How to Price Interior Design Services Without Undercharging

Pricing is the single most uncomfortable topic in interior design. We've watched studio owners visibly cringe when a prospective client asks "so how much do you charge?" They know their rates. They just aren't confident the number they give is the right one.

And too often, it isn't. The British Institute of Interior Design's 2024 Business Benchmark Report found that roughly 60% of studios undercharge in their first year of operation (BIID Business Benchmark Report 2024). Some never correct it. They build a client base that expects cheap work, and then wonder why they're busy all the time but barely profitable.

This guide is about fixing that. We'll walk through the three main pricing models, when to use each, how to calculate your actual cost floor, and what specific fee structures look like in Singapore and Dubai. If you're already profitable and confident in your pricing, you can skip this one. For everyone else, read on.

Before we talk about pricing models, we need to talk about the number most designers skip: your minimum hourly rate. This is the rate below which you lose money, regardless of how you structure the fee.

Here's how to calculate it:

1. Add up your total monthly overhead. Rent, utilities, software subscriptions, insurance, CPF contributions (in Singapore) or visa costs (in Dubai), marketing spend, and any salaries including your own. For a 3-person studio in Singapore, this typically lands between $15,000 and $25,000 per month.
2. Estimate your billable hours per month. Not total hours. Billable hours. If you work 45 hours a week but spend 15 of those on admin, marketing, and business development, you have roughly 120 billable hours per month.
3. Divide overhead by billable hours. That's your cost rate. For a $20,000/month overhead with 120 billable hours, that's about $167/hour.
4. Add your target profit margin. Most healthy service businesses aim for 20-30% net margin. At 25%, your minimum billing rate becomes $167 / 0.75 = roughly $223/hour.

Write that number down. Every project you quote should, when you work backwards from the fee, come in above this rate. If it doesn't, you're subsidising the client with your own time.

This calculation feels clinical. It is. But it prevents the slow-drip problem that kills small studios: taking on projects that feel busy and productive but actually generate less income than paying yourself a salary would.

The oldest and most common fee structure. You charge a percentage of the total renovation or construction budget. The industry norm ranges from 10% to 20% of the project cost (SIDS Industry Guidelines), though the specific percentage depends on project complexity, your experience level, and the market you're in.

When this works well: Large projects with well-defined budgets. Condo renovations, landed property redesigns, commercial fitouts. The client understands that a bigger scope means more design work, and the fee scales naturally.

Where it falls apart is on small projects where 10-15% doesn't cover your time. An HDB 3-room renovation with a $40,000 budget at 10% gives you $4,000 in fees. If you spend 60 hours on it (typical for a full renovation), that's $67/hour. That's almost certainly below your cost rate.

It also breaks down with high-budget, low-effort projects. A client with a $500,000 budget who mostly wants you to source furniture and coordinate contractors shouldn't be paying $75,000 in design fees for what might be 150 hours of work.

Singapore context: For HDB renovations in the $40,000-$80,000 range (Qanvast 2025 Renovation Report), most studios quote 10-15% or a fixed fee (see Model 2). For private condos in the $80,000-$200,000 range, 12-18% is common. Landed properties above $300,000 tend to sit at 10-15%, since the absolute dollar amount is higher.

In Dubai, the market is tiered more sharply. Studio apartments and 1-bedrooms: many firms charge a flat fee instead. Villas and penthouses: 10-15% of project cost is standard, with luxury interior design firms sometimes going up to 20% for full bespoke work. The Houzz Dubai Pro Survey (2025) reported fee ranges of AED 150-400 per square foot for luxury villa projects, which tends to land in the 12-18% range depending on the scope.

You quote a single number for the entire design scope. The client knows exactly what they're paying upfront. You know exactly what you're earning.

This works best for smaller, well-defined projects. HDB renovations where the scope is fairly predictable. Repeat project types where you can estimate your hours with reasonable accuracy. Also strong for clients who are price-sensitive and want certainty. "Your design fee is $8,000" is easier for a client to budget for than "10-15% of whatever the renovation ends up costing."

The risk is scope creep. The client starts with "just the living room and master bedroom" and gradually adds the kitchen, the bathrooms, the study. If your fixed fee assumed 80 hours and you're now at 120, you're working for free on those extra 40 hours.

The solution to scope creep is change orders, and they need to be built into the contract from day one. Your agreement should define the included scope clearly (by room or by deliverable) and specify the rate for additional work. This sounds obvious. About half the studios we've talked to don't do it.

