It’s time we talk about pricing for interior designers. It’s typical for new designers to low-ball their pricing for projects. But just because it’s typical doesn’t mean it needs to be your fate too! What is the number one reason designers struggle to turn what they love into a profitable business? How do you logistically make the jump from hourly to value-based (or flat-fee) pricing? Michelle Lynne Pant is here to answer all these questions and more! 

Michelle is the CEO of the award-winning interior design firm, ML Interiors Group, which started in 2008 and has grown into a sizable force. This is one of our realest and rawest conversations yet on this podcast! Be sure to grab your notebook and pen because this conversation is packed and you’ll likely want to change your pricing model after you hear it. Make sure to stick around for The Coaching Corner at the end of the conversation! 

In this episode, we cover:

• The #1 reason designers struggle to turn what they love into a profitable business 

• How to deal with PITA clients and if you should adjust pricing for those instances 

• How to logistically make the jump from hourly to fee-based pricing  

• What it means if you’re not celebrating potential clients saying “No” 

• How and when you should say “No” to a potential design client 

• The best way to sell furniture to your design clients 

• How to get ahead of clients shopping your services and products  

• How to educate clients about your scope of work for a project and the associated fees 

• Whether to make the sales and onboarding process easier for you or the client 

• How to manage client timelines and budgets 

• How to use a value-based or flat-fee pricing model in your firm 

• How to plan for the unplanned 

Think you’ll change your pricing strategy after hearing this conversation? Find Michelle and me on Instagram so we can cheer you on! 

More about Michelle Lynne Pant

Michelle is the CEO of the award-winning interior design firm ML Interiors Group and leads the year-long program, "The Interior Design Business Bakery," which coaches designers on how to scale their business from 5 to multiple 6-figures in revenue with profit & passion "baked in."  

Links and Mentioned Resources

Guide to Choosing Your Pricing Model for Your Design Firm

Coaching Strategy Session 

Rolling in the Dough workshop 

How to Hire a CPA w/ Kate Snelson 

Connect with Michelle Lynne Pant

Instagram 

Website 

This episode is brought to you by Nello Marelli

Struggling to stay ahead with the ever-evolving design trends while running your business? Discover the secret weapon of the design world - the 2025 Nel Colore Color Trend Book. Crafted by the renowned Italian designer Nello Morelli, whose expertise guides luxury brands from Milan to Paris, this tool is now stateside with our partnership. Get exclusive access to future color trends, combinations, and sociological insights up to two years in advance, ensuring your designs stand out. Elevate your projects and leave the trend-watching to us. Find the Nel Colore Color Trend Book, along with a mini version, exclusively in The Studio. 

Connect with Katie Decker-Erickson

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More about Colorful Conversations with Katie

Welcome to “Colorful Conversations with Katie”! Join us for a vibrant webcast where we seamlessly blend the realms of design and business in a fun and professional setting. Available on YouTube or any of your favorite podcast platforms!

Hosted by the dynamic Katie, a seasoned expert with nearly 20 years of experience in both fields, this engaging series promises to ignite your creative spark and sharpen your entrepreneurial acumen. From exploring the latest design trends to uncovering strategies for building successful ventures, we dive deep into the colorful world where aesthetics meet profitability.

Whether you’re a budding designer or a savvy entrepreneur, this webcast is your go-to source for inspiration, insights, and a dash of lively conversation. Tune in and let your imagination, business and life take flight!

This post may contain affiliate links, so I may earn a small commission when you make a purchase through links on my site at no additional cost to you. 

This episode of Colorful Conversations with Katie is brought to you in partnership with Leah Bryant Co.

The unedited podcast transcript for this episode of the Colorful Conversations with Katie podcast follows

Katie (00:01.261)

Hey Michelle, welcome back to the show.

Michelle (00:03.478)

Hey, Katie, it's good to see you. Thanks for being here.

Katie (00:06.745)

Oh my gosh, I could say the same thing. We love it. I was just saying to our producer, Leah, who's fabulous. I'm like, Fridays are fun. Fridays with Michelle, fabulous. We're so glad you're back. Oh my gosh, I know. I wish I could add like a little something special to this. Yeah.

Michelle (00:15.95)

All we need is a cocktail in our hand.

Michelle (00:22.158)

hydrated with my water but that's okay you know sober curious

Katie (00:25.429)

I feel that. I know, right? It's so true. I'm always like, how can I drink this much water and have my skin still look ragged and wrinkled and all the things? I'm like, we're hydrating internally, people.

Michelle (00:35.734)

Oh, I'm going to say a big fat whatever on that.

Katie (00:40.513)

Oh, you're too kind right back at you. And I'm so excited to have you on today to talk pricing because I think this is the number one thing designers struggle with. And you have done a fabulous job in your business of cracking the code.

Michelle (00:53.794)

Thank you. I wouldn't say it's perfect, but it definitely works well for me and the people I've coached on it.

Katie (01:00.029)

Yes, I totally agree. So let's talk about it. Designers who are struggling making profit. What is the number one reason why you are seeing designers struggle to take what they love and turn it into a profit-making endeavor unapologetically?

Michelle (01:15.498)

I think there's two components to this. And one is still working on the hourly model and usually not billing for all of the hours that they work. Plus, you kind of top off when you're good at your job. You're faster, so you make less money. So there's that. And then also not selling furniture with a profitable margin.

Katie (01:23.509)

Yeah.

Katie (01:32.091)

Mm-hmm.

Katie (01:41.461)

Yes.

Katie (01:45.005)

Yes, yes, I so agree. I so agree with you. I think of that concept. You always hear it in the medical world, but you're not paying me for the work I'm doing, you're paying me for the work I have done because there are efficiencies that come with time and we've all designed how many bathrooms. At this point, you can probably design a bathroom in your sleep with one arm tied behind your back, right?

Michelle (01:45.894)

So I think those two go hand in hand.

Michelle (01:58.621)

Yes.

Michelle (02:08.637)

Exactly.

Katie (02:09.853)

Which is why you push a different model. Tell us about the model that you have found works for your business.

Michelle (02:16.366)

So my team at ML Interiors Group, we used to work on an hourly basis. And it was just, it was a nightmare. One client thought that they could negotiate the hourly rate. Yeah, and then we become a commodity because they're just looking for a good deal. And then of course we didn't bill for all of the hours spent. Like how do you bill a client for time? You think about them when you're in the shower.

Katie (02:24.781)

Hmm.

Katie (02:28.137)

Ooh, that makes me cringe. Yep.

Katie (02:38.662)

Yeah.

Michelle (02:42.198)

I mean, that's just kind of awkward, right? But you're thinking about the project when you're making dinner. Yeah. Yeah, exactly. Yeah, so what we have done and what I teach now in my program is it's a flat fee. And when you think about this, Katie, you can go back even to say your cell phone bill. Remember we used to be charged by the number of minutes that we used?

Katie (02:44.586)

Agreed. I was shaving my legs and I thought about your bathroom and awkward, yeah.

Katie (02:58.518)

Hmm.

Katie (03:05.418)

Yeah.

Katie (03:08.685)

Great analogy.

