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Interior design bill format for Product quality

we have tons of registrations today and makes me really happy to welcome you all to today's webinar um about billing structures uh we started this pretty much a year ago i think it's probably the anniversary webinar and we started it right when um the first lockdown hit us and we started with you know how to cut your cost and we started how the cares that can can help you some of you have been very loyal uh participants of this and um we morphed into a business success skill webinar because we really feel uh we can provide you know insights for every one of you who do and kelly you just said it to do 85 of their work is actually business and only 15 of your work is is designed so we're very happy to provide that um we would also love if you spread the word on instagram take a screenshot you know um i think you will find all of us for also on instagram uh and um and yeah spread the love so that next time even more people can join i think this is really about i'm helping the community and and growing together um before we start with all those questions and i would love to introduce the three masterminds and creative powerhouses that i have um with me today and i would love to start um with kelly kelly founded joyce street design in 2011 with a simple idea in mind that everyone deserves to live in a home they love which can only be achieved when a space is personal functional and comfortable a formula lawyer kelly earned a law degree from stanford law school and a business degree from emory university before pivoting and studying interior design and interior architecture at the university of california in berkeley when she isn't designing you can find kelly traveling the world with her family and gaining inspirations for her projects or working on her non-profit joy street initiative kelly it's a real pleasure having you here today thank you for joining thanks for having me excited one of my favorite topics ah i think we all shared that um natalie um thank you for joining too natalie was born in buenos aires um built her career in finance and business so another business background um here on the on on the panel before starting her own interior design firm based in brooklyn featured as a 2017 rising star by new york conscious and garden natalie has been published in numerous interior design publications such as architectural digest el decor veranda house beautiful tv segments and many more traveling the world and visiting glamorous cities and places inspire natalie to create one-of-a-kind ambiances natalie also thank you for joining and another travel um you know fan uh soon we can soon we can resume that so thank you thank you for being here thanks um and then jillian siegel after completing her bachelor of art degree jillian pursued her true passion for design by attending bcit's interior design program after earning her cid and working for some of vancouver's top design firms jillian decided to start her eponymous design firm she describes her personal style as modern eclectic glamour inspired by her travels and love for design for decades past jillian loves blending the old and the new jillian is also an interior design contributor and writer for martha stewart.com julian thank you for joining out of canada thanks for having me i'm so honored to be here and with such great company um so am i um and i introduce myself really quickly i'm benny throw wine i'm schumacher's president and um yeah i guess the host of this webinar um so this is a really interesting topic and um i would just you know to make it even more exciting i um i would like to you know start and warm up um with a question to all of you um where we are catching you today and i would love to know a little bit more about the room um that you're sitting in right now and and i i can already guess so why don't we start natalie you alluded to it already earlier to the smaller group here so tell us where we catch you and a little bit about the room hi everybody thank you for joining us today so i'm like benny said i'm based in brooklyn but right now i'm in florida i'm in boca raton um i just arrived yesterday and i'm located in my mom's art studio so you can see the paintings around that's so fun thank you jillian where are we catching you i'm at my office today in vancouver so i'm happy to be at my office i have a uh my security guard here with me who's um hanging out so yeah very cute good so we all can feel safe yeah good and kelly what about you you have a beautiful backdrop yeah i'm actually in my office too um the back wall of my office is actually a mural and we had painted when we first moved in um and it's now become an amazing zoom backdrop for the last year so if um i try to take most of my content here amazing um and for everyone who is listening i forgot that um you have a q a button at the bottom of your screen um if you have a question if you want to know more please feel free to use that button and answer your question or write your question since i have to think speak uh and read at the same time try to make the question short so that i can that i can do that in parallel but you're very you know very actually encouraged even to you know participate we would love to address your questions um kelly maybe i start with you now with the first question about spilling structures you know so much has changed over the last year and we're doing a lot more to resume a lot more virtually you know i think a year ago we all thought oh my god how is this industry going to survive then four months later we felt like oh this is actually not too bad and i think we all today see that the home industry is just through the roof um so there's a lot has happened um has any of your client ask you to adjust the way you've charged is there has there anything changed um luckily for me it really hasn't changed um because the way that we build we're flat we're flat feet so um as a former attorney i have ptsd from billing by the hour so i refuse to build my time by the hour and we also sorry about the fire trucks uh we also you know think of ourselves with what we provide as a value and it's not something that can be quantified by hours like all my hours are created equal so we just give them a flat fee so our clientele for the most part administration sorry i know that's really loud um our clientele gets a flat fee up front and they know exactly what we're gonna charge so i think the difference really where it comes from that a client might not sign on if they're uncomfortable with the overall number because they have so much information up