Why Flat Fees Nearly Broke My Design Business

If you’re listening to this, you probably want to run a successful interior design business, not just an expensive hobby. And in order for that to be true, you need to price like a business. One that’s profitable, sustainable, and supports the life you want to live.

In this solo episode, I’m sharing one of my most painful business lessons — a pricing mistake that cost me over 300 hours of work and left me with negative revenue. Yes, that’s a thing… and it’s a mistake I hope you’ll never make.

This story still makes me cringe, but it was also a massive wake-up call. I ignored red flags, agreed to the wrong pricing model, let fear drive my decisions, and ultimately learned how undercharging doesn’t just hurt your income — it undermines your confidence, relationships, creativity, and growth.

If you’re afraid to raise your rates or constantly second-guess what to charge, this one’s for you.

episode highlights

1. The project that nearly broke me — and what I’d do differently today
2. The 4 biggest pricing mistakes I made in the early years
3. How avoiding the money conversation cost me more than money
4. Why clarity in your pricing gives you confidence and freedom

Episode Resources

• Ready to shift your mindset around money and learn how to price with profit in mind? I’m also sharing details about my free workshop – Priced to Profit – where I teach the 3 strategic pricing shifts that helped me double my design fees. Save your seat now!

Read the Full Transcript ⬇️

00;00;00;03 – 00;00;35;18
Rebecca Hay
That’s when I realized that I could be very talented. I could have a team executing beautiful designs and have amazing client relationships. But if I couldn’t price profitably, I didn’t have a business. All right. I’m Rebecca Haigh, and I’ve built a successful interior design business by trial and error, podcasts, online courses. And so many freaking books. Over the last decade, I’ve grown from an insecure student to having false starts to careers.

00;00;35;25 – 00;01;05;00
Rebecca Hay
And now I’m finally in the place where I want to be. Throughout my journey, it’s been pretty obvious that I’m passionate about business and helping other entrepreneurs do the same. Each week, I’ll share tangible takeaways from my own experience and the experiences of other badass women to help you build your confidence and change your business. Hey hey hey, it’s Rebecca and you are listening to Resilient by Design.

00;01;05;03 – 00;01;30;14
Rebecca Hay
Today I’m getting real very candid about one of the most painful parts of my design business journey. Pricing. And I mean really real because I’ve made some more pricing mistakes than really anyone should, and probably more than I care to admit. And it took me years in some seriously tough lessons to finally feel confident in what I charge and how I charge it.

00;01;30;21 – 00;01;54;06
Rebecca Hay
So if you are stuck second guessing your rates, maybe you’re scared to raise your prices, or you’re wondering if maybe you’re leaving money on the table. Trust me, you’re not alone. I have been exactly where you are. So let me tell you about the project. That still makes me cringe when I think about it.

00;01;54;08 – 00;02;20;04
Rebecca Hay
Picture this. It is 2016. It is my second year in business full time, and I am beyond excited because I finally landed a commercial project. Yeah, it was a local bakery and the owner wanted me to design her brand new location that they were just about to open. I was super excited about the creative challenge. A little nervous, but I brought in a contractor who I knew.

00;02;20;05 – 00;02;39;24
Rebecca Hay
So I felt a bit more comfortable. I put together a proposal and I quoted her. When I look back on it, and I calculated it was roughly based on 60 hours of work, but I did a flat fee, which, honestly, I shouldn’t have done. I think I wanted to charge hourly, but she pushed back and she said that the other designers she’d spoken to had a fixed fee.

00;02;39;24 – 00;02;58;18
Rebecca Hay
And so I thought, okay, well, I better figure this out. And so I acquiesced when she told me to do a fixed fee. That was just the beginning. You know that expression when you give an inch, they take a mile? Hahaha. I definitely should have quoted her higher than that because when I did present my fixed fee, wait for it.

00;02;58;20 – 00;03;30;18
Rebecca Hay
She pushed back on that. Do you see a bit of a trend here? And you know what she did in order to get me to reduce my fee? She dangled a carrot. She said something like that. She’s like, Rebecca, if this goes well and I’m sure it will, we are going to have our other location ready for a re design, and you will get to design that, because we want to have both locations in the same design esthetic and like the eager people pleaser designer that I was back then.

00;03;30;21 – 00;03;55;15
Rebecca Hay
I cut my fee. Listen to this in half. Yeah. So I went from wanting to charge hourly because I was like, I don’t know how many hours it’s going to take to then putting together a fee proposal for a fixed fee and then cutting it in half because I thought this was my foot in the door. She dangled the carrot and this was going to lead me to more work.

00;03;55;17 – 00;04;29;07
Rebecca Hay
Right. Oh, so wrong. So very, very wrong. What followed from there was a total nightmare. She did not respect my designs at all. I was trying to be really good and push my design esthetic, which I knew was so beautiful, had such an incredible vision for the space. But everything I designed, she changed or didn’t like. She pushed back every single piece of millwork that I designed.