Michelle (03:09.246)

And so you never knew exactly what your bill was gonna be. I think clients felt the same way. And then as a business owner, my cash flow was difficult to anticipate. So when we do a flat fee, clients are just ecstatic. They really dig it because you say, here's the design fee. It's not gonna be any more, it's not gonna be any less. This is what it is. You take it, you like it, right. And so that's what we've done. And I'll tell you, it has been a game changer.

Katie (03:24.634)

Mm.

Katie (03:28.781)

Hmm, no surprises.

Michelle (03:38.69)

for the design fees. And I can predict my income from a cashflow standpoint, simply based on the design fees. And the clients are like, well, that might be a little bit more than what I was expecting, but at least now I know I'm not gonna get an invoice every two weeks. And what in the heck, it took you how many hours to do what? Because then they also wanna see.

Katie (03:39.221)

Hmmm

Katie (03:44.139)

Yep.

Katie (03:48.269)

Hmm.

Katie (03:56.587)

Yes.

Katie (04:00.429)

That's such a key point. Right, well, and I don't think they understand because we all don't know what we don't know. How many hours actually go into producing quality designs, quality renderings, intentional thought, appropriate heights, elevations, an actual set of plans someone can build from.

Michelle (04:20.014)

Well, and even the design domino effect, you change one thing and it might just, you know, take on a completely different personality in that room.

Katie (04:28.281)

Yes, yes, yes. So how do we go when you went to flat fee, huge transition point based on square footage, based on did you look at your KPIs over the last year and pull your metrics? Or how did you logistically make that switch? Because I feel like most designers are on hourly. And to your point, which I think if you guys didn't hear, this was so critical. If you have clients wanting to negotiate your rates, this is why you really need to consider.

Michelle (04:45.026)

yeah

Katie (04:58.177)

this model.

Michelle (04:58.294)

Absolutely, we did. So I tried a few things, honestly. This was just the final iteration of what we landed on. And basically what I had been doing is I was trying to go through, I knew that I wanted to do a flat fee. So what I was doing is I was just trying to compile every single component of the design and assign an hourly timeframe to it.

Katie (05:03.426)

Yeah.

Katie (05:24.107)

Sir.

Michelle (05:24.138)

And that just became so incredibly cumbersome and laborious for new projects. We took the square footage model based on a conversation with a builder because he was talking, this is what I charge per square foot. It just like one of those light bulb moments. And it was like, oh, well, if they're already talking in square footage, why can't we talk in square footage as well?

Katie (05:27.857)

Yeah.

Katie (05:35.391)

Mm.

Ah.

Katie (05:42.9)

Yeah.

Katie (05:48.878)

Right?

Michelle (05:51.846)

And so we did go back and we took some of the data that we had been tracking hourly and projects. And while we didn't have the, we kind of had to Frankenstein together some of the square footage on different parts of different projects. And then we just started coming up with a range and testing it and increasing it and increasing it and increasing it over the course of the year and really just tweaking it based on client feedback,

Katie (05:57.273)

Hmm.

Katie (06:06.576)

Yep.

Sure.

Yeah. Nice.

Katie (06:21.662)

Yeah.

Michelle (06:21.882)

Oh, well, we didn't charge enough for that particular project. And oh, we look at this is how, and then you just back into the hours like, okay. So this project took a lot longer than what we charged for. Sometimes you're the bug, sometimes you're the windshield. And so we just had to do a post-mortem on all of the projects. So, and then we tweak and we tweak and we tweak, and then we came up with the model and that's what we do.

Katie (06:25.708)

Hmm.

Katie (06:41.177)

I love you. Oh my gosh, that's great.

Michelle (06:51.25)

at ML Interiors Group and in our program.

Katie (06:51.66)

Yeah.

Katie (06:55.145)

And I find, how do you calculate for this? Because there are clients that you see coming and you're like, I see you, you're gonna be high maintenance. I know you're gonna be high maintenance. And we have a different price point for high maintenance. Yep, pain in the ass tax. Yep. Okay, so you do the same. Okay.

Michelle (07:03.651)

Mm-hmm.

Michelle (07:08.766)

We call it the PETA pricing. Mm-hmm, yes. Yes, absolutely, absolutely.

Katie (07:17.621)

because you just know there's gonna be those people. So you're still making accommodations for potentially the size of the project and also the personality of the client.

Michelle (07:26.77)

And we also have it built into our contract. So getting a little bit off topic, but adding to it is in our contract, we have, you know, we are, this price includes X number of visits to the project site. So we, but if we need to go out there more, let's just say something's going off the rails or somebody's calling or whatever, then we'll go out there. So we'll go out there as often as we need to.

Katie (07:30.225)

Oh, please do.

Katie (07:42.405)

Yeah, it's still got to be quantifiable.

Katie (07:51.512)

Mmm.

Michelle (07:55.138)

but it also allows for up to X number of site visit requests by the client. Because this actually came from a, what was her name? It was Elizabeth's sister, Megan, her name was Megan. And no, it wasn't her, it was another client. It was another client. But yeah, I get distracted. It was basically, hey, can you come out and take a look at this grout? I think it might.

Katie (07:55.476)

Mm-hmm.

Katie (08:02.515)

Nice.

Katie (08:11.647)

Yeah.

Katie (08:15.361)

I'm out.

Michelle (08:23.534)

I think it might be a little bit too gray. You know, can you take a picture of it please and just send it to me? No, I need you to come out. It was just these were, I had a string of these bored housewives that just needed a friend or company. And it's like.

Katie (08:29.642)

Right.

Katie (08:36.133)

Right. Oh, this is why I got into commercial. I'm like, I can only have so many cups of coffee with you and hear about the misery that is your marriage, even though you're married to a doctor, making an insane amount of money before I ripping my hair out.

Michelle (08:43.712)

Yeah!

Michelle (08:48.814)

Uh-huh. Yes, and so we just, we work that in. Now there are gonna be individuals and we have different benchmarks and so forth that say you have to make decisions quickly or whatever the case may be, but we do still have the PETA pricing. And in fact, we just got a client who said we were too expensive. And I was like, oh, thank the Lord, because I built in that PETA factor, that little birdie in the gut that said,

Katie (08:53.727)

Smart.

Katie (09:00.329)

Yeah, you gotta have that.

Katie (09:12.745)

Yeah, we didn't want him.

Michelle (09:18.542)

We just dodged a bullet and you know how often do you celebrate when somebody says no?

Katie (09:20.386)

Yeah.

Katie (09:24.769)

You know, yeah, and if you're not, it means your pricing isn't right. You aren't listening to your intuition enough, or you don't know your target market well enough, and you need to sit in that space for a hot minute, because you should not only celebrate, but like even before you get to the celebration, you should feel comfortable and confident enough to be able to say no to a potential client.

Michelle (09:27.882)

Mm-hmm.

Michelle (09:33.922)

Right.

Michelle (09:41.377)

Mm-hmm.

Absolutely. Yes, and that's one of the best feelings. And I've told clients in the past, we're not gonna be the best resource for you. I don't wanna embarrass myself and disappoint you. And they've thanked us for that. And I'm like, well, that's just the way I felt. This other one might've been okay. Part of my team thought they'd be okay. I wasn't so sure. So we just built in the PETA factor and that's okay. We've got some other really badass projects lined up.

Katie (09:49.178)

Ah, yes. Yes.

Mm-hmm.

Katie (10:05.496)

Yeah.