front um so what we did with when the academy first happened and i'm sure we were like everybody else oh my god we're going to go out of business nobody's ever going to call us again we lowered our minimum for the types of projects we would take and so that opened up a few people who probably wouldn't have been able to access our services before which resulted probably in lower fees because their budgets were lower and that's part of how we build how we structure the uh overall flexi but generally because it's flat and they know in advance what they're going to get nobody's been able to come back and say you know can we change this or um they would just say no this is too much for us and he'll move on and we haven't seen more of that necessarily but it's been very eye-opening to like lower the fee lower the overall budget number and get different types of projects interesting and kelly i will definitely come back on how you get to that flat fee because i think it's very interesting and i'm sure a lot of you know participants are already you know trying to figure out how you do that jillian but before we get there jillian i would love to ask you you know did any of your clients challenged you on or like made you adjust the way how you build or is this do you feel like it just went the same path as it did before um i think as you said there's been so many changes between when the pandemic started a few months later and then where we are at now and i feel like things have adjusted a little bit for me with that sort of trajectory at the beginning of the pandemic i was actually nine months pregnant with my second daughter about to give birth this is exactly a year ago and we were super busy at the time with work and a bunch of clients called and said we're not going to move forward with our project we don't know what's going to happen with the real estate market so at the beginning of the pandemic i was totally freaking out that i was about to have my second baby and that my business was gonna go under and at that time we also were getting inquiries for new projects i think people kind of realizing oh i'm gonna be at home i need to adjust my home to function for me differently so we were also getting new inquiries which was a little bit reassuring um but at that time i definitely lowered my rates a little bit because i just really wanted the work um since then um i'd say after a few months kind of like you said we sort of realized oh no we're actually okay i went kind of back to my normal rates um and that's where we're at now is sort of our regular rates we actually recently increased our markup um so i guess we've now actually raised our rates a little bit so it's gone from one extreme to the other over the course of a year which i think is reflective of the year we've had interesting yeah and i also i'm gonna get more into that i think because i i would love to hear how um you know sensitive the market is to actually lowering or hiring um your fees um but natalie tell us a little you know have you adjusted the way how how your charge of client ask you to do that so i'm not really like in a way i think every client is different and everybody needs their own um proposal like usually i have two standard proposals one is um like a 30 commission well i'll go into details after but one is like commission plus a design fee and retainer fee and the other one that most clients ask for is a flat fee so i try to start with the commission basically in my case i think it's beneficial in the long run but clients don't want the uncertainty of not knowing what you're getting into most of the time they tell me okay but how much is the budget going to be so i asked them you know how much do you want to spend let's figure it out like the budget together because everyone is different like some people want only high-end pcs and custom and something some clients want to mix and match i mean most customers want to mix and match um and so i'll get into details after how i come up with my feast but i have like a mixed structure so it really depends on the client um i approach them with what i propose and then sometimes they tell me they want the flat fee and we go towards that route super interesting maybe natalie we just like dive into this right away you know like um your two standard ways of of uh charging or like how how you come up with it would you would you walk us through this yeah sure um so i do different types of projects some are ground up construction that involve you know building like a whole house and um furnishing it from a to c with accessories and everything and then some other projects is basically like i'm decorating you know furnishing the whole house like maybe they just bought a new house or a new apartment so i treat both options very differently um because when it's construction it's hard to do well at least for me it's hard to do a markup on construction fees so sometimes i tell the ideally for me will be to do a flat fee for the construction and then a markup for the furniture that we're going to get that's the ideal case but most of the time it doesn't work because the client really wants that flat fee they feel like they're getting a bill if they know you know no matter what we buy we're you know stuck to that um so and then if it's furniture same way you know whether it's um i usually do 30 commission on the cost of the item on the net price so let's say that i'm buying wallpaper and i don't know it's dollars a yard for the wallpaper my cost so i pass along the discount to my customer and i charge thirty percent at charge on that markup um and the same thing for like everything that we get however it's not just the 30 that i'm making on this client i also have an upfront retainer fee and this time fee so um the design fee basically covers like my presentation and all the time that i spend before presenting all this furniture so it's not a large amount but it really depends on the number of rooms like if we have i don't know living room dining room master bedroom and i know four other bedrooms um i try to like two three thousand a room design fee super interesting thank you um and uh you know and you are with your clients very transparent on on the net prices and the markup or do you just give them the end price and you don't discuss that with them so um i try to be very transparent because i work in a tight community that everybody knows each other um one minute oops my song oh sorry my soon like disappear for a minute so um i work with like i work through referrals i don't really do marketing or advertising because um everyone that calls me is because someone recommended me so i want to