and explaining how Violet Marsh Interiors operates.
The Flat Fee Model
The flat fee model offers clients a clear, upfront cost for a defined scope of work. This fee covers everything from design hours and client meetings to procurement and installation. To accurately price projects under this model, firms rely on extensive experience and data to predict the time and expenses required to bring a design to life.
Pros:
Clients know the total cost upfront, allowing for clear budgeting from the start.
Money conversations are minimized during the project, allowing the design process to unfold seamlessly.
Designers have flexibility to allocate budgets across different areas to achieve aesthetic goals.
Cons:
Predicting all costs and timelines is challenging, especially given industry variables like rising material prices and vendor delays.
Firms may undercharge if unforeseen complexities arise, putting profitability at risk.
Conversely, higher initial fees can lead to “sticker shock” for clients.
At our Atlanta interior design firm, we’ve opted not to use a flat fee model. Design is an iterative, evolving process, and we find that clients often refine their needs as the project progresses. Instead, we provide a range of estimated costs upfront and adapt as the design unfolds.
The Hourly Billing Model
Hourly billing is one of the most common approaches in the industry. Designers charge for the actual hours worked, which can range from $125 to $400 per hour depending on the market. Billable activities include design work, specifying products, client and contractor meetings, and site visits. Non-billable tasks like marketing and team development are excluded.
Pros:
Clients pay only for the work completed, offering flexibility to expand or modify the project scope.
The open-ended nature of this model accommodates organic project growth (what we call “scope creep”).
Firms can assign different hourly rates for various team members, ensuring fair pricing for the level of expertise provided.
Cons:
Tracking hours can be tedious for designers, requiring tools and systems to streamline the process.
Clients might feel uncertain about total project costs as the timeline unfolds.
At Violet Marsh Interiors, we use this model because it aligns with our iterative design philosophy. To make it seamless, we use time-tracking apps and block dedicated hours for project work each week. This ensures steady project progress and a predictable revenue stream.
The Hybrid Model
As the name suggests, the hybrid model combines elements of flat fees and hourly billing. Typically, a firm will charge a flat fee for the initial design phase, covering the creative vision, while using hourly billing for project management and installation. This structure acknowledges that execution often involves unpredictable variables outside the designer’s control.
Revenue Through Product Sales
In addition to design fees, firms generate revenue through product sales. Interior designers often have access to trade-only furnishings, decor, and materials, providing clients with high-quality, curated options.
At Violet Marsh Interiors, we source from trusted vendors who meet our standards for quality and service. Maintaining relationships with these vendors allows us to resolve issues quickly if products arrive damaged or defective—an inevitable challenge in the design world.
Our Approach:
We offer clients a discount on retail pricing for products while ensuring our firm remains profitable.
We avoid using unreliable vendors, even if they advertise lower prices, to maintain the integrity of the final design.
Why Transparency Matters
Interior design projects often take 8 months to 3 years to complete, with costs and timelines evolving along the way. By clearly communicating our fee structure and sourcing practices, we aim to reduce stress, foster collaboration, and build trust with our clients. Transparency ensures everyone is aligned on expectations, making the design process smoother and more enjoyable. Ultimately, our goal is to balance beautiful design with a business model that supports high-quality service and long-term relationships and success.
At Violet Marsh Interiors, we specialize in transforming Atlanta homes into personal, luxurious retreats. Whether it’s a home in Buckhead or a cozy bungalow in Virginia Highlands, our goal is to create spaces that reflect your unique style and the timeless elegance Atlanta is known for. Book a consultation call today and let’s bring your dream space to life.