Interior Design Business Overview

Interior designers transform spaces by combining artistic creativity with practical functionality. These professionals work with residential and commercial clients to develop interior spaces that reflect the client’s style while meeting building codes and safety requirements.

The work involves selecting color schemes, choosing furniture and fixtures, planning layouts, and coordinating with contractors and suppliers. Interior designers need strong visualization abilities, knowledge of design principles, understanding of materials and finishes, and familiarity with computer-aided design software.

Related: Checklist To Start A Business

How Do Interior Designers Make Money?

The primary way interior designers generate income is through direct design work billed at hourly rates or fixed project fees. This work involves meeting with clients, developing design concepts, creating space plans, selecting materials and furnishings, and overseeing implementation. Design fees vary based on location, experience level, and project complexity, with established designers commanding higher rates.

The most common ways interior designers earn revenue can include:

• Design Fees: Charges hourly rates or flat fees for design services. This represents the largest revenue source because it covers the core creative and planning work that every project requires, typically ranging from $50 to $200 per hour.
• Project Management: Coordinating contractors, ordering materials, and overseeing installation work. Design firms often charge 20-30% of the total project cost for these services.
• Product Sales: Purchasing furniture, fixtures, and materials at wholesale prices and reselling them to clients at retail prices.
• Consultation Services: Providing expert advice on color schemes, furniture placement, and room layouts on an hourly basis.
• Drawing and Documentation: Creating detailed floor plans, elevations, and technical drawings needed for construction and installation.
• Purchasing Services: Managing product procurement and coordinating delivery schedules for clients.

Industry Statistics

Interior design services fall under NAICS code 541410. This industry focuses on planning, designing, and administering projects in interior spaces to meet client specifications.

Here are some statistics of the industry:

Interior Design Industry Size & Growth: The interior design industry generated $25.9 billion in revenue last year. The industry has shown steady growth, with an average annual increase of 2.9% over the past five years. Growth projections suggest continued expansion as residential and commercial clients invest in design services. However, high interest rates may slow construction activity, which could impact future growth rates. (IBISWorld)

Number of Interior Designers: Approximately 160,000 interior design businesses operate across the country. The industry remains largely fragmented, with no single company controlling more than 5% of the market. The three largest firms – Gensler, Interior Architects Inc., and HOK Group Inc. – together account for less than 25% of total industry revenue. (IBISWorld)

Interior Design Profit Margin: Interior design businesses typically achieve net profit margins from 20-30%. (Foyr)

Costs To Start an Interior Design Business

Starting an interior design business could cost between $2,500 to $50,000, depending on the business model and location chosen. A home-based design consultation practice represents the lower end of this range, while a full-service design firm with a commercial location falls at the higher end.

Here are some of the main costs to consider when starting an interior design business:

Commercial Space: A design studio or showroom usually requires the first and last month’s rent plus a security deposit. Renovations to create an appealing workspace with proper lighting and display areas may also be needed. Initial costs for a commercial location can range from $15,000 to $25,000.

Design Software and Equipment: Professional interior design software, computer equipment, and digital tools for creating floor plans and 3D visualizations can range from $1,500 to $10,000. This includes computers, tablets, printers, and industry-standard software licenses.

Portfolio Development: Creating sample designs and staging areas to showcase your work can cost $500 to $7,000. This includes purchasing furniture pieces, accessories, and photography services to document your designs.

Professional Certifications: Industry certifications and continuing education programs range from $500 to $5,000. These credentials help establish credibility and may be required in some locations.

These estimates are rough figures and will vary based on location, business size, and market conditions.