Katie (10:11.517)

Yeah, and well, the universe sorts it out. Yeah. And people you want to work with. Where else in the pricing model you mentioned furniture? That is so legit. If you were designing and you were not selling furniture, this next part is for you.

Michelle (10:13.13)

people we love. Yes. Absolutely.

Michelle (10:20.682)

Yes. Ah.

Michelle (10:29.414)

let's also talk about selling furniture that is only sold to the trade. So I was just talking to somebody the other day. Right, and even if you do get shopped, we'll talk about that because I have that in my contract as well. So if you're new in the industry, selling furniture is not necessarily going and getting the 20% discount from Pottery Barn and

Katie (10:34.662)

Agreeed.

so you don't get shocked.

Katie (10:56.793)

Thank you. Yes.

Michelle (10:57.922)

charging your client retail there. So it's literally having your resale certificate, your business, your EIN number, all of these things that are establish you as a business and you set up accounts where you buy wholesale from vendors who will not sell to the public. And then you turn around, yes, you sell it to your client. And I think part of selling it to the client is also telling them that's what you're doing.

Katie (11:10.55)

Yes.

Mm-hmm.

Katie (11:19.009)

You become a distributor. Yes.

Katie (11:28.382)

Yep.

Michelle (11:28.842)

is telling your client, hey, here's where my profit comes from. Here's how I stay in business. The design fees and selling the furniture. And when you're straightforward with the client, because a lot of times they'll ask for part of your discount because they've read that that's feasible or because somebody down the road charging $75 an hour who does it as a hobby.

Katie (11:36.641)

Hmm. Yep.

Katie (11:46.766)

Hmm.

Katie (11:57.493)

Yeah.

Michelle (11:58.786)

is has this and they pass it on to their clients. Well, that's not a way to be profitable. And so the thing is, is you can buy it 50% off of retail, 60% off of retail, 40% off of retail. It just depends on the vendor and your volume. So that has been just another game changer when we because I used to be the ones who was going to HomeGoods and

Katie (12:04.85)

No.

Katie (12:12.351)

Yeah.

Katie (12:17.229)

Mm-hmm.

Michelle (12:25.574)

Oh, I'm going to sell this for more. Like it says it should be this. I'm going to buy it at this. And then I would sell it. I thought I was making money. And then somebody mentioned wholesale and I was like, what is that? And the whole world just opened up.

Katie (12:25.772)

Yeah.

Katie (12:38.073)

120% and what most people don't realize too is when you walk into a standard furniture store the average markup is 300%. So if you're walking into that big box furniture store and you see a chair for 300 odds are they're paying 100 bucks for it at most. It's a 300%. Why are you giving up that margin? This is your opportunity to capture that. And then I want to talk about the getting shop thing in a minute too and getting that into the contract.

Michelle (12:39.658)

Mm-hmm.

Michelle (12:57.614)

Alright.

Michelle (13:03.694)

Mm-hmm.

Katie (13:05.697)

but I feel like most designers are afraid. They're like, Michelle, you said EIN, you said I have to get a retailer's certificate, I have to get like, and these terms can seem really scary, but this also takes us back to one, go find an amazing CPA, and we'll link to that in the show notes so you can see how to have that conversation if you need help walking through this. But it is a lot less scary than you think.

Michelle (13:17.218)

Absolutely.

Michelle (13:32.394)

Well, I remember the first time I ever heard of an EIN because I started my business just thinking, oh, this should be easy, right? Foolish me, foolish, foolish me. I was standing in the CVS here in Dallas and I was on the phone with somebody saying you need to have an EIN number. And I was like, oh, okay. And then like I hung up with, and I think it was a vent, I don't know what it was.

Katie (13:41.581)

We don't know what we don't know.

Katie (13:46.269)

Oh, that's awesome.

Michelle (13:57.878)

but I can tell you where I was, I can picture it, and the feeling that was in me was this of sheer panic. It's like, I have no idea what this is. So here I am standing there with a little red basket hanging off my arm, and I had this feeling of anxiety, because I'm sure I had some sort of deadline, because when you're just starting out, you don't know anything, so everything takes twice as long. So I'm trying to accomplish something, and it's like, you're moving through sludge. So then I'm Googling, what is an EIN number, and where do I get it?

Katie (14:02.882)

Yeah.

Katie (14:12.781)

Totally.

Katie (14:18.841)

It's so true.

Michelle (14:27.998)

An EIN number is an employee identification number, I believe, employer identification number. And even if you're not employing people, you can simply apply for it, but it's kind of the foundation of your business in order to get a bank account, in order to get a resale certificate, things along that line. So...

Katie (14:44.937)

Especially if you don't want it linked to your social security number, which is so important for liability. You want your business to stand on its own. I mean, ideally, if you ever want to sell your business someday, you don't want this all linked to your social security number or you want to give it to your kids or whatever. You need this to stand on its own.

Michelle (15:03.51)

Very much so. So that's why you also get a separate bank account so you're not co-mingling your money with your client's money and all the other things.

Katie (15:10.889)

Agreed. Okay, let's talk about... Michelle, I want to shop it. Michelle, I want your 20% from Pottery Barn. How do we get ahead of that?

Michelle (15:21.086)

you, I think part of it is just that educational aspect on the front end. So there's, there's two parts. One is we walk our clients through a process. It's the, the initial qualifying slash discovery call. And then we do what I think is the secret ingredient. It's the virtual meet and greet. And then we do the initial visit and then the scope of work presentation in the meet and greet and in the scope of work presentation, we're actually walking through a series of slides. And I have a little

Katie (15:27.948)

Yep.

Mm-hmm.

Katie (15:39.891)

Yep.

Katie (15:49.037)

Hmm.

Michelle (15:50.386)

I have a visual that shares with them, here's the fees and the expenses, the investment, whatever you want to call it, that you can anticipate through our process. And they're relative in size. So your purchases are going to be larger than your design fee. And I literally tell them, here's how I make my profit, is my design fee and selling the furniture. Here's the other fees that you can anticipate, like the receiver and procurement and the contractor.

Katie (15:57.653)

Sure. Mm.

Katie (16:11.445)

Nice.

Michelle (16:18.926)

You know, these are not, this is not a profit center for me. But this is what you can anticipate because they don't know what a receiver is. They don't know that we're charging for procurement. Things along that line. So we share it with them then. And we used to, we don't as much anymore because thankfully as we've grown, we've become more sophisticated and we attract more sophisticated clients. So in the past, we used to share with them,

Katie (16:23.339)

Right?

Katie (16:30.422)

Yeah.

Katie (16:46.019)

Yeah.

Michelle (16:49.254)

we do our best to sell the furniture to you below retail. Okay, so now, you know, we basically will tell them we sell it to you basically at maybe a little bit below retail, just depending on the vendor. But our clients are not looking for, you know, the $50 off of something anymore. So for the younger designers, that's a great way to get your foot in the door and to ease into the conversation with the client.

Katie (16:54.017)

Yeah.

Katie (17:07.218)

Yeah, you have a better client.

Katie (17:16.225)

Mmm.

Michelle (17:16.722)

If they ask the answers, no. So it comes back down to how do we value ourselves and our services? And it's that insecurity. And I think a lot of it comes down to, it's either we're as women and designers, just our hearts are oftentimes people pleasing. And we want to take care of people and we wanna make them feel good.

