Featured on this episode:

• Join the wait list for The Designers Edge
• Grab Your Free Script Guide here
• Access the full video interview with Elana Steele of Steele Appliance here

What you will learn from this episode:

• How to calculate your real revenue gap in 5 minutes

• Why taking on more projects doesn’t fix underpricing

• What lost revenue actually costs you — beyond money

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Today is March 31st, the last day of the first quarter.

And I want to do something a little different. I want to walk you through a quick audit. Maybe five minutes. Back of the napkin. No fancy spreadsheet. You can use a Post-it if you want.

This will tell you more about your business than your QuickBooks has all year.

Because we’re going to look at the gap between what you earned this quarter and what you were actually worth. And then we’re going to talk about what that gap is really costing you — because it’s not just money.

If you’ve ever finished a quarter feeling like you worked constantly, but the revenue doesn’t match up with your effort, this episode is for you.

This is no judgment. Just clarity.

The Audit: What Did Q1 Actually Cost You?

This is not the pricing episode where I tell you to just raise your rates and send you on your way. That’s not helpful.

This is where we actually look at the numbers together. We’re going to do a quick, honest audit of the first quarter. We’re going to talk about what the gap between what you charged and what you earned is actually doing to your business, your creative work, and most importantly, your sense of self.

And I mean it when I say this is no judgment. There’s no room for that in this exercise or in any part of our business. The designers I know are not undercharging because they’re bad at business. They’re undercharging because the model most of us were handed just doesn’t fit the work we’re actually doing. And nobody sat us down and told us that. So we kept going. We kept showing up. And we kept leaving money on the table without fully realizing it.

It’s not a character flaw. It’s a system problem.

And today, on the last day of the first quarter of 2026, we’re going to look at it clearly.

Step 1: Count Your Active Projects

Grab something to write on. A napkin. A Post-it. That’s all we need.

Think about your first quarter — January, February, and March. How many active projects did you have?

Not completed ones. Active.

These are the projects where you’re showing up, answering questions, going to the job site, fielding contractor calls, managing decisions, and communicating with clients.

Write that number down.

Step 2: Pick One Project and Count the Hours

Now pick one of those projects. A real one. And think honestly about how many hours you spent on it this quarter.

Not the version you’d tell a client. Not the hours you billed for or the hours you planned for in your flat fee. The actual hours.

That includes:

• Job site visits
• Drive time to and from the job site or vendors
• Texts you answered at all hours
• Time spent reviewing drawings over the weekend because something was bugging you
• The contractor call that you thought would be 10 minutes and dragged on for 45
• The client email you rewrote three times because the situation was delicate and you wanted to get it right

Write down all of it.

Now go one level deeper. Think about the hours you didn’t write down even now because you felt they were too small to count.

The 10 minutes you spent looking up a product spec while eating lunch. The 15-minute conversation you had with a trade while you were in the car between two other appointments. The mental energy you spent at 6 a.m. running through a site issue before you even got out of bed.

None of those made it to an invoice. But every single one of them was yours. Your time. Your expertise. Your bandwidth. And they add up a lot faster than any of us want to admit.

Add those to your number.

Step 3: Do the Math

Now multiply your total honest hours by your hourly rate.

The industry average right now is $150 an hour. I know many of you charge more than that, and by the way, that just means this math gets bigger for you, not smaller.

Now look at what you actually invoiced or collected for that project in Q1.

Where’s the gap?

If you work on flat fee and the phase is still ongoing, do your best to estimate how much of that flat fee represented time spent in Q1. Divide it by the number of hours you actually spent and see what your hourly rate actually is.

Whether you’re billing hourly or flat fee, you will find your gap.

For most designers I talk to, that gap on a single project in a single quarter is somewhere between $750 and $2,000.

At $150 an hour, that’s between 5 and 13 hours of work that you did but didn’t bill for.

That might not sound dramatic on its own. But stay with me, because this is where it gets real.

Step 4: Multiply the Gap Across Your Quarter

Multiply that gap across three active projects, and you’re looking at somewhere between $2,250 and $6,000 in the first quarter alone. Even more if you’re managing more than three projects.