keep my reputation all transparent and be easy going you know i don't need to hide anything from anyone so um usually i work on an average of 10 projects at the time sometimes more it depends on the size of the project that i'm working on and in terms of charging like i don't want to overwhelm myself and i want to have like to do so much accounting and billing for like 10 or 15 different projects so i treat each project differently sometimes the client asks me can we use my credit card for to pay for things and sometimes i will say okay you know why it's going to say i don't need to do you know bookkeeping and accounting and check the credit card statements i go back and forth spending countless hours with my team trying to make sure that we're getting paid exactly what you know what we have to pay back after on credit card statements um and then some other clients like i do want to um you know get the phones in my credit card or fill my cred i don't know just i want to like be able to charge everything myself so so i tell those clients like just you know give me a check for everything and i'll take care of all the payments thank you kelly do you kelly you also do flat fees do you this do you do this similarly is it completely different like how do you do this in a construction and in an interior design phase yeah i think i'm a lot more stricter than natalie that looks very nice i am very much like we bill one way um so essentially we have three keys we have the design fee the project management fee and then our markup um the design fee similar to natalie covers all of the presentation all the work up to the point of purchasing and that is a fee that is based on a value that i've created i was like essentially i've looked at pre uh past uh projects we've kind of figured out how many hours it took probably doubled it and came up with numbers so like for example a kitchen if we're doing we don't do only kitchens but let's put say for example a kitchen will run you anywhere from 10 to 20 000 in design fees right so if you call me and you want me to do a kitchen a dining room and the master suite i might charge you twenty five to thirty thousand dollars in design then after we kelly so sorry to interrupt you sorry to interrupt you this presentation um includes um floor plan furniture specification elevations electrical electrical plan everything even permits that if you need it right so at the end of the design phase you technically could take what we give you and go do it yourself you know we don't necessarily give you all the information but you have the images you have enough details that you could go do it yourself um then so the next phase after that is the project management phase where we help you so you know identify your contract if we haven't already done it we purchase everything we bring it to you all of that and that is a percentage of the budget so we put together we put together the budget for you so we'll say okay you have a 250 000 renovation happening we take anywhere from eight to fifteen percent of that budget as our feed to magnet to that project so for a let's say i think we're 250 project we kind of it changes based on how big the budget is it's probably 10 so we would say another 25 000 in fees to actually manage that construction project from start to finish and then at the end we do a nice reveal and everything like that but there you wouldn't but there you wouldn't uh charge a mark up on you know a carpenter or on like the guys you know by law in california i cannot charge for labor if i'm not a general contractor so only thing we charge or mark up on so that's what the project management fee is it's our fee for making sure that the contractor is kind of doing what they're supposed to do our site visits our weekly kind of pop-ins and then we just charge um we don't say markup but we charge a fee for everything that we touch anything that i have to purchase you are paying me to do that so that's usually we split the discount with our clients so for example if we go back to wallpaper we usually get a 50 discount so if it costs me a hundred you pay 150 because you get fifty dollars off and i make fifty dollars on it it's much better you know it's better for like things that don't actually have a retail price so if it's custom the retail price is two degrees three times what i pay for it so i'll make 100 up on it or whatever but we essentially are very transparent about this surprise if they ever come back and ask we get you know give them that detail for sure yeah i don't split the price on anything that we buy retail we take it all um and so and then just jillian sorry it's a long long time for you to wait um no it's so interesting i love hearing this is like my favorite topic with other designers so it's so great to listen to what kelly and natalie do okay good because we're gonna come to you in 20 seconds um i just i just have one more a quick question for kelly um kelly the um where do you draw the line between so i think design design phase and project management phase is clear where do you draw the line between project management phase and your purchasing phase basically were you where you you know charge the fee um well it's all the same so the fee the fee once so we won't purchase until we're in project management phase right so project management phase is literally the entire rest of the project and we're just taking the markup you know as we purchase along the way so they're not three different phases this third fee kind of gets rolled into the project management fee too got it interesting thank you um jillian now we want all of us want to know how how you run your business and what your billing structures are and thank you by the way all of you for being so transparent and open i think this is super interesting i probably bill a little bit more similar to natalie than kelly i would say that our fees i mean we have different ways of billing and it's kind of a combination so some and it really depends on the client it depends on the project it depends on the scope of work um but in general i'd say we do a mixture of a flat fee for kind of our design service and then a commission on the goods um but there are some projects where we're doing hourly plus a commission sometimes if the clients really can't wrap their head around paying a commission we'll charge a much larger fee um so i really do tailor it to the job and the client there are some jobs like renovations for example where um i just can't charge a flat fee because i find with renovations the scope often creeps and creeps and creeps i can't tell you how many projects we've done where we've started with