[00:00:09] Speaker A: Hi. Today we're learning from Hema Persad, founder of Sagrada Studio, as she shares her approach to billing as an interior designer. Recently awarded the prestigious New American Voice Award by Arc Digest, Hema is perfectly poised to discuss money in the industry. Hema explains the onboarding and design discovery phase at Sagrada Studio as well as the building structure. At each phase of her process, she leaves no detail missed, even breaking down proprietary details like procurement fees, software, and markup percentages. Hama also explains how she bills her site visits, meetings and hourly rates for installation. As a former attorney and celebrity stylist, she talks about the benefit of her team structure and her approach to managing a remote team. Most significantly, we chat about the significance of tracking hours and project profitability. Find this episode's bonus materials, including fee structure breakdown, now on Patreon. Access them
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Hello and welcome to the interior collective Hema, I am so glad to have you, especially on my very favorite topic in the whole world and something that not everybody is willing to discuss. So we are all very grateful for you to be here today.
[00:02:28] Speaker B: Thank you. It is also a topic I love talking about. It makes lots of people uncomfortable, but you know, money makes the world go around. What can I say?
[00:02:39] Speaker A: You know, at the end of the day, we are all doing what we're doing because we love it. But let's be honest, we wouldn't be doing it at the rate and extend that we are if we weren't getting paid for it. So everybody works to make money. So before we dig into all of that juicy finance talk and budgeting and pricing and all of those things, let's go ahead and get a background overview of Sagrada Studio and what sets your design approach apart from the interior design industry, of course.
[00:03:14] Speaker B: So Sagrada Studio is my two year old design firm. I used to be an attorney, financial services. Actually, for ten years, I represented banks and lenders, so I know lots and real estate investment companies, things like that. So my career started as a, you know, money, money lawyer, basically. I didn't like being a lawyer, so I decided I would go work in fashion. So I moved to LA and I ended up as a celebrity stylist intentionally. And I did that. I worked with a lot of incredible people, found myself at the 2019 Golden Globes. Like, I really did it. But fashion as an industry is super toxic. That's a whole other podcast episode.
So it just really, you know, pretty, I would say, like three years in, I was like, oh, this is not it either. But I didn't know what else to do. And I made that big leap, you know, to change careers. So I wasn't going to throw in the towel just yet. Then the pandemic hit. I had a baby in January 2020, and then we were all locked down for basically the rest of the year, so there wasn't anything to do.
Then when things started opening up in 2021, one of my styling clients got a new apartment, and she was like, you have good taste. Why don't you help me decorate it? And at first, I kind of was like, oh, I like my own decor, but I don't know if I could do it for someone else.
[00:04:31] Speaker A: But I was like, you know what?
[00:04:32] Speaker B: Who cares?
[00:04:32] Speaker A: Whatever.
[00:04:33] Speaker B: I'm going to just say yes. Try it. And that got the ball rolling. You know, she's an influencer. Pictures went everywhere. All of a sudden, people kept asking me to help them with their spaces, and I just kept saying yes, thinking, okay, this is a fun project. That's the last one. Never doing that again. Great. But it was never the last project. So by the end of 2021, I kind of had to make a choice because I was styling and doing interiors at the same time. And financially, I could see a lot of potential with interior design. And I liked it. I didn't. You know, I think the thing with fashion is, like, it was something I loved so much, I was willing to, like, do it for very little money. And I think that's the problem sometimes with turning your passion into a career is like, you can't separate yourself from it now with interiors, I like it enough. But am I going to feel like, oh, I love this, should I do it for discount or whatever? No, I'm not, because it's a business first and foremost to me.
So that's my story. And then two years later, here we are. I incorporated, I standardized our contracts. I've gone through several different fee arrangements. My business in the past two years, really, the way we charge has evolved. But our design approach is very, our aesthetic. I would call it global, rich, livable, eclectic, layered. Those are the words I would use. Then our approach is very methodical. I do have a process, I've made the mistake before of letting clients hijack that process and at ever goes well for them or us. So I spent a lot of time kind of developing how I guide clients from the start to finish of a project.
I'm pretty logical about it.
[00:06:20] Speaker A: We're going to dig into all of that process in a minute. I'm curious. You just described your interior design style as global, eclectic, elevated. Do you feel like that resonated with your fashion styling style as well?
[00:06:37] Speaker B: No, with fashion, it was so, it was so political. Like when you're addressing celebrities for a red carpet, it's not just like, oh, pick out this cute thing and like, call it a date. There is a publicist involved. There is an image. There is a human being who has to put clothes on their body. There are brands you have to consider in order to build a celebrity's image.
So, no, I mean, when I could, I liked to sort of like, if my clients had a certain background or whatever, and we wanted to use like, asian designers or indian designers. Like, sometimes there was that opportunity, but by and large, no, I think that fashion styling is, there's not as much opportunity to do that.
[00:07:20] Speaker A: Interesting that you feel like you're a little bit more creative or get to be more creative on the interior side of things. So coming from a law background and then, of course, fashion background, what do you feel like you learned from each of those that you've been able to bring to your current, like billing structures and fee structures and your client service agreements in interior design, everything.
[00:07:46] Speaker B: Both of those industries, styling and law, are client service industries, just like interior design. Interior design and styling, while they may be like, the output is artistic or creative, like, you're a service person at the end of the day. Same with being a lawyer. So from being an attorney, I learned hourly billing, I learned timekeeping, I learned contracts. Obviously, I was a litigator, so I was in court all the time. And when you're a litigator, you're kind of seeing what happens when things blow up versus being on the transactional side where you're kind of crafting the deal. So I kind of have this, I approach a lot of situations with this mentality of, like, well, what can go wrong here and how can we prevent it?