Now multiply that gap by four quarters.

If you’re running three projects, your gap — your lost income — is somewhere between $9,000 and $24,000 this year.

This is for work you already did. Work that happened. Work that took your time, your energy, and your expertise. It just never was invoiced.

Before you tell yourself that your number is probably on the low end of the range, I want you to sit with that assumption for a moment. Because in my experience, and in what I hear consistently from designers who do this calculation for the first time, most people underestimate their gap. We don’t overestimate it.

We forget how we spend our time.

Write that number down. We’re going to come back to it in a few minutes.

A Note for Newer Designers

I know that number lands differently depending on where you are in your career.

If you’re newer to this work, if you’re still in your first few projects, still building your vendor and trade relationships, still developing your processes, hourly billing makes complete sense right now. It’s honest. It’s transparent. And it gives you real data about how long things actually take. That data is genuinely valuable.

But here’s what I’d also encourage you to think about, even early on: track everything. Be very honest with your hours. Every hour. Every task. Every phase.

Because that data is exactly what will allow you to transition to flat fee pricing with confidence instead of guesswork when that time comes.

And I can tell you from the other side that the model that makes sense at the beginning quietly starts working against you long before most designers realize it’s happening.

In my professional opinion, the sweet spot is usually a few solid projects under your belt. That gives you enough to truly understand your real hours, and then a deliberate shift. Don’t tell yourself “someday” like I did. Make a deliberate decision with a timeline attached to it.

What Happens Next: The Volume Trap

So wherever you are right now, newer or more experienced, what I’m going to say next applies to both of you.

Because the gap you just calculated does not stay put. It triggers a decision that makes everything worse before it gets better.

When you realize the revenue you need isn’t where it needs to be, you make a decision. And the typical decision we make is we take on another project. Maybe two. Maybe more.

Because the math in your head says more projects equals more money. And that feels logical. It feels responsible. It feels like the only lever you have.

But let me be the first to tell you: the math is lying.

Because you’re not adding revenue by taking on more projects. You’re actually just adding volume on top of a broken model. Every new project you take on at an underpriced fee simply multiplies that gap. You don’t find yourself climbing out of the hole. You’re just digging it wider while having to run faster.

And what that volume actually costs you goes far beyond the money.

The First Cost: Bandwidth

The first thing it costs you is bandwidth.

There are only so many hours in a week and only so much of you available in those hours. When you’re spread across four or five projects to compensate for undercharging on each one, nobody gets the full version of you.

What they get is the version that’s already been partially used up by someone else’s project that morning.

And you feel that, even when you can’t name it in the moment.

Here’s what that actually looks like in practice. You’re on a job site for the Smith project, and your phone is buzzing with questions from the Jones project, and a contractor issue on the Miller project is sitting in the back of your mind unresolved.

You’re physically present on that job site. You’re standing there at the Smiths. But you’re not fully there. You’re scanning the room and checking boxes instead of really digging in and seeing it.

And the ideas that would have come to you if you’d had the space to be fully present? Those don’t come.

Not because you’re not talented enough. Not because you don’t care. But because there’s no room for them.

That’s the bandwidth problem. And it doesn’t announce itself dramatically. It just quietly shrinks the quality of everything you’re doing until one day you look at your work and wonder when it stopped feeling like yours.

The Second Cost: Creative Depth

Which leads directly to the second cost of underpricing: creative depth.

I’m going to be brutally honest. This one stings for me personally, and it might sting for you as well.

I became a designer because I think differently about space. Designers see things other people don’t. We make connections between how a family actually lives and how a room should actually function to support that. That’s our superpower. That’s what we should be leaning into on every single project.

But that kind of thinking requires time and mental space. It requires us to sit with a project long enough to go beyond the obvious solution.

When we’re managing too many projects to compensate for our own undercharging, we stop having that time. We find ourselves going to the first good idea instead of the best idea.

And let’s be honest: we know the difference, even if our client doesn’t.

When creative depth suffers, the consequences aren’t just invisible. Sometimes they’re financial.