like one kitchen and end up doing an entire house so in that sense you get really burned on the flat fee if you operate that way in my experience so when we do charge a flat fee we like to be pretty specific about what's included in that flat fee so how many hours of revisions that you're getting sort of how many presentations you're getting how many months of project management so we include our project management unlike kelly we include that in our sort of initial fee um but we do try to get specific and then our contract basically says that if you're reaching that cap on what we've done will kind of say hey like you're approaching sort of what you had your allowance for this and then after that if the client still wants to continue doing revisions or change orders then we'll kind of add an hourly fee or like an addendum flat fee at that so it's definitely a big mix it's not straightforward i feel like this is a constant discussion in our office and i have a lot of i'm fortunate to have a lot of friends in the industry and i feel like this is literally the constant conversation we call each other we'd be like what are you gonna what would you charge for this project you know it's just it's so um it is really tricky and something i know we struggle with making sure that we're being competitive but also making what we need to be making and think we should be making um and then yeah for the markup component for the commission component we were charging a 15 commission initially now in canada we're charging 20 but in our we work a lot in the us as well and we charge 30 in the us i've found that that has been pretty much the standard in the us and canada a lot of designers actually don't charge any markup or charge 10 so we do it 20 because i feel like that keeps us competitive but it's it's a slightly different market i think in canada than in the us in general um but yeah and i'm sure we'll get to this but um i just think with you know the markup can be tricky with uh everyone having access to the internet and being able to research prices if it is like a retail good um so yeah it's um i know that's not the most straightforward answer but i feel like it's not the most straightforward process and it really is client specific um in terms of the scope and the project because like natalie said with construction like i'm not charging a commission so i need to weigh my fees more heavily but if it's furnishing my fee will be smaller with that commission so yes super interesting jillian and i think you know the interesting part is on paper it sounds so straightforward you know you have a design and then you stretch your flat design fee and then you purchase and you you you you know charge a handling or or markup or whatever fee um but you know it's never that straightforward because your client wants to you know get revised designs over and over and the elevations drawn over and over and one day you know it's it's a door the next day it's a window um and you know and so it's it's very interesting how you how you all handle that um i would i would love to understand from you um whether you have seen it just coming back to this um margin question you know you've mentioned that you went down with your prices now you went up again with you with your you know hourly and markups do you think this is the time to rather increase your fees or do you think it's the time to rather go lower do you see a margin erosion there because i think you know a lot of us are still trying to figure out you know how do we skim the milk if you will you know of what's happening out there i would i would love to hear your opinion on that um kelly do you want to start sure um i did a little bit like jillian um after you know we realized that the market was kind of picking up during the pandemic we increased our budget like we actually doubled it from what it was free pandemic um and so now we are only taking larger projects uh primarily because we're so busy you know just basic market analysis um in the sense of you know i i think that the all the information that's out there does make it a little bit more difficult for you to get overly aggressive with what you're charging in march you know markup um i find on most of our clients and i think some of it is just the way we present it like we don't we tell them like we're not going to be the cheapest person we're not going to compete with the internet um where that's just not our process if there is something that you find that you know we suggested and you find it cheaper you are more than welcome to buy it you are more than welcome to deal with it i won't touch it i literally won't even move it when we go to take pictures right like i will it's yours and everything that comes along with it you can deal with and i think that's a perfectly reasonable way to approach it i'm not i make my the bulk of my money in my fees because that's what i think my value really is and so while markup is an important part of our you know our business model i would rather allow them the flexibility for the few things that they want to do to do that we have actually only had one client do it and it was for one thing and it was perfectly fine most clients don't even have the time or the inclination to really do the research but we put it out there we don't give them opposite names of stuff to do it but if they are able to find it and they're able to reverse search or whatever we do then we allow them to purchase it if it's that important to them it's not worth our headache um and kind of ruining the relationship for something you know for 200 here there you know it might be a different situation if it was everything um but generally it's not worth the headache interesting natalie how do you how do you see where the market is steering do you think this is the time to increase rates do you think let's wait a little do you think oh the competition is going to be even you know higher between interior designers and you're going to see a margin erosion where do you see the market going i think the industry is booming the past year everyone you know people are spending more time at home and they're trying to see what else you know what they can fix because they are sitting in their house and they realize you know my kitchen is an athlete or my room so i think on the opposite like it's a time to increase prices my prices really depend on on demand so i'm always busy it's always busy so i choose how i want to spend my time do i want to you know do 20 projects and charge less or do i want to do 10 projects and charge more so the answer for me is do 10 projects and you know charge more so every year i don't