Katie (17:19.505)

Mm-hmm.

Katie (17:37.481)

Yes.

Michelle (17:41.282)

but at the end of the day, are you willing to do that in exchange for your own sanity, your own profitability, your family time? Like once you reframe it and you have a hard time saying no, stop and think about it. You're taking food out of your children's mouth. You're not putting money into your children's college fund or whatever that looks like. And what I've done with clients back in the day is I tell them,

Katie (17:49.823)

Hmm.

Katie (18:08.769)

Hmm.

Michelle (18:10.998)

This is, well, first of all, this is my profit center. But secondly, it's like you don't go walk into a steak house, order a $60 steak and ask them how much they paid for that piece of meat, do you? And then do you ask them to charge less or pass on part of their pricing? You don't, like seriously, you can go buy a $15 bottle of wine at the grocery store and pay $50 for it at a restaurant, you don't ask them.

Katie (18:13.824)

Mm-hmm.

Katie (18:22.461)

Yeah, fair.

Katie (18:39.097)

Absolutely.

Michelle (18:39.85)

Like, I drink this stuff at home, I only pay 15 or 19 dollars for it, why are you charging me 50 or 60? Or whatever that looks like. So by understanding that as the business owner that you have the right to say no because you're a business owner, you're not just a quote unquote a designer. It's hard to sometimes distinguish because so many of us are solopreneurs.

Katie (18:54.745)

Mm-hmm. Yeah.

Katie (19:02.089)

Yeah, yeah. No, I think you hit a very key point there, an extremely important point, and I would even take it one step further. You're not just hurting yourself, but you're hurting the industry. Because now we're painting an expectation industry wide of one, I can negotiate fees, two, I should be getting your trade discounts. You don't ask your doctor for a discount on your medication, right? Like, but of course he has samples back there.

Michelle (19:12.429)

YESS

Michelle (19:23.607)

Right.

Katie (19:26.625)

but you're going and you're going to the pharmacy and paying what you're paying. Same idea, the stake analogy is great. I think it's so incredibly valuable because we need to start, this is again, educating your audience, educating your clients, but we have to stop creating the expectation that, oh, you can have a discounted design fee. Oh, you can have discounted furniture. If they weren't buying the furniture from you, they would be buying it from a furniture store. Is that furniture store not gonna mark it up even on the...

Michelle (19:29.974)

Yeah.

Katie (19:55.009)

Best Labor Day sale? Of course they are.

Michelle (19:57.87)

Absolutely. The difference is that we just have to stand in our power and say that's not my business model. And oftentimes, I mean, seriously, our clients are professionals. They're used to getting what they want. They're used to asking some difficult questions. That doesn't mean we have to say yes. So just because they ask does not mean that.

Katie (20:02.934)

Yeah.

Yeah, absolutely.

Katie (20:13.063)

Yeah.

Katie (20:18.413)

Fair. Ooh, ooh, did you guys just hear that? Yeah, say that again, Michelle, it was so good. Ha.

Michelle (20:26.251)

Just because they ask doesn't mean we have to say yes.

Katie (20:29.109)

You hear that you guys do permission to say no. And it also, I think we're so afraid of saying no is women because we're afraid one, back to people pleasing. They're not gonna like us or two, we're not gonna close the sale. That is not the case. You can say no and have them deeply respect that you're a woman of business because like you said, most of them are professional and they appreciate business and go, okay, I'm tracking with you. You have your business, I have mine. I can see why you wouldn't wanna do that. I respect that and I'll do business. Right, but I had to ask, yeah.

Michelle (20:53.622)

Right. But I had to ask.

Mm-hmm. Yeah, that's my husband. Yeah, he would ask the answers. No, but there's it's not because he's an am I allowed to swear It's not because he's an asshole like our clients are generally not assholes But we feel like it when they ask and we're forced to say yes, but nobody's forcing us to say yes

Katie (20:58.873)

That's such a key point. Yeah.

Katie (21:07.309)

Please do. We keep it a little real.

Katie (21:14.431)

No.

Katie (21:18.333)

Yeah. Yes.

No, and what you are saying, them asking, is not a reflection on you personally. I think as women, we have to get over that. They're not second guessing you personally. They're coming in to negotiate. It's a strategy on a business transaction. You don't need to be offended. It's not a reflection on you. And by the same token, that gives you the power to say, I know who I am. I know what I can present to you.

No, I'm not going to discount it because I know what you're going to get. It's going to be that great procurement. It's going to be that awesome install, which a lot of people don't think about because you order a pillow from Pottery Barn. It shows up in a box bubble wrap to your door. There's you just.

Michelle (21:56.906)

And it's just one click, put it in the cart and pay. It's not all of the other details that go into it.

Katie (22:00.097)

So true, right? Which is we know like all of the ordering, the tracking meager, it arrived at the warehouse, it wasn't damaged, the box wasn't damaged, they can find it on install day, it ends up on the right couch on install day. Like they aren't thinking through that until we explain that to them and show them the value add of what we're doing that justifies those fees.

Michelle (22:13.13)

Yes.

Michelle (22:22.03)

Absolutely, absolutely, absolutely. But a lot of the times I think what I have seen is that we, well, I've seen it in myself because I used to think that I needed to make the onboarding or the sales process easy for the client. The easier I made it on the client, and ease I mean like a one page contract or a quick turnaround in getting started.

Katie (22:28.939)

Yeah.

Katie (22:38.969)

Mm-hmm. Mm.

Katie (22:47.482)

Yeah, no.

Michelle (22:50.762)

What that does is that takes the onus and it puts it on us to execute, to meet their expectations. But if we don't set those expectations, then we're never going to meet what we don't know. And they don't know what they don't know because they watch it on TV and things are done over a commercial break. So a lot of it just comes down to us.

Katie (22:56.958)

unfairly.

Katie (23:03.565)

Hmm.

Katie (23:09.945)

Mmm.

Katie (23:18.37)

I wish my dinners got cooked over commercial break. Can we talk about meal planning over commercial break? That's falling flat at my house. Yeah, it's so true. Yeah, it's such a struggle.

Michelle (23:20.298)

I know. Where's my theory when you need them to show up? Yeah. So it's on us. We have to educate our clients enough that they understand. Also, Katie, once you start saying yes to their negotiating, it doesn't end. It's like a child. You have to-

Katie (23:42.269)

Yeah. Right. You fed the monster. Yes. And you give them a cookie. Of course they want another one. Yeah. Well, and it also really sets you apart if they want to if they want to take that model for a test drive, go find a different designer because then right there you know that this is not your ideal client because you're right. You'll be they'll be nicknickle and diming you right down to that last piece of decor you put on the coffee table.

Michelle (23:49.642)

Absolutely! Nip that baby in the bud! The answer's no, kid!

Michelle (24:08.386)

Absolutely.

Katie (24:09.545)

not worth it. Talk about timelines with me as far as like pricing because I feel like that's a huge part of it too is managing client timelines and you alluded to it with like yes the whole project gets done over the commercial break. It's hard I mean that's the hard part is people have an expectation well why would I let you design this piece of furniture if I can just walk down to the furniture store down the street or I saw it at CB2 and it was really cute and I can just go get it today why can't I do that?

Michelle (24:30.318)

Oh yeah.