I learned how to advocate for myself. I learned how to distill complex ideas down to, into a way that my clients could understand. So all of that framework is from being a lawyer, then from being styling, being a stylist. I learned how to make mood boards, how to come up with a creative concept, and then make sure it worked in context, because that's the thing. Your clients come to you with pinterest pictures and reference images, and you have to figure out how to make that in that space, with that lighting, translate to your client's home and space and budget. So that's something that I actually learned from styling because I would get the same clients would come to me with a picture of, like, some other person with a different body, you know, a different everything, and tell me they like this. And I would have to figure out, well, what does that mean for this person? And also, if you're doing, like, a press tour or something, it's like, okay, how are we gonna sort of prepare the trajectory of this person's looks for however many weeks? And so creative concepts and communicating them, that is what I got from styling and also Pr. I had no clue about PR until I started working in fashion. And so immediately when I got into interiors and got those first few pictures back, I was like, I can't do this. People need to see this work. Like, I need a PR person. And I knew that immediately from, from working in fashion, I have to admit.
[00:10:05] Speaker A: Because we haven't had the opportunity to hang out in person. Prior to this conversation, I listened to other podcasts you've been on, fell in love with you. I was like, oh, my God, you're just so brilliant. And so I'm going to link all of them in the show notes so you can go ahead and share and listen to everywhere. But I have to say that your approach to pr, you and your publicist approach, for the fact that your business is a younger business once you've made it into this industry. I am just so impressed with how you've been able to get your name out there and how you have such a distinct point of view and can articulate that point of view and how you create those spaces in such a way. So I'm super, again, grateful to have you talking with us as well, but I know that there is a question that everybody listening is probably dying to hear. As a former attorney turned interior designer, do you have three tips that you feel every designer should have in their service agreement or contract?
[00:11:03] Speaker B: Yes. Number one is fee. Fee structure. Very, very specific. Like, you need to be clear about everything. And when I say everything, you don't just say like, well, we bill hourly and this is the percentage for procurement, and blah, blah, blah. You need to say things like, procurement is not refundable. You know, you need to say things like, you know, procurement may cover returns for defects, but not if the client changes their mind. That's hourly. You know, those kinds of things that you like.
Those areas can get real sticky real fast and at the end of the day, you just end up losing money if you don't specify exactly what is covered by each portion of your fee. Structure. Structure and what isn't. So that's like tip number one. Number two, you definitely have to have an expectation. Let me think. Our contract's like two pages. Three, I think you definitely need to have some clarity on what you can and cannot photograph, especially for us. We do some commercial projects and, you know, we do work with some celebrities and that conversation needs to happen upfront and then be memorialized in your agreement. So don't just take it for granted that you're going to get pictures out of your project because you're not always. And same with your photographers. You need to get clear on the usage. That's a separate, that's a separate agreement. But that's a whole other thing, right? So definitely be clear on your fee structure. Be clear on your publicity agreement with the client in terms of, like, what you can and cannot photograph. And then you should be clear. I actually only recently learned this, but, like, you need to have a section on, like, what happens if the project stalls and you need to restart later on.
I think that that is a lesson I only recently learned because before it was like, you start and then like, whatever, it's how many months or years and then you're done. But sometimes that is not the case and nobody has an expectation set up for what happens. Like, the reality is you can't take a design fee and get working and then something happens and you have to pause and then restart eight months later with no sort of like restart fee or restart policy or what does that mean when that situation happens, you know? So I definitely think that's an important thing to consider.
[00:13:26] Speaker A: As a small business owner, it's more important than ever to ensure you're legally protected. IdCo Studio teamed up with our attorney Elise to offer you professionally drafted contracts specifically for interior designers. You can head on over to www dot idcode dot studio to purchase, download, fill in the blanks and consider yourself covered.
I'm curious about particularly the fee structure and also honestly, like, the, what happens if this project stalls? Where do we go from here? How does it get handled as someone as personable as you are? Like, you want your clients to feel good. You want them to trust you. You want them to feel like this is a really exciting thing. Like, yes, this is romantic, we're gonna redo our home. But, like, how do you kind of walk that line of, this is a business? These are, this is my process, and we are going to follow this without exception while also still feeling like you're really accommodating the client and that their project is really unique and special.
[00:14:28] Speaker B: Yeah, you have to be super gentle, especially if you've never worked with the client before. I just sent an email two days ago that was just like, because the client was sort, she's, she's lovely, but she's kind of indecisive. And she has been through the design process before with another designer, and that designer's process was different from mine. And so she likes to jump ahead and, you know, it's just a question of just being like, hey, reminder, we're going to get to that. You know, at this stage, let's focus on this. And you gotta be so patient. People are people, and it's not personal to you. It's just them in their heads about whatever's going on in their life, with their house, with their money, with their finances. And so I think having a high level of patience and sort of, like, put yourself in their shoes rather than taking it personally is sort of what I tell myself and my team. It's like, guide them back to our process. And what I do, too, is send a timeline upfront that doesn't go in the contract. But, you know, you'd be surprised how many designers don't do this. Like, they don't, they don't set up the client's expectation from, like, day one with, like, here's our goals. Now, it's not a rigid timeline in the sense that, like, something may take longer for you to decide or whatever. But, you know, I always say, here's the expectation from our standpoint. Here's how we work. Here's what's reasonable based on what we do.
Here are the dates where I expect sort of, like, feedback on our mood boards. Here's what I'm going to send you and when. And you kind of lay it all out for them, and you use that timeline and you use your contract to back you up. That's kind of how I look at it.
[00:16:12] Speaker A: Definitely talking about celebrity clients. You and so many of our guests do have some a list clients. And some people are super private and they, like, don't want anything shown. And some people are like, yeah, let's definitely, like, make this a story. Like, I'd love to support you. When. When you do have that client, that's like, we are very private. We would prefer for this to not be shared. Do you have any clauses in your contracts that say anything along the lines of, if you opt out of photography, there's x fee, or that there's some sort of compensation for those projects that you aren't ever allowed to put out into the world?