have like an exact formula how much i increase but every year my prices go up because first my portfolio keeps building up my reputation you know gets better supposedly um so i try to choose my clients like i get phone calls i get a lot of phone calls with prospective clients and i'm lucky to be able to say yes and no based on my timing um if i like the project if i like the the person if i'm going to get along all these projects usually take you know between a year and two sometimes longer when it's ground up construction you're seeing the same climb for like two three years because you're furnishing you're decorating you're building so it's it's like a very important relationship that i have to make sure that i'm charging correctly and that i'm making my time worth it so definitely like prices should go up should go up with inflation with the market with demand with everything but it's very interesting because as you as you just said that it's a demand and supply you know and as much as you might go down in prices if there's nothing going on uh you might go up in prices when you know everyone is uh just trying to work with you or with us you know in general very interesting i can add it later it's okay i wanted to say something that i use that i always do go ahead go ahead so um i have like i love excel i always do these spreadsheets you know for me actually it's like the best way of feeling and everything so anyway i have this excel spreadsheet that i check here and there that it's like a calendar from january to december for the upcoming year and i list all my clients my existing clients and my prospective clients so what i do is i say okay january and like you know not everybody pays at the same time so i'm like january who has to pay me and how much ing to the contract you know so i calculate how much money i'm making in january in february so like i know from today how much money i'm going to make in the next 12 months based on all my existing clients so that's the way also that i used to to help myself if i want to take a bigger project and charge more or a smaller project and just be comfortable so yeah very helpful thank you thank you jillian how do you feel about the market overall like is it for your time to increase the rates because of demand or how you how do you feel about it yeah i mean aside from the sort of blip at the beginning of the pandemic when i just got so nervous um i'd say every year we try to increase our rates um similar to what natalie said you know i think a big part of it is that each year our network grows with clients who are referring us to other clients since referral is a huge part of our business and also our portfolio is growing you know press coverage that we're getting i feel like you know we always try and make the last project our best project ever so i feel like every year i'm growing as a designer too um and i feel like with that comes increased rates and you know it is totally i think a supply and demand thing as well i mean we get inquiries um every week for new projects and i feel very fortunate that i can sort of make sure that it is a good fit for us and something that is inspiring or with a client who i'm inspired by or get along with because as natalie said it you know i have clients so i've been working on projects for five years with them because i feel like design is never done and there's always another little thing to do and it's kind of a marriage um so i feel like as much of it as it is for them to pick their designer i feel like we need to pick our clients of course when i started my business i would take anyone who had hired me because you're starting and you're trying to build a reputation and build a portfolio but i feel like once you are more established um it's a really great position to be in to be able to really like interview your clients as well as have them interview you yep um so we got a lot of questions in and i would love to answer as many well to read as many questions as possible and then for you to answer as many as possible um what i would suggest is that i read the question then whoever of you you know knows the answer wants to answer first you just go and then we only have one person answer the question then we move on i think we have 30 questions right now so um i i maybe we do a quick q a session so um the first question comes from shirley asking how do you come up with the overall flat fee per job is that ultimately based on estimation of hours or what is it based on i can i can answer perfect so i usually make at least like you know by room of everything that's going to be required so i i made like a whole spreadsheet with every room every item labor material so once i have a total number i calculate 30 from that total number and then i add a little bit extra because i know i'm spending extra time so like usually when i do just commission i have that 30 plus the design fee so i add the design fee on top of that number and that's how i come up with my number and i think this spreadsheet you probably also can just use on every project and you just adjust it right once you know what you put into a living room you just like use it over and over and adjust it every time again yeah it needs adjustments because also like some people like some clients want you know say higher end house or if it's a summer house they are not expecting to spend as much as a full-time home so it really like i change it and i make sure that i go item by item depending on the client and and the home yeah all right i mean for me it's a little i want natalie's spreadsheet but i don't have anything like that essentially we i came up with these numbers when i worked by myself um and over the years kind of what we are just we were just talking about inflation and just increasing the numbers i've increased them and my team i'm not that great at it they do track their hours so we go back to projects to make sure that we're coming in um under you know we're still making money on the numbers that we created so like the numbers i mentioned earlier they are not based on actual hours or any or you know anything specific it's more so the size of the room that kind of yeah here's what i'll say if i'm being completely honest i expect to make 20 to 25 of a client's overall budget that's that's my goal in every project so a lot of times that dictates what the black fee will be as well so if i know that the client has a you know 500 000 budget then my design fee is actually going to be a little bit more even if calculated in my room might be a little less so that's just kind of my goal and if clients would go for it i would just ask for the 20 up front but