Interior designer CFO services: price the work, protect the markup, fill the studio

Choose a pricing model the numbers can defend

Most studios inherit their pricing model from wherever the founder trained and never revisit it. The CFO question is not which model is fashionable — it is what each model earns per senior design hour once a project closes, because senior hours are the one input a studio cannot buy more of on short notice.

Whatever the client sees, we compute one inside number on every closed project: fees plus procurement margin, divided by the design hours the project consumed. That realized rate is the feedback loop. It sets your minimum engagement size, tells you which project types to chase, and shows whether the flat fee that felt generous at proposal time survived the fourth round of revisions.

Procurement margin is a profit centre, not a favour

Buying at trade and selling at a markup can out-earn the design fee itself — but only if the margin is measured against true landed cost. Freight, crating, receiving-warehouse charges, duty, and the inevitable damaged-in-transit replacement all come out of the spread, so a studio that measures markup against trade price alone is congratulating itself on margin it never earned.

At the CFO level we watch three numbers. Procurement margin by project after every landed cost, so a problem vendor or an underpriced markup surfaces while it can still be fixed. The deposit float — client money held against goods not yet delivered — because it flatters the bank balance and can hide an unprofitable fee structure for a year or more. And vendor exposure: the deposits you have out with workrooms and suppliers, which is your cash at risk if one of them slips. USD purchase orders add exchange-rate movement between the day the client's deposit arrives and the day you pay the vendor; the tax layer on US projects lives in our cross-border tax guide for interior designers, and the day-to-day deposit mechanics are handled by our designer bookkeeping team.

Studio capacity: the constraint is senior hours, not desks

A studio's revenue ceiling is set by how many projects its senior designers can genuinely lead at once, and most principals find that ceiling by hitting it. We keep a running capacity model — senior hours available each month against the hours the sold project load will demand, plus a probability-weighted pipeline — and three decisions come straight off it:

• When to hire — an intermediate or junior designer is justified when senior hours are consistently going to work a junior could carry, not when the studio merely feels busy;
• When to decline — projects below your realized-rate floor get referred out, with numbers behind the decision instead of guilt;
• When to raise fees — a booked-out calendar at current pricing is the signal, and the model shows how much demand you can afford to lose at the new rate.

Capacity is also where the full-service versus consult-only question gets settled. Consult-only work looks efficient per hour but rarely carries procurement margin; full-service ties up senior attention for months but earns on both streams. The right mix for your studio is a number, not a philosophy.

Cash flow runs on deposits — plan as if they are not yours

Deposit-funded cash flow feels comfortable right up until a project pauses, a client cancels an order, or a vendor fails while holding your money. We run a rolling cash view that separates earned cash from held deposits, so owner draws and studio spending come out of money the studio has actually earned. The same view schedules HST remittances on the procurement side and the corporate tax instalments that ambush studios in their first strong year.

Engagements are fixed-fee and scoped after a discovery call: monthly margin and capacity reporting, quarterly pricing reviews, and a call whenever a decision needs numbers behind it. How the engagement runs month to month is on our advisory and CFO services page.