[00:16:53] Speaker B: No, I don't. I would never do that. I think that at the end of the day, you're. If you. I don't know, it sounds like maybe you're losing sight of the fact that at the end of the day, this is a service business. And, like, you're providing a service, a design service, of course. And yes, you want, the ideal situation is, like every project, you want it to be beautiful and perfect and photographable and build your portfolio, but that's not always going to be the case. And if a client, if you like the client, if you're making money off the. Off the work and you can't photograph it, I don't think that the client should be penalized for that. This is their home and it's their prerogative, you know, if they want to. Want you to share that. I don't think there should be a baby for like, an additional fee.
I don't feel that that would be justified.
[00:17:45] Speaker A: Yeah, absolutely. I know when we talk to Jeremiah Brent, he also has an NDA signed portfolio that after someone has signed an NDA, that he can then disclose additional work. So that's another option as well. When we were seeking out someone to talk to us about today's topic, and you were top of mind because you're so open with having financial discussions, why is that important to you that we talk about that in this industry?
[00:18:11] Speaker B: My experience, my in, you know, the two, two plus years that I've sort of been a designer is that nobody wants to talk about it, and people get really uncomfortable. And I'm like, but why we could. I think it helps each other. Like, I was at Deco off recently with some friends, and we sat at lunch and had a very open conversation about, like, well, how much do you pay your employees? And, you know, out of a place of curiosity, like, and a gut check, almost, like, well, what's your hourly rate? And what's your hourly rate? And, like, you want to make sure that you're getting value, but also, like, are you, are you overcharging? Like, are you, are you compensating your employees properly? You know, it's sort of like, it's important conversations to have as we set industry standards for each other that are realistic and fair.
[00:19:00] Speaker A: I appreciate that so much. And it's a big part of what we do at design camp is talk about numbers and what you charge and what you pay. To really get started on pricing breakdown and billing structures, I'd love if you could walk us through the initial stages of a project at Zograda studio. Like, what does onboarding look like? What does that design discovery phase look like, and how is that being built?
[00:19:26] Speaker B: I have a three phase. After much trial and error, I have a three phase billing structure. And I know that a lot of other designers are doing this and starting to do this, and it became very clear to me. So at first I did flat rate. I think most designers start out that way. Then you realize really quickly, like, you basically lose money on flat rate jobs every time. But I was new, and I didn't, you know, I didn't know. So then I switched to all hourly. And the problem with all hourly is, a, the clients don't like surprises. B, it's very time consuming. And again, you're going to lose money because, like, nobody's. Even the best attorneys in the world are not, like, perfect hourly billers, let alone when you're a designer and you have to, like, be creative and manage your business and be the CEO and be all the things. Like, hourly billing is terrible, but it is necessary in some situations. Um, so then I came up with this sort of, like, three phase, three prong, whatever structure. So phase one is the design phase that is flat rate. I know generally, now that I have several projects under my belt, how long that's going to take me and my team, I know our overhead on that. I know how much the renders will cost. I know how much, how much time we'll spend drawing and doing floor plans and that kind of thing. So I generally have, like, a good sense of how much it's going to take to get a client a design package. That is phase one. So you come on board, you get your timeline. We're mood boards. Step one.
Once we have a design direction, we then move into. And while that's happening with me, the team is drawing and doing autocad and working on floor plans as built and proposed. And I'm trying to get the aesthetic together and get to know the client. In the mood board phase, there's a lot of getting to know the client. Once we have a direction and a settled upon sort of proposed floor plan, construction plan, whatever we're doing, then we move into sourcing and renders and, you know, we source everything, lighting, custom furniture, we spec it all out, bathroom vanities, countertops. And, you know, certain things are like, okay, you're going to, you're going to choose the countertops, the exact countertop when you go to the slab yard or whatever, but we have a general direction. This allows our render team to create very photo realistic images of what this project's going to look like. And there are two rounds of changes after that. So all that is our flat rate. Our flat rate is depending on the project. It's not small, it's large. By the end, you've got a full roadmap for yourself, the contractor, the client, everybody knows where we're going to end up. There's no questions.
[00:22:12] Speaker A: Real quick on that.
[00:22:13] Speaker B: Yeah, go ahead.
[00:22:15] Speaker A: So sorry. So you say it's flat rate. Does that, is there like a tiered structure based off of square footage? Just like project scope? You know, because it's flat rate for a 1200 square foot bungalow versus a flat rate for.
[00:22:30] Speaker B: It's different per project. And I basically calculate it based on the number of hours I think it's going to take everybody to do what they need to do. So I have an hourly rate. The design team has an hourly rate. Like I said, I know what our render team charges. So I sort of added all. It's not mathematical in the sense that you're talking about where it's like fixed like that. It's more me doing sort of like intake and discovery with the client before I even sign them on. So I do, do. I guess I skipped that part. But, like we do, I don't charge for the initial consultation and calls and sometimes there's a couple and I'm okay with that. You know, I'll even do a site visit if it's local. Like, I don't mind. I know a lot of designers get very hung up on. We gotta charge hourly for your site visit. Like, I don't know. I don't mind.
I don't think it's. If it. I mean, depending on the size of the project, like, if you're talking, like, a project with, like, a $500,000 budget or something like that and more, I think it's okay to do, like, a walkthrough.
[00:23:30] Speaker A: Right? Make sure, like, get a vibe check.
[00:23:33] Speaker B: Yeah.
[00:23:33] Speaker A: And be able to give your proposal a lot more accurately.
[00:23:37] Speaker B: Because I have boundaries, you know, I'm not that type of designer who's gonna be, like, making four or five trips out. Like, I'm like, yeah, I'll come meet you, but I'm not, like, rolling up there giving you, you know, multiple visits and free advice all day long. You know, like, you kind of have to.
