What Sets Financially Savvy Interior Designers Apart
Beyond Beautiful Spaces: The Business Habits That Build Profitable Design Studios
Episode 102
In this episode, I reveal the mindset shifts and daily habits that separate financially savvy interior designers from those struggling to make a profit. I explain why pricing based on data rather than emotion, understanding your true costs, and being transparent about trade pricing are essential for building a sustainable design business that supports your life and gives you freedom to do what you love.
I hope you enjoy the episode
Beth xx
As an interior designer, you've likely spent years honing your creative skills—studying colour theory, mastering space planning, and developing your unique aesthetic. But there's another skill set that separates thriving design studios from those constantly struggling to make ends meet: financial savvy.
In this insightful episode of Design Dialogues, I explore the mindset shifts and daily habits that financially successful designers have mastered. These aren't complex financial strategies requiring an MBA—they're practical approaches any designer can implement to transform their business's profitability.
The Money Mindset Shift: From Passion to Profit
Being good with money isn't about being stingy or sacrificing creativity. It's about creating a business that sustains you, supports your life, and gives you freedom to do what you love—design.
This fundamental shift in thinking is the first step toward financial success. Many designers enter the field driven by creative passion, viewing the business aspects as necessary evils. Financially savvy designers, however, recognize that a profitable business actually creates more creative freedom, not less.
When your finances are in order, you can:
Be selective about which projects you take on
Invest in continuing education and skill development
Hire support staff to handle administrative tasks
Take time off without financial stress
Focus on quality rather than quantity of projects
Know Your Numbers: The Foundation of Financial Success
One of the most striking differences between financially struggling and financially thriving designers is their relationship with their numbers.
Financially savvy designers know how much they need to earn each month, not just the revenue, but the actual profit they need to be making. They price their services based on data, not emotion.
This data-driven approach includes understanding:
1. Your True Hourly Cost
Beth shares a revealing story: "I worked with a designer recently through a health check who had been charging about $180 an hour for years. Now, that hourly rate for some of you is going to seem very low. For others of you, it's going to seem very high."
The problem wasn't the specific number—it was that the designer hadn't analysed how that rate compared to her take-home pay or business costs. After working backward from ideal income and factoring in overheads, they discovered she needed to charge $220-250 per hour just to break even.
"When we finished, she looked at me and said, 'I feel like a business owner, not just a designer trying to make it work,'" Beth recalls.
2. Your Profit Margins on Products and Services
Financially savvy designers understand which services and product categories generate the most profit. This knowledge allows them to focus their energy on high-value activities and make strategic decisions about which services to emphasize or retire.
3. Your Business Expenses and Overhead
Successful designers track their expenses meticulously and regularly review where money is going out. This awareness helps them make informed decisions about investments, identify unnecessary costs, and ensure their pricing covers all business expenses.
The Truth About "Charging What You're Worth"
One of the biggest traps I see designers fall into is this area of charging what you're worth and while that sounds empowering, it's actually vague and subjective.
Instead of this emotional approach to pricing, financially savvy designers build their rates around concrete factors:
Desired annual income
Available billable hours
Business expenses and overhead
Cost of delivering services
This data-driven approach creates confidence that clients can feel. When you know your numbers, you will stop doubting yourself. You won't overthink quotes. You won't apologize for your rates. You're going to be grounded and that is going to give you confidence and the clients will feel that confidence. That's what builds trust.
Trade Pricing: Transparency Builds Trust
How designers handle trade pricing reveals a lot about their financial savvy. Two common approaches that indicate financial struggles:
Passing all trade discounts to clients - Missing out on a legitimate revenue stream
Marking up randomly and feeling uncomfortable about it - Creating awkwardness and potential trust issues
The financially savvy approach? Transparency and consistency.
The financially savvy ones keep it simple and transparent. They say, “I work with trade suppliers, which means I can access pricing you wouldn't normally get. As part of my service, I charge a margin on procurement. This covers sourcing, logistics and warranty management.”
This clear communication should be established from the beginning and outlined in all client documents before they sign your fee proposal.
Financial Habits That Build Wealth
Financial savvy isn't a one-time achievement—it's an ongoing practice built on consistent habits.
Being financially savvy isn't a one-off thing. It's a mindset and a habit. It's setting time each month to review your numbers, looking at where the money is coming in and going out, knowing which services are more profitable and which might need to be retired.
These regular financial check-ins allow designers to:
Spot trends in their business
Identify services that aren't profitable
Adjust pricing as costs change
Make informed decisions about growth opportunities
Prepare for tax obligations
Perhaps most importantly, financial savvy includes the ability to say no—to underquoting, to clients who want "the moon for a fixed fee," and to staying stuck in survival mode.
The Most Profitable Studios Aren't Always the Flashiest
In a profession centred on aesthetics, it's easy to assume that the most visually impressive studios are also the most profitable. My experience suggests otherwise.
The most profitable studios I see, they are not the flashiest. They're the most intentional. They know what they're aiming for and they have systems that support that.
This intentionality extends to all aspects of the business, from client selection to project management to financial systems. These designers have clarity about their business goals and make decisions that align with those objectives.
Implementing Financial Savvy in Your Design Business
Ready to become more financially savvy in your design practice? Here are practical steps to get started:
1. Schedule a Monthly Financial Review
Set aside dedicated time each month to review your numbers. This isn't just about checking your bank balance—it's about understanding patterns, identifying profitable services, and making strategic decisions based on financial data.
2. Calculate Your True Hourly Rate
Work backward from your desired annual income, factoring in:
Business expenses and overhead
Non-billable time (marketing, administration, etc.)
Vacation time and sick days
Profit margin (beyond just your salary)
This calculation will likely reveal that you need to charge more than you initially thought.
3. Develop a Clear Trade Pricing Policy
Create a transparent policy for how you handle trade pricing and communicate it consistently to all clients. Include this information in your initial client documents so there are no surprises later.
4. Track Profitability by Service Type
Analyse which services generate the most profit for your business. This might mean tracking time more carefully or reviewing past projects to identify patterns. Use this information to guide which services you emphasize and which you might phase out.
5. Build a Relationship with Financial Professionals
Consider working with an accountant or financial advisor who understands the unique aspects of a design business. Their expertise can help you make more informed decisions and identify opportunities for improvement.
The Bottom Line: Financial Savvy Creates Freedom
The ultimate goal of building financial savvy isn't just to make more money—it's to create freedom and sustainability in your design practice.
If you don't think about money in your business often, if you avoid it, it might feel hard to start with. But I know that in six months time, you are going to feel so much more confident and so much more at ease with your business.
By implementing these financial habits and mindset shifts, you can transform your relationship with the business side of design. The result? A studio that's not just creatively fulfilling but financially rewarding—giving you the freedom to do your best design work for years to come.