Home – New Forums Money matters Flat Fee Vs Hourly Rate

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  • #975907
    PeacockID
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    Hi, I am an interior decorator.

    I have looked up the many threads on this topic, and have use the online calculator to see if I was in the ball park. I was intending to charge 165.00 per hour and the calculator came in at 156. so that was a good indicator.

    I would be interested in how others charge for when they are a service biz, that sells advice / info plus products with a markup..

    If I was to do a colour consultation, about 20 mins drive from my office, (40 mins) return, with an allowance of about 60 – 90 mins consult time.

    If I charge a flat fee of 165, paid on the day, I then often have studio work to do, obtain colour swatches or fabrics, furniture etc. I have found that this can take 1 – 3 extra hours of studio research time, however is unchargeable directly.

    I don’t know if I should charge extra per hour, say $190, and therefore the extra covers my time in a small way, or charge 165 / hr, and therefore it would be 165 first consult plus a second 165 giving a total of 330.

    Therefore just charge $330 flat fee consultation.

    Often once the colours are chosen, clients don’t purchase fabric or furniture etc, so therefore there isn’t the opportunity to earn more via mark up’s on the products etc.

    When I have researched my competitors, they range from $120 for colours completed on the spot with no further studio time involved – the colours are just written down. to the upper end of the scale 350, when the decorator goes away and returns with swatches etc. – This is what I do.
    The average consult fee is about $150.

    If I communicate my services adequately, am I correct in charging a higher price, as 165 / hr minimum 2 hours and then fully explain all what they will receive.

    I dont want to price myself out of the ball park, but I dont want to under charge my self for my quality attention and service.
    Thanks Tracy

    #1077291
    Corey
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    what is a colour consultation? and what are your competitors charging? – flat rate or hourly rate?

    Cheers
    Corey

    #1077292
    PeacockID
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    Corey, post: 97443 wrote:
    what is a colour consultation? and what are your competitors charging? – flat rate or hourly rate?

    Cheers
    Corey

    Hi Corey

    A colour Consultation is when a person requires help in choosing the colours for the interior of a room or exterior colours.

    I arrive on site, we discuss the needs and requirements of what they would like to achieve, sometimes it can be completed on the spot, but usually I come back to the studio and put together paint swatches etc, and some information about the scheme chosen. The Swatches are something they can take with them when shopping for other decor items, flooring, furniture etc.

    I have secret shopped my competitors and it appears that the ones closest to my style work charge $150 flat fee incls paint only, $165 hrly fee and $350 flat fee. another does the work on the spot for $120, with no swatches etc. The first two have higher overheads than me as they both have shop fronts.

    Cheers Tracy

    #1077293
    ScopeDrafting
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    HI Tracy,

    This is always a tricky thing to get right. The problem is that quite often you dont know if you got it right or not until the end of the job or maybe the month when you can add it all up. The fact that you know what hourly rate you need is a big plus.

    The method of charging will probably depend alot on your customer and you are not going to please everyone all the time, so you have to do whats right for you.

    I charge a fixed fee, this suits the way I do business and my personality best, but a lot of my competitors charge on the value of the construction project or at a square metre rate.

    I ask lots of questions at the quoting stage to try and get a feel for how complex a job will be and then work out my fee from there. I also make it very clear what is and is not included and when they may be up for extra fees.(Eg Once they have signed off on the concept plan any extra changes will be more)

    I now have my prices pretty much right but it was a lot of trial and error before I found the right balance.

    Good luck

    Nathan

    #1077294
    dextereugenio
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    i charge by the hour but big projects are fixed.

    the problem i see with many people is that if they know theyre on the clock, they tend to make rash decisions or try not to give their problem due course. they start to get flustered close to the first hour and so fixed fees may help.

    though i totally agree with the “match the market” statement.

    better yet, try both and see which gets better results for you and the client.

    #1077295
    On-the-move
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    I find as a general rule where you are able to charge by the hour, this is to the advantage of the supplier as the job/project may run over the projected or budgeted time scale.

    Where as a fixed fee generally provides an advantage to the client due to the fact the expense is fixed and does not leave any room for error by the supplier at the quoting stage.

    Richard

    Darcy Bookkeeping & Business Services
    http://www.darcyservices.com.au

    #1077296
    Dardee
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    I have to disagree with Richard. If you can refine your processes and take less time doing the same job you can make more money with a fixed fee. On the other hand if you are on an hourly rate you actually earn less income for working smarter / quicker.

    Fixed fees are a win / win for supplier and client once you get your prices right.

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