You set the tone from day one, like, how they're gonna treat you. So you. I'm very firm in not, you know, in terms of, like, yeah, I'm gonna come. We're gonna do an hour. We're gonna talk. This is what we're gonna do. And, you know, I'm not doing any more than that until we.
[00:24:12] Speaker A: Right. And then here's my process.
[00:24:13] Speaker B: Yeah.
[00:24:14] Speaker A: Quick question. So that timeline that you talked about, is that delivered to the client before they've signed a contract? Like, do they see that? So that comes after.
[00:24:21] Speaker B: Yeah.
[00:24:21] Speaker A: So before someone signs a contract, you have walked them through your entire process from, like, a generic standpoint of, like, this is how it goes. And then they get the more finite, detailed version, which has no, like, no, like, timestamps on it. But it's like, generally this is going to take us three to five weeks. Generally. This.
[00:24:40] Speaker B: It does have timestamps. It does say, for example, like, week of April 29. Here's what we're going to accomplish. Week of May 1. Here's what we're going to accomplish. It does.
[00:24:50] Speaker A: It does.
[00:24:52] Speaker B: It is pretty detailed. Yeah. So I don't send that out until after, because why would I spend the time? But before they sign on, they do get a detailed scope of work that shows design phase, procurement phase, and what is covered hourly.
Yep.
Percentage. So every materials invoice that goes out there is a 20% procurement charge. Yep. Line item at the bottom. 20%. And that is, again, based on my business analysis of how much we were spending, how much time and effort we were spending before in hours, because I used to bill all that hourly, and 20% actually is a little bit low, I'll be really honest, because there's. Delivery companies are trash and ruin our lives daily.
There's broken things, there's defective things, there's all kinds of things. And 20% is like the least that I think it should be. Did you raise your eyebrows? Cause that was low. Like, I don't know what I think 20% seems like standard, but I think it should be more.
[00:26:03] Speaker A: I've heard like in the twelve s. So when you said 20%, everybody's excited and everybody's running to their computers right now being like, well, that just went up 20%.
[00:26:14] Speaker B: How can you do it for less?
[00:26:16] Speaker A: So. And that excludes shipping and receiving. That's just procuring that.
[00:26:23] Speaker B: That includes our receiving.
[00:26:26] Speaker A: Oh, okay, okay, okay.
[00:26:27] Speaker B: Have a warehouse. It includes it. It includes the receive, inspect, deal with defects. So we have a storage that our things come to. One of the design team will go check it out, receive the delivery if they need to, et cetera.
[00:26:42] Speaker A: That is a big differentiator because I was hearing 12% for procurement, but then receiving warehouses built separately. So it probably comes out. Honestly, probably you're looking at closer to 25 ish percent once you add those up, if you did them separately. So yes, 20%. That's amazing.
[00:26:57] Speaker B: But when we're working in other cities, there's still, I still charge 20% even if there's a separate receiving warehouse charge. Like if we have to set up a warehouse that gets passed on to the clients, but I'm still charging 20% because we then have to deal with the warehouse, you know?
[00:27:10] Speaker A: Yeah, 100%. And when you're not there, you're like, it's probably taking way more emails and phone calls to, to get that information.
Okay, so then once you get through there, I'm assuming your final phase is like installation, styling. That talk us through billing of that and also your process, what that looks like.
[00:27:29] Speaker B: So that is hourly. We have an install day or days, depending on the project. We hire the movers, we do the things, we move all the things. We judge.
Accessories and artwork is hourly sourcing so that there's no way you can do it any other way. Again, you can't pre purchase any of it. Artwork is so emotional, sometimes takes clients a really long time to decide on artwork. So it's the unpredictable nature of it that makes me charge hourly for it. We also, by the way, during the execution phase, we do charge hourly, obviously for site visits, and we charge hourly for dealing with vendors or tradespeople. If it takes me long, if it takes anybody longer than ten minutes. We do charge hourly to execute because sometimes say you're getting a custom sofa maid and you got to go there and you got to talk to them and you got to check it out. You got to inspect, you got to, you know, again, the unpredictable nature of it or talking to contractors or whatever. I have to bill hourly.
[00:28:39] Speaker A: Yeah. So, for instance, when you're doing custom sofa and you're going to your workroom that is billed hourly separately from that 20% procurement fee.
Got it. So that time is covered. I think that is so genius.
[00:28:54] Speaker B: And it's longer than ten minutes. Yeah. Like, if I'm calling my guy and I'm like, hey, what's going on? Or if I'm texting and I'm like, send me some progress pictures, who cares? Right. But if something needs to be adjusted or fixed or it takes, you know, whatever time additional that you have to be compensated for that. The idea behind procurement is like ordering, tracking, receiving, inspecting.
That's what procurement is. So anything beyond that, you have to charge.
[00:29:22] Speaker A: Yeah, for sure. Where in this process do you accommodate for, like, scope creep? Like, if someone is like, okay, actually, let's go ahead and do the basement that I told you we didn't want to do. Is that like a sub agreement and a separate contract and you kind of start over and it follows the same process?
[00:29:41] Speaker B: Absolutely. And that is why it is so important to have a process so that nobody has any questions. There's no question. It's like new space, new scope of work. Addendum to the contract.
[00:29:51] Speaker A: Ansax has always been known for their premium stone, and coming soon, they are coming out with new stone furniture, clothes collections, and bathroom consoles carved out of a single block of premium marble. Sign up for ansax
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[00:30:07] Speaker B: As they launch in June.
[00:30:09] Speaker A: So when you are in your installment phase and you are hourly sourcing for accessories and artwork, where are you collecting the funds for that? So, like, the actual cost of those accessories that you are now getting at.