When bandwidth is tight and you’re operating in “good enough” mode rather than “best work” mode, mistakes happen. The wrong finish is specified. A dimension gets missed. A fabric that would have been perfect doesn’t get sourced because there was no time to go deeper into that one item.

And those mistakes don’t just cost time. They cost money. And that loss often gets absorbed by us to protect the relationship and keep the client happy. Which means the project you already underpriced just got more expensive to deliver.

That loss is real. And it is directly connected to the bandwidth problem created by taking on too much work to compensate for charging too little.

It’s a vicious cycle. It feeds itself. And it’s unbelievably exhausting to be inside of.

The Emotional Cost

This is the part that doesn’t get talked about enough.

I have taken on extra projects to make up the gap. I have told myself I could manage it, and at the time, I meant it. I believed it.

But looking back at some of those jobs, the ones where I was stretched too thin, I wonder what they could have been.

And I want to say this in a very selfish way. This is not just for the client. This is for me.

Some of those projects had real potential. Beautiful bones. Clients who trusted me completely. And I didn’t have the bandwidth to take them as far as they deserved to go.

That is not a client failure. That is a pricing failure that rippled directly into the creative work itself.

When you’re financially underwater on a project, something shifts in how you experience it. You stop being curious about it, and you start just trying to get through it.

That resentment is quiet, but it is real. You might be a little less patient with your client, or a little less enthusiastic in a meeting, or a little less willing to push for the detail that would have made the room extraordinary.

The projects do get finished. They are beautiful. But perhaps they’re not as elevated as you would want. And you feel that, even when no one else can see it.

What That Number Actually Represents

Let’s go back to that number you wrote down. I want to reframe it.

Stop thinking about it as just lost revenue for a second, and think about what it actually represents in your life and in your business.

That lost revenue could be:

The assistant you keep saying you can’t afford, but desperately need. The one who would take the scheduling emails and the vendor follow-ups and the invoice tracking off your plate so you could spend that time actually designing. The one whose absence is costing you more in mental load than their salary ever would.

The slow season buffer that would let you say no to the client who gives you that bad feeling instead of taking the project anyway because you need the cash flow. We all know that client. The one where something felt a little off in the discovery call, but you pushed past it because the project was interesting, or the timing was convenient, or you simply couldn’t afford to say no. And then three months in, you’re managing the relationship as much as the project, and you’re wondering why the hell you ever said yes. That buffer, that financial breathing room, is what gives you the freedom to trust your instincts in that moment instead of overriding them.

The mentorship or program that you’ve been putting off because the timing never feels right. And here’s the thing about timing: it never feels right when you’re underwater. There will always be a reason to wait. The timing gets right when you decide to make it right.

The vacation that you canceled or the one you went on but couldn’t actually be present for because you were managing a project from the pool. I want to name something about this specific version of lost time because it doesn’t just cost you the rest. It costs the people around you. The ones who were there on that trip hoping to have you fully present and got a version of you that was half somewhere else. That cost is real, even though it never shows up on a spreadsheet.

The version of your business you keep describing as “someday.” The one where you’re working with the right clients on the right projects with enough time and space to do your best work. The one that feels sustainable rather than full-on survival mode. That version is not a fantasy. It is a pricing decision.

And it’s something else too, harder to name but just as real. It’s the self-respect that comes from knowing your work is priced at what it’s actually worth. From walking into a client meeting and presenting a number you built on your real, honest role and standing behind it without apology. From finishing a project and feeling that satisfaction of having been properly compensated for everything you brought to it.

There is a different quality to that feeling. A steadiness. A clarity. A sense of alignment between what you gave and what you received. That changes how you show up every single day. And it’s not just at work. It’s in all of it.

That feeling is not a luxury. It’s part of what makes this work sustainable long-term. And you absolutely deserve to feel it.

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Like this Episode?

Be sure to check out Episode #131: Building with Numbers: The Art of Pricing Construction Projects

Be sure to check out Episode #149: Pricing with Confidence Starts with Knowing Your Value

Be sure to check out Episode #249: The Invisible Work That’s Eating Your Profits