they never would do that so we do it in these multiple different ways yeah thank you kelly next question um how do you handle flat fees when the client challenges and says they did not get their money's worth or they did not like your design how do you deal with that and with regards to the flat fee wants to go first jillian i'll go first um i've actually never had a client say that they didn't feel like they've gotten their money's worth um i've definitely had a couple of clients where they haven't liked a design um generally we will you know it's it's a relationship and i feel like for the most part if it's the right fit of a client client designer relationship it is a partnership and we're working together to come up with something that everyone feels great about so if they're not happy with the design that is generally happening in the design phase where it's really easy to change a design or change your drawing and we really do try to use a lot of the tools at our disposal whether it's renderings or mood boards to really help them visualize what they're going to be getting i always tell my clients i don't want you to get to the end of a project and say this is not what i was envisioning of course mistakes happen things happen people sometimes are envisioning something different um in their head than what it turns out like and so we do we do work really hard to make sure that at the end they're happy so i feel like you know 95 of the time they're super happy there's been a couple clients where you know we've gotten midway through the project and i had to even step away and just say look like i i think our vision is too different i don't think this is the right fit and kind of fire the client or quit or whatever you want to call it but i think for the most part if you have trust with the client and designer and you know you interview each other at the beginning then everyone is invested to make it great yeah interesting i think also it's all about communication and having them be a part of it um kelly i got a question um do you mark up on items that can only be purchased retail how do you how do you deal with that um we don't buy that many retail products but we don't mark it up over retail that's one of our um in our contract i think we need to say that so so let's say we go to you know a west down and i get 25 off i keep the 25 off they pay retail so we don't we mark it up in a way but it's not over what they would have yeah interesting and then i got a question from i hope i pronounced your name correctly ruchi um asking you know when you purchase from trade-only sources everything all the furniture needs to go to receiving warehouses do you charge for the warehouse cost or is that part of your markup okay we charge for it the answer is yes 15 like so when we give a client a project a product we just charge 15 on top for shipping and that covers a good portion of it and we charge the rest if it does got it um then someone else asks curious how everyone captures freight costs within the company and bill clients who wants to answer that question in my case i i really passed the course of like i have my extra spreadsheet with you know how much the client is spending and on the bottom um sometimes i i say okay like shipping is 15 flat you know flat percentage for everything but then i still calculate on the side like i have another cell that i actually add the cost of every shipping item so the 15 is more like a provision to you know to keep it safe for myself but i know how much it's spending on if they're spending more than the number will go up will reflect yeah so you guys all charge for it and you don't do a markup on it you just like pass it on that's what i understand well i think i'm like natalie where we do 15 but we also track so if it's less than 15 i don't necessarily give it back you know so it's it kind of balances out um so i don't know if i would consider it a markup but it's um yeah i don't know we do ours like we consider everything that we purchase goods and services which would include something like shipping or freight like everything across the board is our cost plus our 20 so if freight is a cost we add 20 percent it's just i like to keep it with that i try to be really strict i i'm flexible in many ways with my clients on lots of things but i find that when we get into picking and choosing what a markup applies to and what it doesn't it just becomes confusing for the client and so i just kind of say this is how it is take it or leave it um how do you handle construction management fees on top of design fees if it's a new build julian do you want to answer that um we include project management in our flat fee um i would love to charge i'd actually kelly be so curious to know how your clients respond or what kind of fee you charge on new construction for project management because i i would love to charge a uh percentage of the build costs but i find you know a lot of the builds we're working on i mean the property is a few million dollars the build is millions and millions of dollars and the contractor's already charging a 15 project management fee so i find that if i pitch that to a client i feel like they'd actually laugh in my face and be like absolutely not um so we really do kind of we look at how many hours we think it's going to take how long the project is and we include that in a flat fee although i would love to hear what you ladies are doing because if i could do that that would be fantastic well in fairness you know i'm in the bay area there is no land people are not doing new construction that frequently so most of my projects are you know maybe we are gutting a house but it's very rare we're doing a new build we just been on a new project a new build and we did a square footage fee we did because i agree you can't say this is gonna be a three million dollar new build and i'm doing nothing but picking finishes let me have ten percent right so it was a more nuanced version so that's the one that's for commercial work and for new builds we do more of a square footage but that's a small percentage of our projects um the questions are pouring in um actually we have more questions now that we had when we started the q and a so um so we really have to limit it now to one answer so that everyone tries to get one i don't think we get all through it but we try we try hard everyone um so um what do you do billing wise and i love this question when a client reaches out to you after the project is actually done and still help ask for advice or help natalie how do you deal with that you think like you're done and everything is no like you want to keep the relationship