00;04;29;10 – 00;04;53;16
Rebecca Hay
She adjusted. She cheapened it. The colors I carefully selected based on the psychology behind food psychology and what causes people to want to eat. She changed. I spent so many hours on this project. It was, like, designed by committee. You’ve heard that expression, right? Where where, like, lots of people come to the table and everyone has a different idea, and you have to come up with a decision which is so hard when you have so many opinions.

00;04;53;18 – 00;05;19;03
Rebecca Hay
But it was really the committee of me and her who, in my opinion, didn’t have great taste. And she really just thought she knew better. And she definitely did not trust my expertise. She was rude. She was dismissive and she made the entire process totally miserable for me. Like, I actually think I’ve blocked a lot of this project out of my mind because it was so stressful and traumatic for me.

00;05;19;07 – 00;05;42;21
Rebecca Hay
I put in over 300 hours on that project five times what I originally quoted. Guys, that’s 300 hours. And in the end, I was so embarrassed by the final result that when they started to get media and press, I didn’t even raise my hand to say, hey, that was me. I didn’t share it on social media. I didn’t put on my website, I didn’t photograph it.

00;05;42;21 – 00;06;02;11
Rebecca Hay
I just wanted to get as far the eff away from that project as I possibly could. I did not promote my involvement in the project whatsoever. But here’s the kicker. It gets better, guys. Hold on. About a year later, I drove by the second location, which, by the way, the one I was supposed to design and she never asked me to.

00;06;02;14 – 00;06;23;28
Rebecca Hay
So much for the frickin carrot, right? But you know what I saw when I looked in the window? I did not step foot in it. But you know what? I saw the exact same freaking ugly Home Depot pendant lights hanging in that check location that I tried so hard to discourage her from buying in the first location. I knew then that there was never going to be future projects.

00;06;23;29 – 00;06;46;13
Rebecca Hay
I mean, she obviously just went and did that one herself, and that’s fine if she wanted to DIY it. Don’t pretend that you want a designer and tell me that she’s going to listen. I feel like I’d been played a little. The truth is, if I were to design that same size of project, that same scope of work today, I would probably charge at least ten times what I charged back then, at least.

00;06;46;21 – 00;07;08;29
Rebecca Hay
So the bakery project, it wasn’t actually a one off disaster. Sad to say, it was part of a pattern of pricing mistakes that I made for many years. And so maybe you’re going to recognize yourself in some of these. I’m going to share these mistakes that I now, in hindsight, after painfully going back through my own stories, I have learned to share with you.

00;07;09;00 – 00;07;29;12
Rebecca Hay
Mistake number one was I was charging hourly except for in that particular case. But I was initially, in my early years, charging hourly without any boundaries. So I thought hourly made sense because most of the people that I knew were charging hourly. The designer I worked for was charging hourly, and it just seemed fair, right? Well, I don’t know what’s it going to cost.

00;07;29;12 – 00;07;51;29
Rebecca Hay
Well, my fee is $125 an hour. Like that just seemed to be the industry standard. But what I didn’t realize was how easy it became to overwork and under charge. And constantly either discount invoices behind the scenes, like not even telling my clients or just not record hours that I was working at all because I was embarrassed that it took me so long to do something.

00;07;52;05 – 00;08;10;20
Rebecca Hay
There were no guardrails, there are no limits, and clients felt entitled to endless revisions because they were paying for my time. But then I would feel guilty and not charge for my time and then the part that I hated the most was towards the end of the project. If a client was on a tight budget, which most of my projects and clients back then were, they would say, don’t bother coming to site.

00;08;10;24 – 00;08;33;19
Rebecca Hay
It’s just the tile install, no need. And then mistakes would happen and I wasn’t there to catch them because they didn’t want to pay for my time. So there were no boundaries. Mistake number two was that I was basing my pricing on what I thought clients could afford. This is a big one, and I’m going to repeat this one for the cheap seats in the back, because I think a lot of us do this.

00;08;33;22 – 00;08;56;02
Rebecca Hay
I was basing my pricing on what I thought clients could afford. Instead of making a price or calculating a design fee based on the value that I provide it, or what the project was actually worth and what what the project required, I was making assumptions about people’s budgets. Raise your hand, nod your head and say if you have been there.

00;08;56;04 – 00;09;20;17
Rebecca Hay
I’m preaching a little because I just feel like this is so many of us. Here’s your spoiler alert pricing based on assumptions will keep you broke and stuck in a budget client cycle. Mistake number three that I made was I was avoiding the money conversation most of the time entirely. I used to dread talking about budget and money, and so I would bury it maybe at the end of our initial meeting.