Michelle (24:35.202)

Well, you can, go ahead, but you're not gonna get my service involved with it. So that sounds really cocky, but for the most part, yeah.

Katie (24:36.985)

There you go. Knockers.

Katie (24:42.293)

No, it's just a clear process. It shows, it doesn't sound cocky. I don't think at all because it says, I have a standard operating procedure that will produce a legit product and that's what you came to me for. And if you wanna deviate from that, I can't guarantee the outcome and that's okay.

Michelle (24:55.726)

Absolutely. And we address that on the very first call. So my first call is 15 to 20 minutes. This is what I teach. We do twice a year, rolling in the dough workshop. It's how to qualify, quote, and close high end clients while you're baking the profit into your project. But one of the things that I teach in my program and what we still do at ML Interiors Group is that first call is internally, we call it a qualifying call.

Katie (25:00.642)

Love it.

Michelle (25:22.506)

Are they qualified to work with us? Externally, we call it a discovery call. So if you're on my website, that's what it says. The qualifying is what is your timeline and what is your budget? So if their timeline is, I want this done by May and we know we're not gonna be able to deliver it until fall, well then we have that conversation on the front end and I explain why. It's not gonna happen. So.

Katie (25:27.274)

I bet.

Katie (25:33.035)

Mm.

Katie (25:38.521)

Mm-hmm.

Katie (25:43.435)

Right?

Katie (25:46.721)

Hmm. Yeah. Yep.

Michelle (25:50.698)

And that's just, again, it goes back to educating the client. And sometimes they say, OK, well, that's great. I understand, but I'm going to keep looking. And it's like, great. Best wishes. And part of it is I'll tell them exactly this, Katie. I understand that. That's what you want. But if I promised you that I could get it done, and if any other designer promises you that they can get it done, I'm going to disappoint you, and I'm going to embarrass myself. So.

Katie (26:07.477)

Mmm.

Katie (26:14.477)

They're lying.

Yeah. Oh, I love that term. I'm gonna disappoint you and embarrass myself. No client's gonna want that.

Michelle (26:22.194)

Yeah, yeah, uh-uh, or I'll tell them I'm gonna piss you off because I'm gonna promise you that I can get it done. So it just kind of depends on the client and the rapport we have. Do I say disappoint or do I say piss you off? But either way, they get the point. And again, they'll hang up and they'll thank me. Same thing with the budget. If they don't have enough money, I tell them that. Because who wants to engage, and I've done this before when I didn't have the data or the understanding and there were no business coaches at the time. I would drag clients along on this terrible journey.

Katie (26:31.202)

Sure.

Katie (26:34.573)

Yeah.

Yeah.

Katie (26:40.511)

Yeah.

Katie (26:47.498)

Yeah.

Michelle (26:50.366)

and I would disappoint them and I would embarrass myself. So it's just, it's not worth it.

Katie (26:51.557)

Mmm...

Katie (26:56.925)

It's so not worth it. And I think there's so many designers when you're starting out, you're just scared and you need that client. And then you need the one after that client, you're building that pipeline and you're afraid to, but like, the biggest thing I hear you saying, I think is so important is don't bastardize your process. Don't give up on your ideal client in the name of making.

your revenue. You cannot do it because you'll end up going down. It will end up costing you far more. It's better to be holding steady at zero than to take on a client that you're going to disappoint that's going to cost you more money. That's going to just sit tight. They're coming. Revisit your marketing.

Michelle (27:26.07)

Right. Mm-hmm. Right. I think there's a lot of that, but Katie, playing the but Katie game. But with that, I will say I also understand that if you need to make your rent, that you just have, sometimes you have to say yes. You just have to do so with boundaries. And with that, like you, it's...

Katie (27:36.097)

Yes, Michelle. We love the bet game.

Katie (27:45.512)

Yep.

Katie (27:49.469)

Yeah. Mm.

Michelle (27:55.378)

I take this back to dating, okay? Funny, like if you're living paycheck to paycheck and you can't afford a nice dinner, you might go out with a guy that you're really not interested in just to have a really nice dinner. Okay?

Katie (28:07.887)

Michelle, are you speaking from personal experience by chance here? This is sounding very familiar.

Michelle (28:11.438)

Yeah, like maybe when I was in my 20s. It's not very familiar because it was like, what is it, three decades ago? Holy cow, I can't believe that. It was a long time ago. But it is similar in that respect. So there have been clients that we've had to take on so that I could make payroll or so that I could cover the overhead in the studio or whatever that looks like. But you have to do so with boundaries.

Katie (28:20.44)

Oh, no, we don't have to quantify that. I did not ask for that. Ha ha ha.

Katie (28:32.813)

Sure.

Katie (28:40.107)

Mmm.

Michelle (28:40.306)

And that is, here's a solid scope of work, here's exactly what I'm gonna do, here's exactly how I'm gonna do it, and these are the boundaries. So you can still have your own power when you step into this area that you don't desire to be in. Now, if there's any way, shape, or form that you can avoid that altogether and just say no to the good, you make room for the great. Because honestly,

Katie (28:47.274)

Hmm... Mm-hmm.

Katie (28:51.967)

Mm-hmm.

Katie (28:55.507)

Mm-hmm, mm-hmm.

Katie (29:02.562)

Sure.

Katie (29:06.005)

Ooh, I love that. I love that. Say no to the good to make room for the great. That's a great nugget.

Michelle (29:08.123)

It's so true. It is so very true. And it's so.

right. And y'all, it's scary and it's counterintuitive. It's counterintuitive. But I also believe that when you have that when you can step into that place of power, and you own your own badassness, like this is this is this is who I am. And this is what I do. Okay.

Katie (29:19.325)

Yeah, scary as all hell, especially if you're just starting. Yeah.

Katie (29:32.807)

Yep.

Katie (29:37.836)

Yes.

Katie (29:41.717)

Be unapologetic. Your people will show up.

Michelle (29:43.206)

unapologetically about it. It just attracts people that are going to respect you in a different way. And those are the individuals that you love working with that will refer people to you, that will bring you back for the next phase in their home or their next home or a second home. It just, that's where the joy lies is working with the individuals who appreciate and respect what you do. Yeah.

Katie (29:49.993)

Agreed.

Katie (30:01.187)

Yeah.

Katie (30:08.613)

Well, yeah, and that's what you should have joy in your business. If you don't, there's a whole something else going on there. But if you're doing what you love and you're doing it with the right people, it is a blast. Well, I think that does add to the joy. They say money doesn't buy happiness, but I found it really does help.

Michelle (30:18.162)

and you're getting paid well for it.

Michelle (30:25.871)

Oh. Yeah, absolutely!

Katie (30:28.221)

I'm sorry, but it actually makes a significant difference. I have found and I think it can buy happiness Yes You should be making money at this and having fun empowering other people and giving them beautiful homes and empowering a great team And when you're doing that, I am so sorry, but life is a blast

Michelle (30:31.97)

Y-yeah!

Michelle (30:43.982)

Absolutely, and it's not all about money, but you're not trading your time for money anymore. And when I was working hourly, and when you're working hourly, you are literally trading your time for money. There's only so many hours in the week you can work, and there's only a certain hourly rate that most of us can quote unquote justify.

Katie (30:47.245)

Right. Yeah, that's a key point.

Katie (30:59.19)

Yep.