[00:30:25] Speaker B: The final stage, I don't collect that upfront. What our clients love about our way of doing accessories is that we come in, get the place photo ready, and then they decide what they want to keep and what they don't want to keep. So they actually, I'm not asking them to decide on, like, a vase without actually seeing it in the space, you know, so we do what we do. We source, we bill it hourly. The client, we install it all. The client says, yes, yes, no, no, I need this. I don't need that. We return everything. You know, that we. That they don't want, and then they get a bill.
[00:31:09] Speaker A: When you are sourcing for artwork, I know artwork can be just, like, super personal for people. Are you in your initial design boards? Are you giving, like, this is the type of artwork, or, like, these are the artists that we feel you'd super connect with. How do you. How do you get that far in the process and then be like, boom, here's the, you know, six by six artwork that's in your living room. That's, like, kind of the focal wall.
[00:31:30] Speaker B: Of the whole space. I think it depends on the client. For some clients, artwork is super important. For others, they're like. They just want, like, placeholders. So in our renders, we'll always put placeholders and things that I, like, think may work. Or, you know, sometimes it's just, like a generic thing, but they're not ready to think about it at that stage. So I'm not going to push them. Like, you have to sort of compartmentalize clients decision making throughout this process. And so asking them to think about artwork unless there is a piece that they love from day one, which that does happen, too, in which case, I'll get the dimensions and I'll place it in the space, in the renders for them to see where I think it should go.
But most clients aren't ready to think about artwork until the end, and they're okay if that process takes place longer, and so am I, because, again, it's hourly, so I'm not like, clock is ticking, losing money. It's like, we're going to take our time and do this right. And I've set up the expectation that you're going to get a bill for me helping you source artwork.
[00:32:32] Speaker A: Can you share with us how you collect a retainer? If you do? Like, where is money collected in those three phases of process? So there's, like, the initial. Do you have a retainer? What is that? Percentage? If it's a percentage or flat? Right. And then also, do you collect money for everything that's procured before any ordering starts? Is it just as things get ordered? I know that that can get sticky for some people.
[00:32:57] Speaker B: Um, so phase one, our design fee, generally, I'll collect half upfront, and then when we send the round one design package, I will collect the rest. Then there are two rounds of changes. So at that point, we're compensated for the whole design package. They could walk away if they wanted to and never execute it.
We've done the work, you know.
Then phase two, procurement. I do not order anything until they've paid that invoice.
Why would I? I used to do that. I used to, you know, we've all gone through it, too. When you start, you're like, okay, I'll use the client's credit card. Nope, not doing that. That's a liability, and I'm not doing it.
So we now send out our invoices. They click to pay, and we move forward with ordering. So that's how procurement works.
[00:33:47] Speaker A: Who do you send your invoices out through? Like, what software do you use?
[00:33:50] Speaker B: Quickbooks. Very simple. Yeah, we just use Quickbooks.
[00:33:53] Speaker A: And so those invoices would have that 20% procurement fee directly on top of it at that point. Or procurement, 20% comes later.
[00:34:00] Speaker B: Yep. Nope. The procurement is a line item on the invoice 20%. And the total invoice includes the 20%. There are no secrets there.
[00:34:10] Speaker A: So once you've gotten to procurement because your design packages are done and now you're in, like, the implementation phase alongside procurement, are you sending monthly bills for those hourly site visits and walkthroughs and meetings? Got it. So from that point on, that goes and gets billed hourly on a monthly basis, and then that everything at the end ends up being like one final bill. Is that correct?
[00:34:35] Speaker B: Third base, pretty much. Unless we're still doing artwork, in which case we keep that monthly billing cadence for lagging, things like that, you know? But, yeah, it's monthly billing every 30 days.
[00:34:52] Speaker A: And is your hourly rate for install the same as your hourly rate for project management through the middle?
[00:34:58] Speaker B: That's a good question. My hourly rate is the same for install.
I am debating changing install days to a day rate because it's insane, especially for our out of town clients.
I don't want the stress of feeling like I'm there too long. And I don't know, I'm on the fence about it. Like, at the end of the day, it is what it is. You're there for 8 hours and that's what it costs. But I want to be reasonable and give myself and our clients the peace of mind that everything's going to get taken care of without some wild amount at the end.
[00:35:42] Speaker A: Right. Have some built in cushion for both of your sakes.
[00:35:46] Speaker B: I think right now, the way I've been doing it recently anyway, is our out of town clients, it's a day rate for me to show up.
For our La clients, it's hourly because that way, because when I'm traveling too, it's like the whole team's not going with me versus when we have an install here in town, I can send our project manager or one of our design assistants, and their rate is lower. They can get a lot done without me versus our out of town clients who I like to get that FaceTime with. And I think they deserve that because they don't see me as much or, you know, like, it's just kind of.
It makes sense to me to do it that way.
[00:36:27] Speaker A: You sort of answered. You alluded to my next question first. How many people are on your team currently?
[00:36:34] Speaker B: There's a total of four of us. We've got a project manager salary, full time design assistant salary on salary, and then a design intern who comes in part time.
But we could be growing soon. I don't know if I'm into slow growth when it comes to people, because hiring is probably the hardest part of this job.
[00:36:58] Speaker A: The only thing worse is firing.
[00:37:00] Speaker B: Yes. Right. And so it's like, well, when to hire and who to hire and what, you know, all that. So it's kind of tough. So I like a small team. I'm not.
I'm not really interested in people managing any more than I need to. So I'd like to keep a small team as long as possible and max everyone out before we add.
[00:37:21] Speaker A: Totally. I definitely feel like you're right at that threshold. You have a team of four. I feel like once you get to, like, six, then you go from, like, designer to people manager, and I'm not.
[00:37:29] Speaker B: Here for that, so.
