FEATURED ON THIS EPISODE:

INTERIOR DESIGNER’S GUIDE TO CONSTRUCTION MANAGEMENT

WHAT YOU WILL LEARN IN THIS EPISODE:

WHY YOU SHOULD BE INCORPORATING MARKUPS IN YOUR BUSINESS MODEL

MARKUPS IN CONSTRUCTION MANAGEMENT IS THE SAME AS IN YOUR INTERIOR DESIGN BUSINESS

WHY WE NEED TO VALUE OUR OWN EXPERTISE

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The difference between a hobby and a business comes down to money.

If you are not making enough money, then you are a hobbyist. I don’t say that lightly because I know that is not your intention if you’re listening to this podcast week after week. 

Markup for products

I talk to designers all the time about construction, and a lot of pushback I get is, “Oh, I could never mark up for products. That’s the contractor’s business.” And my response is always, “Why? Why is that only allowed to be their business model?” 

If you’re not marking up products in your construction projects, you are chasing time, which will not advance your business. 

Ask yourself how many days a week you want to work or can work. How many days of the week do you think will be billable? How many weeks of the year are you planning on working? Start running those numbers. 

Even if you’re a flat fee, you’ve determined an hourly rate along the way. Whatever number you’ve come up with, that’s the most you can make this entire year. You will create a ceiling for yourself that you just can’t break if you aren’t making markups. 

How to start making markups in your business

Start by asking yourself how you do it with your decorating clients. What is the difference? Simply that it’s stone, tiles, and cabinetry versus sofas, rugs, and accessories? Those are just objects. The principles are the same. 

On a decorating project, you’re getting paid for your expertise in designing, layouts, and selections, and then you’re also being paid for the items you specify. It’s the exact same process on a construction site. 

Some of you may be saying, “Well, the contractor won’t let me.” And I get that. I run up against that on every project. But I also get to profit from procurements for every project I’m working on. It may not be the same items, but I always negotiate to make procurements. It’s my business model. 

That may make some of you feel uncomfortable, thinking you have to negotiate with your contractor, but again, it’s a business, not a hobby. 

This is not the only business where this happens. In everyday life, we are paying for services and we are paying for markup on products. If you go out to dinner, you opay for the service as well as a markup on the product. I can assure you that $42 filet didn’t cost the restaurant $42 to purchase. You are paying your server a tip for their service, their expertise and you don’t think twice about it. 

Your clients have hired you for your expertise.

That is a luxury service, and therefore, agreeing to your business model, just like they are when they’re hiring a contractor. So that means it’s incumbent upon us to value our own expertise, and frankly, I think that’s where the problem comes in. 

What is the best way to value our own expertise?

Start by looking yourself in the mirror and say, “I am really badass at my job.” And then say out loud 3-5 things you’ve done that has added value to your client’s project. 

How do you charge for your worth?

You educate your clients.

You’re transparent about it. You understand the benefits they will receive, and you share that. A client is looking to you to tell them how you can help them. Maybe you’re already doing a lot of that. But make it clear and transparent from the beginning so they understand the value you are now requesting them to pay for. That includes markups. 

Be confident in your contracts.

You can put anything you want in your contract as long as your client agrees to it.

But once you start shifting the narrative to yourself, feeling insecure about making money from procurements and seeing it as standard business practice in many industries, you will start normalizing the idea, and it will be much more comfortable talking to clients and industry partners about it. 

You will eventually reach the point where you firmly believe, without even thinking, that you deserve to profit from your time, expertise, and the products you specify. 

If a client says no to your request, then they aren’t your perfect client. It has nothing to do with you. Move on. There are clients who will say yes, and they are the ones you want to pour your value and expertise into. They are the ones who will value your service, which is what we all want in every project. 

Money Mindset

You can change your money mindset by reframing your value. Shift your focus from the cost of working with you to the value of working with you. Think about the luxury value you are bringing to your clients. You will circumvent so many issues – you will save them money! Because you are the one there steering the ship, avoiding mistakes, fine-tuning the budget, and on and on. Those clients are extremely lucky to have you on their projects. Those contractors are extremely lucky to have you on their projects. 

Lastly, you must celebrate your wins!

And I don’t mean landing the biggest project you’ve ever gotten. I mean, every day, celebrate a win. Don’t compare it with anyone else’s wins. If it’s a win for you, that’s all that matters. 

I hope today’s episode gives you some new insight and inspiration, as well as hopefully a few actionable steps you can start taking today. Don’t wait to change your money mindset issues and to boost your security, knowing your value and worth in ways that you can start charging for immediately!

As always, please feel free to reach out to me! Email me at renee@devignierdesign.com or send me a DM on social media.