Katie (31:04.379)

Yeah.

Michelle (31:05.822)

So, you know, Vincente Wolf and Nate Berkus and like these celebrity people, if they're working on an hourly basis, of course they can say I'm charging a thousand bucks an hour because I'm Nate Berkus and I don't know what he charges or Kelly Wurzler or any of these people. Like I have no idea what their pricing structure is. So for the record, Nate, if you're listening, I'm just giving the disclaimer. Yeah, exactly. But if I were to come to the table and say, yes, I'm charging a thousand dollars an hour, they're gonna laugh at me and turn around and walk away.

Katie (31:15.462)

Sir, sir.

Sure.

Katie (31:25.363)

We love you, Nate, and go get it.

Katie (31:35.405)

Well, especially because then they're going to take and match that up to what they're making hourly and go, are you kidding me? That's the first thing they're going to do is compare their rage to. Yeah.

Michelle (31:39.222)

Yes, exactly. You're fluffing pillows and picking out paint. So yeah, and you can't trade time for money and be profitable.

Katie (31:49.405)

If you do figure out how to create more time, please let me know. I'm there for that creative endeavor and I will come alongside you because that's not we haven't cracked. Talk to me.

Michelle (31:57.995)

Yeah, and then we'll go buy our island in Fiji.

Katie (32:00.373)

Oh my gosh, yes. Or the Maldives, I just want to float. I have this like dream that when the children go to college and I drop the last one off, I'm just going to go lay on my back in the Maldives for about two weeks just floating in the water until I remember my name and who I am. Because for all the mompreneurs out there, I don't know if you could relate, but sometimes you're like, who am I and where am I? Why am I in the pantry for the 95th time today? Because some kids screamed at me and all you're thinking about, back to the like shaving your legs and thinking about your clients,

Michelle (32:15.47)

I think that sounds pretty darn good.

Michelle (32:23.554)

See?

Michelle (32:29.742)

Mm-hmm. Yeah, exactly.

Katie (32:30.207)

thinking about your clients, right? Not the graham crackers and everything else. Talk to me about value-based pricing. This is a huge concept. This might be a new term to some of our audience. What is it? How do you get it to work for you?

Michelle (32:43.27)

It is the flat fee model. It is a value-based flat fee model. Yeah, value-based, and that's how we sell it to our clients is that we, how do you, how do you, how do you price? Well, we price with a value-based model. Also, you could call it a flat fee, and we base it on the number of square feet in the space and the level of complexity involved. For example, a kitchen renovation is much more complex than a guest bedroom.

Katie (32:45.361)

It is, okay. That's what we're calling it.

Katie (32:52.513)

That's the term.

Katie (32:58.785)

Yep.

Katie (33:03.564)

Yep.

Katie (33:07.265)

Mm, yep, break it down.

Katie (33:13.726)

Agreed. Let's start with plumbing and electrical alone.

Michelle (33:14.546)

Okay, so the dollar, right? So the dollar per square foot for a kitchen design is exponentially higher than a dollar per square foot for a guest bedroom decorating. So that's what we mean by a level of complexity. It's going to be based on the outcomes that they want.

Katie (33:31.745)

Yep, yep.

Michelle (33:43.554)

There are some clients that, you know, think about this. There are some clients that are just very simple. I just need this place redecorated. Just take some of what I have, and this is, again, this is back where I started. Take what I have and let's just add to it. Okay, that's fine. That's much easier. But if we're starting from scratch, well, now granted, that's much easier too, but if we're starting from scratch, it's different. So what level of complexity does this particular design have?

Katie (33:43.585)

Mmm.

Katie (33:48.323)

Yep.

Katie (34:06.455)

Yeah.

Yep.

Michelle (34:12.607)

And that's.

Katie (34:12.909)

So we're marrying up the complexity of the project with the complexity of the client to come up with a flat fee. But then let's talk about margin because we need a margin, not in the sense of profitability, but margin in the sense of wiggle room for the unexpected on every project. There is a sticking point and it is the...

Michelle (34:19.156)

Mm-hmm.

Michelle (34:31.054)

Oh, hell yeah. Mm-hmm.

Katie (34:36.401)

It is the area that you're like, why are we here having a sticking point on this item? Right. It's always the one lamp that the, of course, the client fell in love with and has been discontinued and now we have to go find it somewhere. Um, how do you plan for the unplanned? Because it's gonna happen.

Michelle (34:41.03)

Yes!

Michelle (34:48.477)

Mm-hmm.

Michelle (34:54.782)

It is gonna happen and I think what I have found is because everything that could go wrong has gone wrong in my business, I just make sure that my booty is covered contractually with a lot of it. So let's say there is something that is back ordered or it's discontinued or whatever the case may be. We educate the client on the front end. So.

Katie (35:02.913)

Yes.

Michelle (35:22.494)

when it comes time to sign the contract, I walk them through all of the details, like this is what happens if you shot me, this is what happens if something's back ordered, this is what happens if the price goes up, this is what happens if the price goes down, all of the contingencies. Now, we don't see everything at any rate, and things do happen. The fee covers what we can control. And what I mean by that is,

Katie (35:25.902)

Hmm?

Katie (35:36.35)

WHAAAAAAAT?

Katie (35:49.945)

Hmm.

Michelle (35:52.134)

Once the design is done, then maybe procurement is a separate process. The construction implementation is a separate process. And instead of building that into the flat fee, because again, you don't know what you do. What's going to happen when you open this wall? Are you going to have to redo some of the design? Or are you going to have to?

Katie (35:54.87)

right?

Katie (35:58.41)

Yep.

Uh...

Katie (36:15.741)

Yeah, 100% or is the GC a complete pain in the ass and is like coming to the job site maybe once every month and the superintendent, yes, have we all not had that happen? And you're like, really? Are we even sure we're using the right materials here? Yes.

Michelle (36:20.65)

Right.

trunk.

Michelle (36:26.594)

Yeah.

Michelle (36:29.762)

Yeah, exactly. So those things are charged differently, but the actual design fee is all the time it takes for us to get the job done. The yes, and it is let me bring this to you. Now we build in revisions per room, like how many do you have per room, and then what's the consequence after that? So there has to be a pain point associated with the

Katie (36:41.097)

Yeah. The items you can control.

Katie (36:48.693)

You have to.

Michelle (36:57.622)

What else is there? What else is there? What else is there? What else is there? Client. Okay. You get two what else is there for that one particular room. And then after that every next what else is there? Because I've looked at everything. Like I've looked at everything. Right.

Katie (37:01.729)

Hmm.

Katie (37:11.989)

I know when you're hiring me to look at everything, I'm looking at everything all the time. I'm laying in bed at night flipping through the latest magazines coming to the house. I'm looking like I'm living in this world. You have to trust. Well, and I think that's a key point. They start thinking that we're their Pinterest board. So if I can scroll through and pin a hundred things in Pinterest, I'm expecting you to propagate a hundred things for me like my Pinterest board does. No, I'm not Pinterest. I've pre-sorted for you.

Michelle (37:19.946)

Right. Instagram. And yes.

Michelle (37:37.458)

Amen. And, there you go. Oh, when you're in Texas, I'll have to take you to Kate Weir. Amazing chocolates, yes. So, yes, squirrel. But with that, it's also, this is what we put in the front end, is that it's a combination of how much, like your overall budget, how you live. So yeah, I could find you.