[00:37:32] Speaker A: Okay. A couple of follow up questions about your team. And so you said, oh, you can send your project manager because they're. Their hourly is less. So you do bill your team at different rates back to your client?
[00:37:44] Speaker B: Definitely. And that's all laid out in our contract and in our scope of work, too.
[00:37:49] Speaker A: So if there's a situation where you have your project manager, your junior designer, and you all in a meeting, are you just billing at your max rate for 1 hour, or does each of those people's time get billed hourly? I if there's.
[00:38:02] Speaker B: So that's. That's a good question. If I'm there, I'm billing for my time.
If my project manager and design assistant are both there, I'm generally only billing, like, for the design team because it's like a design team rate, so they're all billed out at the same rate.
[00:38:22] Speaker A: Got it. And is that literally a plus b plus c equals d or. It's kind of like, it's a slightly lower group rate.
[00:38:29] Speaker B: No, lower group rate. It's a plus b.
[00:38:32] Speaker A: Got it. Okay, perfect. And so when it comes to install, you've got x number of bodies there. Um, and then, you know, some designers will have, like a handyman there who's, you know, hanging the artwork, that sort of thing. Is that something that you contract out or that bill would get sent straight from that handyman directly to your client?
[00:38:55] Speaker B: It depends.
I do it both ways. We have our regular handyman, or handy handyman, as it were, that we, that we hire for big installs. And sometimes just for ease of billing, I'll put there. So it'll be like, designer rate, design team rate, handyman rate, all on one invoice just for ease of billing. Now, if it's something smaller that we send the handyman out to do later, generally, I don't know. I've done it both ways, generally.
Sometimes I'll have, I'll collect the money and pay the handyman. Like, I'll send the invoice, or sometimes I'll have the handyman bill the clients directly. It just, it just depends. I'm fine doing either.
[00:39:46] Speaker A: Okay. I feel like proposals in that initial conversation of how you send a flat rate for that design phase, that is the part that feels so ambiguous so often, especially to a newer designer. It's like, how do I know how long those things are going to take? And I know you had mentioned that tracking your hours is just a pain in the ass. Nobody likes to do it. And there's the hours in your sleep when you're thinking about designing that aren't getting logged. And so it just gets messy. But as you said, you know how long it's going to take for you guys to do your renderings. You know how long it's going to take those things. So I'm curious, as a business owner, how do you get to those numbers? Like, at some point you had to have been tracking those hours.
[00:40:28] Speaker B: I don't know my hours, but again, it's instinctive to me. I was a lawyer for ten years. So it's an art, it's a skill. Like, nobody who's ever worked with me as a designer has ever been good at it. It takes years. So, you know, you can't beat yourself up for being terrible at hourly billing in the beginning because everyone's terrible at it, even the most seasoned professionals.
You have to find what works for you and how to track it.
I think it's a good practice, even if you're not sending out hourly bills. Like, how else are you going to quantify your value? How are you going to quantify the profitability of each job?
You have to be able to look at how much time you spent on it. And the only way to do that is to keep notes track hourly. We use a system called material. I know a lot of people use studio designer. We use material. There is a very handy time tracking feature in there.
You know, use a timer, do what you got to do. But, like, I'm sorry to tell you, like, you are an interior designer, you need to figure out how much time you're spending on your projects.
[00:41:39] Speaker A: 100%. And even a step beyond that, you. You need to know how much time your team is spending on projects.
[00:41:45] Speaker B: 100% sure.
[00:41:47] Speaker A: You might say, I know in my gut that I probably spent, I spent 40 hours on that, but it's like, how long did it actually take your team? So, for your team, I know you said that two of your team members are salary, which means that in order to work for you, they do not technically have to be logging their hours in order to get paid. But what does that look like from an operation standpoint? Like, to make sure that you know what they're working on for how long.
[00:42:12] Speaker B: They're the same as me. So, um, they bill the clients exactly the way I do, which is if you have to physically go anywhere, you have to talk to a trades person or contractor for more than ten minutes.
You enter your time.
No.
[00:42:28] Speaker A: What about. What about administrative tasks that aren't necessarily billable directly to a client? How are those handled internally for your team?
[00:42:37] Speaker B: They don't bill their time for that. It's just overhead. It's part of my overhead. I do, like, a monthly profit tracking. I keep a p and l.
I love working with numbers. I love looking at them. It's like a game to me. And so I am always looking at our rolling estimate, like, monthly. Like, how did we do this quarter? I have goals that I want to meet, and we didn't meet them. Well, why? You know, like, it's like managing your diet. I don't know. You have to manage, not just, like, let the money just do its thing. You kind of have to, like, actively engage with your finances very regularly, if, you know, if not daily, at least like a few times a week. Like, you can't just assume that they're going to manage themselves. So you got to always be looking at it.
[00:43:25] Speaker A: You have to know your numbers. You have to know what money you're spending, what money is coming in, and all of the time, because time literally is money in this business, how you're spending your time.
[00:43:36] Speaker B: Also, there's a lot of, you know, you ask about how I know what my team is doing, because we are remote. I mean, there are days where everybody's here together in the studio, but we're remote. It's remote companies. I will never have a company that's not remote. I'm a mom of three. I need control over my time. And I think that most, most people do. Most people that I would hire tend to be, like, sort of responsible and independent thinking. And I don't think that forcing people to show up, people like that, with that personality type that I look for, forcing them to show up somewhere every day, all the time, probably is not. Not a good fit. Right. So the way that I communicate with my team is I have a weekly all hands. I have weekly individual check ins with each of them for 30 to 45 minutes. And then sometimes, if somebody's going a little off track, I'll do a daily for 15 minutes. Like, I spend time speaking to them, understanding what they're, what challenges they're facing, what their day looks like. We have a system called GQ's that we use, which is basically like a group task manager. Um, so everybody can see we don't use emails and calendars and all that when we do, but, like, it's important for your team to see what everybody else is doing, too. So using gqs has really helped us with that, too.