i'm not that strict like you know i make sure that i charge what i charge but i'm also like if they have a question and it's not that they want to redo another room i'm always going to say okay we need a new contract but if it's something within the room they have a question like okay how long is he going to take he said an hour two and five years or more we need something got it okay helpful thank you then shirley asks um do any of you have good time tracking apps that work with an accounting platform i tried iv but reverted back to qbox pro any any of you guys have a recommendation there we're using toggle um but it's oh nice um it doesn't hook up into accounting software we're actually currently in the process of trying to change all that over so but toggle is what we use it's easy t-o-g-g-l thank you then jennifer asks um can you better explain what you mean by commission does it that this mean your net cost plus markup and i think we can all just say yes it's net plus markup [Music] what do you believe is to be a relevant hourly fee in today's market for a mid to high-end project what would you say like if you thought in a range what was the right hourly fee i fee i have an hourly fee if they scope creeps and my fee in the bay area is 245. i think it's so location-dependent right i don't charge hourly but occasionally if someone calls me and they said like i need help to choose fame colors like sometimes i might be like you know okay it's going to take me two hours like very like maybe once a year i said yes and i charge like more than like at least like 500 an hour because it's like an exclusive service that's going to make the house for her that she doesn't want to hire designer because she can't afford it but yeah like i'm like okay why not just two hours i make a thousand dollars and i'm helping someone it's okay yeah thank you um then pasquale um asks did you write your own contracts or did you go to a lawyer or a source online jillian do you want to answer that sure um i semi wrote my own contract then i got it from actually another designer who's my mentor and have kind of shifted it over the years as my business has changed and grown but it is not like a 10-page legal contract it's fairly straightforward i feel like um yeah it's worked for me so far thank you um then another good question here when you do flat fees do you collect monthly or just one or two lump sums kelly how do you do that we collect four some so we collect 50 of the first fee before we start 50 before we present the actual final design 75 of the project management fee before we start and then the last 25 when it's all done and um also the question for from not my question um when you buy furniture how do you do that do you do it with your own credit card do you charge your client prior do you put it on your credit card and then wait for the money how how do you how do you do that i always say that they have to pay up front like they have to give me them i don't i won't buy anything until it's paid for and my desire to say an item has to be prepaid we take a retainer for everything you're gonna buy so if we're buying a hundred dollars worth of product we take the retainer for like 90 000 and we just bill against that um and do you keep your original rates for repeat clients or do you sometimes also increase it or do you go down how do you how do you do that jillian how do you how do you deal with it um so if we're in the middle of a project with the signed contract at like rates from a year ago and they signed a contract with those rates i'll honor those rates till the completion of the project but if they come back with a new project i it's always hey these are these are rates for 2021 um and i think everyone generally understands that the cost of doing business and all these things needs to go up just like everything else in the world um we discussed it a little earlier um you know like clients sitting at the computer especially now you know and during a boring zoom meeting and um and researching furniture prices and so on uh how do you how do you react to them coming back to you kelly you explained it a little where you say listen you can perfectly buy this piece of furniture at your price but then everything else you're gonna do it yourself natalie how do you deal with that if that happens to you if i'm charging markup or commission i still charge even if they choose the item because maybe i spend hours searching for a coffee table and they find the coffee table a few you know weeks later by themselves i'm like okay i spent several hours so i'm still getting markup on that yep i just have something to add which i do the same as natalie where we charge the mark markup across the board otherwise i find we get into things where people start trying to source their own things or doing their own things to save the markup and it just becomes super complicated like if it's a one-off i'll say sure this like one item but that's it um but i there i feel like recently there have been challenges with clients actually challenging the markup on some stores that drive me crazy like restoration hardware where they offer a trade discount to the general public so you can for a hundred dollars by a membership that gets you the 20 trade trade discount and then clients kind of come saying well i can buy it at your cost anyways why am i going to pay the markup and it just you know i feel like some there are a few other stores you know a lot of what we do is custom and not retail anyways but sometimes we do have retail stuff and there are stores out there now that are following this model and it just totally in my opinion undercuts the entire industry and just makes it really tricky for us yeah i i personally on a personal level i agree with that um and also on a personal note you know i obviously discussed that topic with a lot of interior designers and i think actually that also it all starts at the very beginning in your communication um when you when you describe your value i think the values you know this industry is you know as a service provider you try to put everything behind the curtain that looks like work and you make it all look super easy to the client um and that is when the client doesn't understand why they would pay a markup on something that they find online because you as an interior designer you haven't explained to them all the work that goes into it at the beginning because if you explain to them how much convenience they get how much you know how much time you take in order to choose um things to draw them into a floor plan into an elevation and that you deal with the delivery with the warehousing