Katie (37:37.801)

And we're down to the good stuff here, sister. This is the Godiva. I have found you the Godiva. I'm not bringing you Hershey's, no offense Hershey's, and you have to accept that.

Katie (37:51.232)

I'm there. I'm here for all things chocolate.

Katie (37:59.412)

Yeah.

Michelle (38:07.11)

a beautiful such and such, but it's not gonna fit in your budget. Your kids are gonna break it within the first three days, and if not, it's gonna be your big dog with the tail wagging. So there's a lot of reason. Yes, and so it's the budget, it's the scale, it's pulling, you get the entire room together. If you wanna build it around something, that's different. But in that, it's just the education of the client, because again, I don't believe they're assholes. They just...

Katie (38:16.597)

and you'll cry.

Katie (38:26.058)

Yeah.

Agreed.

Katie (38:33.865)

Yeah. No, they don't know. Yeah.

Michelle (38:36.63)

don't know what they don't know.

Katie (38:39.445)

And one thing that we when we did residential to, I would just start with one room until we really figured out. And sometimes we'll still do residential art procurement when the budget's right. And we always just start them in one room to say, yep, we're going to give you two rounds of revisions in this one room as we really dial this in and before we pull it out to the rest of the house. And that has been such a great thing because sometimes they don't even know their own style or they'll use a term they'll be like, oh, yeah, I'm Boho Sheik and you show them Boho Sheik.

Michelle (38:49.675)

Mm-hmm.

Katie (39:09.339)

like, no. And you're like, okay, so what you think is bohojig is not actually what's happening over here. You want to call it that, but we have to talk.

Michelle (39:14.766)

Absolutely. And what, yeah, and it's so true. So I keep telling you, like all the mistakes I've made, we used to go ahead and we used to be like HGTV where we would meet the client and then we would disappear for a month or two, actually maybe just a month, and we would just be able to poop this out real quickly and come back to them and we hadn't nailed it. So now we take a lot longer to create a design.

Katie (39:26.601)

I love it. Yeah.

Katie (39:39.168)

Yep.

Yep.

Michelle (39:43.422)

And there's so many more conversations with the client and sharing with them different, like here's kind of the vision, like what are open wood shelves? Like back in the day, nobody knew what that was. So then you're bringing an image to them and you're saying, this is the inspiration. What do you think about this? Oh, okay, now I know what you're talking about because I was thinking raw wood on my wall or something like that, two by fours. And then, you know.

Katie (39:46.502)

Mm-hmm.

Katie (39:53.499)

Mmm...

Katie (40:02.145)

Yep.

Katie (40:07.627)

Right?

Michelle (40:10.466)

bringing a variety of different fabrics. How does this feel? What do you think about this? So we have a lot more in the interview process. And we're, in fact, at my firm, just this past Wednesday or Thursday, we're even elevating that to more of an experience, bringing them into the studio and making it a very intentional, standardized process across the board.

Katie (40:14.375)

Mmm.

Katie (40:17.889)

Hmm.

Katie (40:28.501)

Yep.

Katie (40:36.249)

I love that. I hate to use the term cattle shoot, but it's the one that comes to mind from my growing up in Montana years. But I think sometimes they will wander as far and as wide as you will let them. And if you can put them in your processes, if you can put them in the shoot, bring them into the studio, give them the imagery, walk them down the path. When they get to the destination, it may feel like we're limiting them, but in reality, they're going to be happier with the end result. Time and time again, all the science shows.

Michelle (40:46.67)

Absolutely.

Michelle (40:53.164)

Mm-hmm.

Right.

Michelle (41:02.034)

Yeah, it's like a kid going into a candy store. You can't have it all because you're gonna throw up. Yeah.

Katie (41:05.977)

Yes, the fewer the options, the happier people are. Right, and then they just sit there and they cry because they're overwhelmed, right? Instead of saying you can choose the crumbled apple or you can pick the Snickers bar. Which are you gonna get today? Okay, well I'm excited, I'm getting something. Like this is great, like this is fabulous. Yeah, big difference.

Michelle (41:12.902)

Mm-hmm.

Michelle (41:17.31)

Right. Mm-hmm.

Absolutely. Yeah, you can't have it all and it just it yeah, and it'll look like somebody threw up And you're yeah

Katie (41:28.265)

So true. But that gets back to making sure you have these processes in place. And I love what you said about the conversations. I think that's another really key nugget because as you mentioned, the best marketing in the world is when they hear about you or someone hears about you from a previous client, right? And they're picking up the phone to call you or they buy that second house or they whatever when you use this not just is I got the job and I'm going to complete it for you. But as a let's build this relationship.

Let's have the conversations. One, you're gonna know I care about your end result. I really do care. Even though we have these processes and that may feel like a sterile term to you, it's because I care that we actually reach something achievable for you.

Michelle (42:00.364)

Yeah.

Michelle (42:08.098)

Well, that and going back to the fact that professionals are hiring us, we're speaking their language. We are speaking their language. So if we show up as a professional and we're dealing with professionals, it's a business transaction that is very enjoyable and there does become a component of friendship or compassion. And I think that that's also where you and I might be exactly the same price point, same exact processes.

Katie (42:12.021)

Yeah, absolutely, absolutely.

Katie (42:22.117)

Agreed.

Michelle (42:36.29)

but who are they going to get along with differently? So being your own authentic self is what seals the deal.

Katie (42:38.829)

Oh, yeah. Yeah. It totally does. Well, and it's a two part from the competition. Because I think for the designers that are always about closing the deal, closing the deal, closing the deal, moving on, closing the deal, clients feel that. We are human beings. We're emotive. And usually professionals have a high emotional intelligence. They're going to read that as well.

Michelle (43:01.574)

And this is, I mean, in the residential sector, y'all, we know a lot about your stuff. Like, we know what needs to go in those nightstands and where, so we are designing around it. Like, there is a very personal factor that comes to this. We get the key to their house sometimes, and we're in and out when we need to be.

Katie (43:12.843)

Right?

Katie (43:16.225)

Barry, yeah, yes, yes. I will, we might have to edit this out later, but I will never forget the client that took me, the residential client that took me into her bedroom and she didn't have a headboard. And there was a hole in the wall the size of her head where I'm like, I have a pretty good feeling I know why that happened, but I'm not gonna talk about it right now. We're just gonna talk about patching that drywall and getting you a headboard.

Michelle (43:34.37)

Hehe

Michelle (43:41.518)

EEEE

Michelle (43:44.942)

I'm probably upholstered.

Katie (43:46.277)

Yeah, upholster would be ideal. I have a very strong feeling but I was like, I mean like I blush now But I totally blush and I was like, oh gosh, I'm just gonna pretend I'm not seeing what's going on that wall for a hot minute Whoo, yeah

Michelle (43:58.615)

Yes, so they have to be comfortable enough to let you in the bedroom. Yep. Yeah, exactly. That's funny. Yeah.

Katie (44:04.149)

Let's in the bedroom and explain. We'll just patch that drywall. We won't talk about why that happened. Just saying, you know? Oh, oh, it's so good. Michelle, this is a great conversation. One final thought that you wish that you could share with designers who are afraid to change their pricing model and are afraid to, are just scared if we're saying, but Michelle, I am so scared to do this. And I don't have the luxury in my firm. Like we are living paycheck to paycheck in my firm.