[00:44:51] Speaker A: Oh, that's so fascinating.
I totally agree. And it's been a big learning curve for myself at my companies about when you have really independent, responsible people, forcing them to add, you know, 45 minutes to an hour each way into the office every day and making sure that they're working for that exact 8 hours a day is really counterintuitive. And I definitely went through this growth spurt in the company where I was like, okay, we've got a big office now. Like, everybody's coming in. Like, we're at this level. And it didn't take a very long time for everybody to point out to me how wrong I was and that they were more capable of doing their job from home and handling their own schedule. And we've now shifted back to, we'll have a couple in office days a month, but for the most part, until a deadline is missed, it's not something that I have to check in with them on. And that's a privilege and really a proficiency and productivity level that we have achieved that is so much more productive than when I made everybody make sure that they got up and did their hair every day to come in and drive 45 minutes to the office to sit in here. And so that's definitely something that I think was like, ingrained to us growing up, that like, you have to go into an office and when you're a serious company, like everybody's got to be in there nine to five. And I definitely have learned that that is not the case. And we are no longer in that mindset.
[00:46:15] Speaker B: We're definitely not. That's kind of like an old school way of thinking about things. And I do think that when you give people leeway to manage their time, they tend to be productive at the times of day that they are productive and then they take a break when they need a break.
I will say though, that having accountability is super important.
And again, our task manager, GQ's helps with that because I can see what you're supposed to be doing because I put it on there, there's due dates and the whole team can see what everybody's doing. All our calendars are shared. They know I'm doing this podcast right now.
The communication is free flowing all the time. All the time.
So I think you can't be remote and not talk. I actually made that mistake in the beginning where I had remote employees and I didn't do the check ins and I only did like one performance review every six months. Like now I have quarterlies with everybody where they fill out a self assessment and then we go over it and, you know, there's so much communication between me and my employees. So to go back to your question about like, how do I know how much time they're spending on stuff is? Because I just asked them and I'm always talking to them about it.
[00:47:26] Speaker A: Yeah, for sure. So we use slack in our office and everything. You know, there's a channel for each project and everything. I'm really interested to look into gqs and see what you have there. My team's going to be like, great. Came back with another software, but it's like 1000%. I feel like I talk to my team ten times more via slack than I do when we're in the office and an office day just turns into a okay. Now that the day's over, I'm going to go home and work another eight hour shift because I can actually get to my to do list.
[00:47:54] Speaker B: You can't. Being working physically together is distracting. It can get really distracting.
[00:48:00] Speaker A: Even though we love each other, the best intentions it like it's just another level. So if you're thinking about where to spend and where to cut back, consider not getting office space and requiring everybody to get in for as long as you possibly can.
[00:48:15] Speaker B: No, I do think some of that is ego. Like, I know a lot of people are like, want to have their name on the door somewhere or whatever. You know, maybe they take client meetings in person or something like that. Like, I personally don't care. I really don't care to have Sagrada studio, like, emblazoned nana on a door. You know, like, I don't care.
[00:48:39] Speaker A: Um, I'd like to. As we get close to wrapping up, I would love to know a little bit more about when you're doing, like, full new, new construction, new builds or remodels.
How are you helping the client to manage the budget when you make that shift from construction and design fees to, like, the furnishing budget of it? And how do you ensure that you're getting to the end of this project feeling like it is a completely finished project and you didn't have to, like, skimp out on the furnishings because so much of the budget just ended up going to, like, whatever came up during construction.
[00:49:18] Speaker B: If you find the answer to that question, you let me know, because I don't know. So in material, one of the functions of material, the client management system that we use is, like, there's budget tracking. And so each item, you can see how much it costs, and there's a total at the bottom and the whole thing.
I can't think of a single project where I haven't had to make concessions because of construction costs. I cannot think of a single project.
And that is a conversation I have with clients from day one. And I basically tell them there are going to be lots of choices. You may not like all of them. You always have a choice. It's either stick to the budget and find something cheaper that you may not like as much or find more money. I don't know what to tell you, like, and I think clients come to me for that. You know, it probably sounds, I bet there are people who would never say that to their clients. But it's just, again, me being very comfortable with conversations about money, even our most wealthy clients, who like, fine, we're going to spend $50,000 on a carpet. You know, we do have those situations, like, I'm very open with them. Like, it's your money, it's your choice. Here are your options. You tell me how you want to spend it. That's all I can do for them. I can't make fake promises, like, yeah, this is exactly, you know how it's going to go from start to finish? I wish, but that's never been my experience.
[00:50:52] Speaker A: Yeah, absolutely.
How you mentioned a little bit about how you see you're considering possibly doing a day rate for install instead of hourly. Are there any other possibilities, combinations of billing that you have thought about exploring and you're still in the R and D phase of deciding if you're going to make the switch?
[00:51:14] Speaker B: Not at this time. I do think the three phase building is great, and I'll tell you why. Like, last year, we had a project I was so excited about. It was a full renovation of this historic home. And we got all the way through to the design phase. We did the sample meeting. You know, sample meetings are hourly, but like, I brought all this stuff. We're also excited. Then I get a call on like a Tuesday that's like, hey, over the weekend we saw a house we really love and we are going to sell this house. You know, but guess what? At that point, I had been paid for the work that we did. So I was really sad that the project, we weren't going to get to sort of do it. But at the same time, I didn't feel like I was screwed. Like any money was left on the table or whatever, you know? So this works in those scenarios. You really, we're really covered right now at each phase, you know, design, procurement, execution, installation, we are, we are covered. And it took me a while to get there, so I don't know, besides the day rate versus, I mean, nobody, to be honest, nobody's giving me pushback on, on the hourly, not much anyway on the hourly for installs because, you know, hot tip. Like anytime clients can see you there or physically speak to you, there's no dispute to be made. You did the work, right? You talked to them, you showed up, you lifted the boxes, you hung the things.
