Interior Design Business Terminology List: 12 Must-Know Terms For Beginners
If you’re new to owning an interior design business, or if you’re aspiring to launch one, you’ll need to check out this interior design business terminology list! These 12 must-know terms for beginners will be crucial as you launch your own business, craft your marketing strategies, work with clients, manage design projects, and so much more.
Read on to view my interior design business terminology list for beginners - not just definitions, but also practical applications and examples of each.
Interior Design Business Terminology Related To Pricing & Income
1. Consultation Fee
Definition: The amount of money an interior designer charges for the initial consultation meeting.
Example: A consultation is an in-person meeting with the potential client. The purpose is to discuss the proposed project details. You will typically do a walk-through of the space(s) to be designed, and you’ll both have the chance to share your thoughts on the project.
Learn More: Read this blog post to get a behind-the-scenes look at real designs, 3D renderings, and invoices from a project in my business. You’ll also learn more about how I determine my pricing structure and how it has evolved over time.
2. Project Minimum
Definition: The minimum amount of money you determine as the threshold in order to accept an interior design project.
Example: Let’s say a potential client has a budget of $10,000 for their total project, but you’ve set your project minimum to be $20,000. You would simply choose to pass on this potential project because you know that this client’s budget wouldn’t be enough to cover your design fee plus high quality items for their space. As you grow as a designer, you can continue to increase your project minimum to ensure that you are working with clients who can afford your luxury services.
Learn More: Read this blog post to learn more about the intricacies of pricing for an interior design project. I share a behind-the-scenes look at a real project invoice, showing my consultation fee, project fee, and markup from my trade items.
3. Trade Discount
Definition: An exclusively low price on trade products just for professional interior designers.
Example: Trade discounts can range from 10%-50% per product. You could purchase a couch from a trade vendor for $1,000 to use in your interior design project. This couch might sell for around $2,000 at a retail store like West Elm.
Learn More: Read this blog post to learn how you are able to obtain trade discounts and what the process looks like from the manufacturing warehouse, to the vendor, to the designer, to the consumer.
4. Product Markup
Definition: The amount of money you add to the original price of the item you sourced from a trade vendor. When you resell the item to your client, you keep the product markup as profit (this is a totally legitimate business practice for interior designers).
Example: You purchase the product for a cheaper price than the consumer, turn around and sell it to your client, and keep the difference as profit.
Learn More: Read this blog post to learn how the process of sourcing a trade item works and how to determine the product markup so you can earn a profit.
Interior Design Business Terminology Related To Project Management
5. Full-Service Interior Design
Definition: An interior design service in which the designer is in charge of managing the logistics of a project from start to finish - from the design concepts, to choosing and ordering the products and furniture, to installation, to the final reveal.
Example: A full-service interior design project is similar to what you’re already doing in your home - creating a design and mockup, choosing and ordering furniture, and installing and decorating the final space. Full-service design is for clients who are willing to pay for the luxury experience of not having to lift a finger during the process.
Learn More: Read this blog post to understand how offering full-service interior design can elevate your business and learn the 10 steps every designer should follow for full-service interior design.
6. To-The-Trade / Trade Vendor
Definition: Trade vendors act like a “middle man” between interior designers and manufacturers. They sell products directly to interior designers at exclusive discounts.
Example: You purchase a couch for a living room design project from a to-the-trade vendor called Four Hands rather than a retailer such as Pottery Barn. The vendor offers exclusive pricing discounts for interior designers.
Learn More: Read this blog post to learn who is eligible for to-the-trade discounts and how to charge a product markup in order to make a profit.
7. 3D Rendering
Definition: A photorealistic image that shows your client what their space will look like once it's completed. It’s a 3-dimensional layout of each room that you will be designing with all of the completed elements in place.
Example: You would create a 3D rendering during the initial phase of the design process to showcase your ideas for the final design. You will need to use a software to accomplish this – check the term “SketchUp” for more information.
Learn More: Read this blog post to learn how 3D renderings can upgrade your design services and speed up your overall process, leading to more money for your business!
8. Receiving Warehouse
Definition: A large warehouse for interior designers to store their client’s furniture and items after they have been received from a trade vendor but before installation day.
Example: You would use this receiving warehouse as the shipping address when you order your client’s furniture, items, and other products that will need to be stored. When your items show up, it is the receiving warehouse’s responsibility to check for damages and keep them safe until installation day at your client’s home.
Learn More: Read this blog post to determine if you need to use a receiving warehouse for your projects, where & how to find a trustworthy receiving warehouse, and who pays for the fees (you or the client).
9. White-Glove Delivery
Definition: A premium delivery service that provides extra care and attention to your items. These movers are responsible for transporting, unpacking, assembling, and installing the products for an interior design project.
Example: White-glove delivery workers are hired for your project’s installation day. Some receiving warehouses double as white-glove delivery, so they actually have moving trucks and employees who will do the moving for you. This way, you (or your friends/family) aren’t trying to move large furniture or delicate items to your client’s home for installation.
Learn More: Read this blog post to learn how the process works for finding a receiving warehouse, storing your client’s items after delivery, and utilizing white-glove delivery on installation day.
Interior Design Business Terminology Related To Business Essentials
10. Resale Tax Certificate
Definition: A legal document that exempts your interior design business from paying sales tax on items you plan to resell to your client.
Example: When you purchase furniture from trade vendors to use in your interior design projects, you invoice your clients for the cost of the products. The resale tax certificate allows you to collect sales tax from your client and then turn that tax money over to the government. You do not keep the sales tax, but you do keep the profit margin based on how you markup the item from the original purchase.
Learn More: Read this blog post to learn how to obtain a resale tax certificate and how to mark up your trade items so you can earn a profit during this resale process.
11. SketchUp
Definition: A professional design software for creating 3D models in architecture and interior design.
Example: You would utilize this software to create photorealistic 3D images of the completed design space for your client during the early design phase of your project.
Learn More: Read this blog post to learn how to start 3D rendering and gain access to my SketchUp Fast Start Course.
12. Residential Design Contract
Definition: The legal document you will use to outline all of the relevant information for an interior design project - what you will provide to the client, how the client will pay you, what is permitted/not permitted throughout the design process, and more.
Example: Some examples of important information that should be included in your residential design contract are: scope of work, client’s furniture budget, pay rate and procurement, cost of goods, installation and reveal, photography, revisions and drawings, deliverables and disclaimers, and more.
Learn More: Read this blog post to learn the importance of always using a contract for your interior design projects, and gain access to the exact contract I use in my residential design business (+editable template!).
Your Next Steps After Reading The Interior Design Business Terminology List
Now that you’re familiar with these 12 terms for interior design business owners, I’d love to invite you to check out my exclusive group for interior designers, Design Business Secrets+. Inside this group, I provide 1-on-1 feedback as you work through your journey of launching and running your own interior design business.
You’ll gain access to expertly designed tools, templates, and trainings - everything you need to run your interior design business.
Head over to Design Business Secrets+ today to get started!