with the claims with the installation with uh chip corners you know like you with the work room like you you name it if if you explain that to them at the very beginning of how much is involved in every single piece that you purchase for them i mean if i was a kind i wouldn't question the 20 to 30 markup anymore i would actually feel like i'm getting a damn good deal here um and i think but we are also trained to not talk about it because we are service providers and with that interior designer the customer doesn't know how much work each piece entails i don't know what you guys think about that i totally agree with that i think you know that's also part of that goes to my philosophy about the hourly that i tell clients like we've spent years creating a relationship with people i'm the one going to market and sitting on that sofa to tell you that it's good or you know it took it's ten years that i've learned how to draw this room in revit and yeah it took me an hour but that's because it took me 10 years to learn how to do this in an hour and so you should be paying me for all of that back work too and so i think it goes we we really get into the details i'm like the best client is someone who's ordered something from wayfair and got it and it was broken they tried to send it back and they couldn't and that's the best type of client because they already know the headaches that are going to come along with it and you can kind of sell that service a lot easier i would say one other thing too when clients ask about the markup is that i do just try and explain that there are so many hours that are unbillable like what you said kelly about going to design fairs um researching like all these things that you're kind of doing for all of your clients to stay at the top of your game but aren't necessarily billing a client for and so i try to explain to clients that that markup really covers our time to do product knowledge understand like the newest materials new technologies new code like because we're not really billing that to one person but it takes up a lot of our a lot of our week or our month trying to research new things and continue learning so one day one designer even went one step further and said it's actually you actually don't have to have a conversation about you know whether they're going to buy this piece or not you have a conversation about trust because the fact that they go and think like the motivation behind you know going online and trying to find that piece starts with assuming that you rip them off or that you don't know what you're doing you know and i think that is a tr breach and trust and i think it's just i found that very interesting and it for me you know my takeaway is how important it is to have this conversation at the beginning of a project and very candid and very honest so that it doesn't become an issue at the end um natalie and kate sparks asked a question and i think you're the perfect person to answer that i don't know why that happened to you though in the event that you need to fire a client how do you uh how do would you handle the project fee and what's already been paid versus what is still due i don't know whether that happened to you but um no i can't recall right now um but i usually have a retainer fee that it says you know at any point of the project if that client for any reason like wants to you know break the contract i keep the retainer fee plus all the fees that were paid up until that moment and also like in my contract um i have all the faces for payments spread out into like four or five phases at 50 usually goes up front so like i try to get the most money upfront as possible plus this retainer fee to to have you know security that i you know whether someone decides not to pay or walks away i'm taken care of this is to my advantage got it understood i got a lot of questions here also on you know the the shipping and now i i tried to summarize that because it wasn't clear to everyone and then you guys say whether it's right or wrong so i think you know you buy furniture and you or you know fabric wall covering and on the net price you charge an upward mark between markup between 20 and 30 percent then on top comes shipping and you handle shipping differently some of you say shipping i it's a lump sum of 15 on net and if the shipping goes over it i gonna go back to the client and charge them more if it's under it i see it's always a balance but it's a lump sum and some of you said well i just passed the shipping on and then i think jillian you said you put a mark up on the furniture piece and the shipping because you don't want to have the conversation about on what piece is markup on which piece is not markup so you say on everything i charge where cost is occurred uh we charge a markup is that is that right did i listen properly i find that freight especially in canada um is a lot more expensive than it is in the us and we're importing a lot from the us and so freight can be crazy on some pieces and you know next to nothing on others it's sort of unpredictable so it really just is our cost plus the commission or markup or whatever you want to call it yeah thank you um and then i got a lot of questions about you know what do you do about custom customers wanting more revisions customers texting you constantly you know there is if you go on youtube all of our sessions are recorded um you under business success skill webinars uh and benny frown and schumacher you know if you put this into youtube you see them there's also you know how to find uh your boundaries with your customer how to deal with your to your kind watch those webinars i think they're super helpful because there's a lot of tips in them on uh you know how how you get your next project how you find boundaries and so on and so forth um and yeah i i think the hour is already over which is crazy um it felt like three minutes um thank you to natalie kelly and you jillian you made this a go this time pass super super quickly and i know i will watch this again on youtube because there was a lot of information on here and in here that was super helpful um so again thank you very much and most of it you know thank you very much for being so open and transparent i really appreciate it and i know that everyone watching really appreciates that um we all need to stick together especially in a time where we are booming and where demand is high i think together we are all stronger and together we are benefiting more from it than um not you know so thank you and i hope to see you soon on one of your travels thank you thank you so much this was really fun all right thank you bye bye bye everyone