So where's the dispute? You laid it all out in the contract. Like, if you've been clear from the beginning, there's no pushback.
Maybe it's just me being like, am I really worth this much for a ten hour day?
[00:52:57] Speaker A: You know, it's when you start second guessing yourself. It's when you leave room to step out of your own process that you're like, oh, should I really be charging this? Yes.
[00:53:06] Speaker B: But I will say with travel, like, it does feel insane to like, charge for traveling on a plane when I wouldn't, I wouldn't, I don't know, it just feels weird.
[00:53:18] Speaker A: Day rate down. That, that makes sense to me, for sure. Plus, plus your travel fee, obviously. Um, okay, I have two more burning questions. The first one is for artwork. Are you charging markup on those pieces of art that you procure in addition to that hourly rate?
[00:53:38] Speaker B: Yeah, there is procurement.
[00:53:39] Speaker A: Yeah, there's the procurement, but not necessarily. This is the retail. This is what we acquired it for, and it's 20% more is the retail price that we're giving them.
[00:53:53] Speaker B: If the gallery has given me a discount, which they often do, I charge retail, so I am not marking up past retail, but, yeah, I'm not sharing discounts. I also used to do that, which we all do it. We're like, yes, I got to get clients. I'm going to give them the discount. And then very quickly you're like, why would I do that? I'm not doing that. That's my profit. That is, out of all the millions of things you could have selected, you selected this one from this business, for this project. You deserve that commission, 1000%.
[00:54:23] Speaker A: Okay, last one. And it's kind of throwing you for a loop. It's kind of going off. But I just want to know, and I feel like you will tell us like it is. You have been recognized by so many prestigious outlets, including art digest. Um, I'm curious, how do you feel like this visibility has influenced your approach to billing and client acquisition? Like, for instance, do you feel like when you start getting those accolades, does it help to either justify or even potentially raise your rates? Or do you feel like it just gets more people knocking on your door? Like, everyone listening is like, oh, if I could just be an arc digest. Like, that's going to be the game changer. Like, what is it really like?
[00:55:06] Speaker B: Art Digest is a game changer? Because I do. There's not many people who make it in that print magazine. It's very thin these days, as you all could see. So every time I get a recognition like that or the new american voices thing, it's again. And you just look at the numbers for prestigious publications to recognize you in that way, to give you space to name you a new american voice. Last year, there were only eight of us in the world. This year, again, they're about to probably announce. They announce it in the summer. Right? But, like, when you become part of a group like that, absolutely charge more, 100%. You have been recognized as an authority and a trusted source in the space that justifies you charging more money.
Period.
[00:56:01] Speaker A: Yeah.
[00:56:02] Speaker B: Thank you.
[00:56:03] Speaker A: Thank you for giving that permission to anybody who's listening and needed it.
[00:56:07] Speaker B: That's why I will say, you know, you don't get clients. Like, there's this idea, like, all of a sudden, you get followers on Instagram, you get visibility. You get, you know, more eyeballs on your work. But at the end of the day, like, PR isn't going to get you clients. Marketing gets you clients. That's a very. It's a very different function that I think people aren't always clear about. You know, like, it's. PR is absolutely necessary to get you those eyeballs, but then you need to market in order to get the clients, you know.
[00:56:46] Speaker A: Yeah. To convert those different podcast episodes. Yeah, absolutely. I'm like, I'll link to Rebecca Goldberg, our publicist, in. In the show notes. Hey, Ma. I would love to know, what are you super excited about right now for Sagrada? Fun, exciting projects. You can tell us about any collabs or product design. What's coming up that we can break here?
[00:57:09] Speaker B: Wallpaper.
I'm so excited about it. It's a very new conversation, so don't hold your breath, because wallpaper is not a quick thing.
It is a collaboration, and I'd like to do more product stuff. I really feel like our point of view has become narrow enough to where it's kind of identifiable, and I would love to sort of explore how we can kind of make our aesthetic more accessible to people. That's always the goal.
There are conversations about television. Who knows what will happen there?
These are all just like, may happen. The wallpaper, you know, like, the conversations are happening. So I'm excited about all that work wise. We've got a restaurant opening in Santa Monica very soon here. We just finished a complete restaurant renovation. I'm super excited about. We've got another med spa that we're doing.
We've got some really cool residentials.
So, yeah, that's what's going on. I'm going pipe one. I'm doing a panel. I'm sort of like, you know, this year, this second year, being in business, I'm really trying to, like, be more social, be out there, be, make a community out of it, because I do really enjoy being part of the design community, so.
[00:58:32] Speaker A: Well, I will definitely come see your panel at high point. I'll be out there. It's my first trip, and I will definitely come say hi. Thank you so much for your time today. You've given so, so much. You were so generous with your knowledge. I appreciate it immensely, and I really hope that we will get to chat again soon.
[00:58:48] Speaker B: Me too. Thank you.
[00:59:01] Speaker A: For more in depth analysis of this interview, including exclusive downloads, examples, and more, don't forget to subscribe to the interior collective on Patreon. We are building an amazing private community of interior designers and industry experts open to candid conversations and answering questions. Join us on Patreon in the show notes
[email protected] the interiorcollective thank you so, so much for tuning into this episode. Producing this show has truly been the honor of my career and I cannot believe I get to have these conversations. A big, huge thank you to our production team at IDCo Studio in Quinn made, as well as this season's presenting sponsor, Ansax. Your contribution literally makes this podcast feasible and the biggest thank you to you, our listeners. Your sweet notes, DM's, and reviews mean so much to us as we work to keep our show free and always accessible. Until next time, I'm Anastasia Casey and this is the interior Collective, a podcast for the business of beautiful living.