How to set a fixed fee: Estimate total hours, multiply by your minimum billing rate (from the calculation above), and add a buffer of 10-15% for the inevitable revision rounds and coordination calls. If you estimate 80 hours at $223/hour, your fee is roughly $17,800. Round to $18,000 and add a scope boundary.

Some studios break the fixed fee into phases: concept design (30%), design development (40%), project management (30%). This makes the fee feel less like a lump sum and gives you payment milestones tied to deliverables.

This is the model that experienced studios tend to land on after a few years. You charge a design fee (either percentage or fixed) for the creative and project management work. On top of that, you earn a markup on furniture, materials, and fixtures that you procure on the client's behalf.

The typical procurement markup in the industry runs 20-50%, with most studios in the 25-35% range (ASID Compensation Survey 2024). The exact markup depends on the item category. Custom furniture often carries a higher markup because you're managing fabrication, QC, and delivery. Commodity items like paint or hardware might have a thinner margin because clients can easily price-compare.

When this works well: Full-service studios that handle procurement. The design fee covers your creative work, and the markup covers the very real effort of sourcing, ordering, tracking, receiving, inspecting, and coordinating delivery of every item in the project.

The model runs into trouble with clients who want full transparency. Some clients, especially in the luxury segment, push back on markups. They want to see the vendor's original price. If you're working with a client like this, it's better to switch to a flat hourly rate for procurement management rather than fight over percentage markups.

It also breaks down if you're not actually managing procurement. If the client is buying their own furniture and you're just providing a shopping list, there's no markup to earn, and your design fee needs to be higher to compensate.

The transparency question: Should you disclose your markup? Studios are split on this. Our take: be upfront about the fact that you earn on procurement. You don't have to disclose the exact percentage. "Our fee includes procurement and project management, and we earn a margin on items we source" is honest without inviting line-by-line negotiation. If a client insists on seeing vendor invoices, price that transparency into a higher management fee.

We've looked at dozens of studio pricing structures over the past year. The same errors come up over and over.

1. Pricing based on what competitors charge. Your competitor might have lower rent, fewer designers, or a partner who does accounting for free. Their cost structure is different from yours. Pricing off their rates instead of your own costs is a recipe for slow financial suffocation. Always start from your cost floor.
2. "Two rounds of revisions included" is reasonable. "Unlimited revisions" is a promise that will cost you. Every revision round is 5-15 hours of work. After your included rounds, charge hourly. Put this in the contract.
3. How much time does your team spend on coordination calls, site visits, delivery delays, and chasing electricians? That's project management, and many studios don't price for it. If your fee only covers "design" but the client expects you to manage the renovation, you're giving away project management for free.
4. Quoting before understanding scope. "Can you give me a rough number?" is the most dangerous question in client development. A rough number becomes an anchor. If you later realise the project is more complex, the client will hold you to the casual figure you threw out over coffee. Response: "I'll put together a proper estimate after our site visit. It takes about a week." Yes, some clients will go elsewhere. Those clients were going to be problems anyway.
5. An HDB 4-room renovation is a fundamentally different project from a 3,000 sqft villa redesign. Your per-square-foot rate, your hourly rate, and your percentage structure should all reflect that. Studios that quote the same percentage for every project type are either overcharging small clients or undercharging large ones.

Here's a step-by-step you can use the next time you need to put a number on paper.

1. Estimate total hours. Break the project into phases: initial consultation, concept design, design development, material selection, procurement management, site supervision. Assign hours to each phase based on your experience with similar projects.
2. Multiply by your minimum billing rate. This gives you your cost floor for the project.
3. Choose your pricing model. Percentage for large projects with clear budgets. Fixed fee for smaller, well-defined scopes. Hybrid for full-service engagements.
4. Sanity-check the number against your hourly floor. If the fee, divided by your estimated hours, comes in below your minimum billing rate, either increase the fee or reduce the scope. There is no third option.
5. Build in scope boundaries and revision limits. "This fee covers design and procurement management for the living room, master bedroom, and kitchen. Additional rooms are quoted separately at $X per room. Two design revision rounds are included; additional revisions at $Y per hour."
6. Present the fee with confidence. Don't apologise for your pricing. Don't offer a discount before the client asks. If you've done the math correctly, your fee is what it needs to be.

One more thing. If you're using software that tracks your actual hours per project (and you should be), review your estimates against reality after every completed project. Most designers underestimate their hours by 20-30% on the first few projects. That data is gold. Use it to calibrate future quotes.

Charge what the work costs. A healthy business that prices correctly can afford to do excellent work. Studios that undercharge burn out. Studios that price correctly have the margin to invest in better materials, spend more time on details, and still pay their team properly. That's better for everyone, clients included.