Michelle (44:27.014)

Yeah.

Katie (44:33.801)

I don't have the luxury of making mistakes with my pricing. What do I do?

Michelle (44:37.698)

I'll tell you, I'm gonna answer that with a story. Okay, so when we first went from hourly to a flat fee, I remember sitting across from a repeat client, I had explained to him, hey, I've changed things up, it's gonna be a flat fee, I'm tired of doing the invoicing and so forth, and he was like, that sounds like a great idea, I'm here for that, et cetera.

Katie (44:43.065)

Mm. Please do.

Katie (44:56.018)

Mm-hmm.

Katie (45:04.737)

Hmm.

Michelle (45:06.674)

So Debbie and I, she's been with me at the design firm for 10 plus years. And so we were going through this. We typed this whole thing up. We came up with the presentation. We sat down across from Alan and his then fiance. And I walked him through everything. So we're gonna do this, we're gonna do this, we're gonna do this, we're gonna do this. And here's the total. Okay, Katie, the total was $10,000 for the design fee. Okay, I was sitting there nearly peeing down my leg because I was...

Katie (45:33.122)

Okay.

Michelle (45:36.382)

scared to death to slide a $10,000 design fee across the table. Okay, so my word to the designers is that be scared and do it anyway. Okay, yeah, Alan signed it. Alan signed it and here's the deal. Looking back, the job was easily a $60,000 design fee.

Katie (45:37.209)

Terrified. Yeah.

Katie (45:43.457)

Hmmmm...

Katie (45:48.557)

Hmm. Oh, that's life girls. Get after it. Yes. Be scared and do it anyway. Great.

Michelle (46:05.106)

my ignorance, but we still got the job. I was able to cover the bills, to do all the things that we weren't as sophisticated, my overhead was different. But now what I'm saying is that you learn, you are gonna make mistakes sometimes, but you know what, that was still a profitable mistake. Okay, did I leave $50,000 on the table? Yeah, but you know what, I wasn't sophisticated enough to deliver an experience that goes with that total.

Katie (46:05.807)

Bye.

Katie (46:24.105)

Yeah.

Katie (46:32.821)

$60,000, yeah.

Michelle (46:34.438)

Right, so $10,000 was still baby designer me. I wasn't shopping at HomeGoods anymore, but I didn't have the processes to implement the design as smoothly as I do now. We sell an experience in addition to the result. So it's like going to the Mercedes dealership versus the Honda dealership. And nothing knocking the Honda, but Mercedes doesn't smell like tires. They've got better coffee.

Katie (46:41.049)

Hehehehe

Katie (46:50.663)

Oh, that's so good.

Katie (46:55.903)

Yes, every time. Nope.

Michelle (47:01.994)

You can get, you know, you get better music in the background. Yes.

Katie (47:03.245)

They have apps, they have snacks, they even give like, we were at, was it at the Toyota dealership when my daughter was born, it was the Toyota Lexus? They have it as shop and smartest marketing ever, they gave her a voucher. They handed over to my child, foe money to go spend in the gift shop that had great things. I was like, brilliant. Yeah, totally different experience than going down to the used car lot.

Michelle (47:23.562)

Oh, that's cool. Yeah.

Mm-hmm. Right. So first of all, a shameless plug is get yourself a business coach, okay? In the Interior Design Business Bakery, which is my one-year program, this is what we teach. I actually hand you my pricing schedule and we work through it based on your experience and then you can elevate it. Okay, so if you don't want to get a coach, then what you need to do is go get your data, okay?

Katie (47:34.933)

Do it. Absolutely.

Katie (47:40.801)

Yep.

Katie (47:55.388)

Yeah.

Michelle (47:56.914)

run the numbers and figure out what you need to charge by the square foot and then probably close to double it because we never value our services as well as they as at what they're worth because we interchange ourselves with our services. So just start practicing. Keep your data. Figure out how many hours and speaking of hours, you've got an internal hourly rate. So

Katie (47:58.466)

Yep.

Katie (48:03.115)

Yep.

Katie (48:11.799)

Agreed.

Katie (48:16.973)

Hmm. That's wise. Yeah.

Michelle (48:26.262)

Katie, our internal hourly rate at ML Interiors Group, I think it varies anywhere between 300 and $400 an hour. I could not sell that to a client if I were, well, maybe if I was, you know, Kelly Wurzler or something, of course, I could triple, quadruple, whatever that. But my point is, is that you cross-reference that and you build that margin in for the things that do go wrong. So it's not just my $75 an hour,

Katie (48:34.613)

Yep, yep.

Right, no. Mm-hmm.

Katie (48:46.39)

Right.

Katie (48:51.549)

Yeah.

Katie (48:56.354)

Right.

Michelle (48:56.414)

Okay, it's all the other stuff you can build that in to your flat fee. And if they ask, what's your hourly rate? I don't have one. Like, that's my internal, yes, that is my internal hourly rate. And that's on average because we have different people that we're paying and things like that. So there's a lot of work that goes into it, but y'all, if you're still working hourly, just start thinking about making that switch.

Katie (49:05.609)

No, I'm here to get the job done correctly. Yeah.

Katie (49:11.853)

Yeah.

Katie (49:16.749)

Sure.

Katie (49:22.476)

Yeah.

Yup.

Michelle (49:26.022)

and run the numbers on your most recent project, the one before that and the one before that, and take your hourly rate, double it, and figure out how many hours that was, and you could start with that.

Katie (49:33.593)

Hmm.

Katie (49:38.677)

Yep, it's a good starting point. That's a great, great algorithm to just put everybody through out of the gate if you're unsure of where to start. I think it's so critical. Don't devalue yourself, especially as a woman. Do not do it. You are worth so much and you have so much creativity in you and you are giving your clients the gift of your time, which you don't get back, your emotional energy, which drives that creativity. And don't undercut that. And don't undercut the industry either. But you're not, and I think it's easier almost,

Michelle (49:45.838)

Mm-hmm. Oh.

Katie (50:08.213)

for women when we frame it this way. It's not that you're just undercutting yourself, but you're actually taking your other sisters and designers out here and undercutting them. Because if this client doesn't choose you, they're gonna go try to negotiate with somebody else. And we just don't want that to be an option.

Michelle (50:24.278)

Right. It's so true. And I think part of it is we take for granted our skills, our talents, our blessings, and we change people's lives. We don't just make a home pretty. We create a sanctuary where they begin and end their day as their best person so they can go out into their world and be their best person. We create a space that feels like a hug. How can you undervalue a hug?

Katie (50:32.033)

Mmm.

Katie (50:39.578)

Yeah.

Katie (50:43.988)

Yeah.

Katie (50:48.189)

Yeah, yeah. Yeah. Nope, can't do it. It's so true. I mean, one minute hug is shown to release an immense amount of oxytocin. Walking into your home should do the same. It should be the spot. Yeah, it should hit the spot. Great conversation. Thank you, Michelle, for your time. Love and adore as always.

Michelle (50:54.038)

We all need one.

Michelle (51:04.458)

Yes, agreed.

Michelle (51:08.638)

Oh my gosh, right back at you. I appreciate you having me.

Katie (51:12.393)

My pleasure.