00;09;20;22 – 00;09;49;01
Rebecca Hay
We’re kind of skipped through it all together and say, well, we’ll figure it out. Or once we dive in, or I would come up with some wording around that, and I would kind of hope that somehow would just work itself out and that I wouldn’t have to talk about it. It never did. Part of my problem in that bakery project likely was, now that I’m reflecting in hindsight, that I did not get a clear budget from her upfront of even like what we were looking to design with like or I didn’t even tell her whether it was coming from her or me if I remember the conversation correctly.

00;09;49;07 – 00;10;03;13
Rebecca Hay
She didn’t know what things were going to cost, but she had an idea of a budget in mind. And so instead of me putting together a budget, saying, here’s where the mill work’s going to be, the lighting that it are getting her buy in. Before I actually started to design, I just dough right in, which didn’t help the situation.

00;10;03;19 – 00;10;27;01
Rebecca Hay
And the last mistake that I in in sort of hindsight reflecting I see is that I wasn’t actually when I was calculating my design fee, I wasn’t factoring in everything I was actually doing. Do you guys know what I mean? Oh God, I wasn’t charging for time spent sourcing things or those quick phone calls that you would have off the cuff, or travel time.

00;10;27;01 – 00;10;45;26
Rebecca Hay
I’d never charged for travel time. I didn’t even charge like a mileage fee. I definitely didn’t charge for administrative work. If it was just me, like looking into a file or trying to find something. And any time that I spent troubleshooting shooting, none of that was factored into my pricing. So I was giving away hundreds of hours of work for free.

00;10;46;01 – 00;11;04;19
Rebecca Hay
I would just pay it off. Okay, well, I was in AutoCAD for two hours, so that’s two hours today on that project. Or I was, you know, at the fabric showroom or I was putting this scheme together or I was creating a presentation board. I wasn’t factoring in all the little itty bitty shitty things that happened in between.

00;11;04;22 – 00;11;27;20
Rebecca Hay
The real wakeup call came on another project when I’d finally switch to flat fees, but I still wasn’t paying attention to my time like I should have been. So my first lesson in flat fees with the bakery was that this is a bad idea because your hours can get out of control, but I wasn’t diligently charging for all my hours, and so I knew something had to change.

00;11;27;28 – 00;11;42;18
Rebecca Hay
And so when I was presented with this idea of fixed fees, I thought, okay, if I can do it in such a way that I’m charging a lot more for my design fee, then I think I can make up for it. But I made this assumption that if I moved to a flat fee or fixed fee, I didn’t have to track my time.

00;11;42;20 – 00;12;00;24
Rebecca Hay
No one had to track my hours because, you know what would be the point? Doesn’t matter if I said it was $20,000, that’s how much it was. It’s not about time. And I would relax thinking, oh, I don’t have to worry about tracking my time until I realized my bank account was getting low and I thought, what’s going on?

00;12;00;25 – 00;12;19;15
Rebecca Hay
This doesn’t make sense. I’m so embarrassed to share this story. This was a few years later. Let’s just take a minute to appreciate Rebecca slow learning. I decided something was this project was taking too long. I was a bank account getting low, like what was going on. I had this feeling, this, like nagging gut feeling. Like, I don’t know if we’re making any money.

00;12;19;17 – 00;12;36;26
Rebecca Hay
So I asked my team, they’ve been tracking their hours because most of them were on contract, not all of them. And so I said, can you put all your hours? We’re going to put an Excel spreadsheet together for this one project. I want to put all your hours in there. And well, when we looked at the numbers I basically started to cry.

00;12;36;29 – 00;12;57;26
Rebecca Hay
I at that point in time, had now paid my team more money than I had collected from the client for that phase of the project. What does that mean? That means negative revenue. That’s not even including my hours. I didn’t even put my own hours into the Excel spreadsheet because I had a pretty robust team at the time.

00;12;57;29 – 00;13;19;15
Rebecca Hay
So I was paying a lot of people and they were doing a lot of the heavy lifting, but I was still overseeing, I was still creative direction, I was still sourcing. I was still meeting with the clients like I was still doing a lot, but I just refused to track my time like a fricking crazy ass bitch. Like I did not help anyone down by doing this.

00;13;19;17 – 00;13;36;25
Rebecca Hay
I was at a break even point without even knowing it. I will tell you, before we even finished the project, we still had more hours to put in. And then from that point to the end of that project, all I felt was anxiety. Because every minute someone on my team worked on that project, I knew it was coming out of my pocket.

00;13;36;25 – 00;13;54;22
Rebecca Hay
But the good news is, is because of that project I started tracking hours religiously. I started asking my team to pay attention to my hours that I was tracking, and making sure my admin would enter in my hours, because I still wasn’t that good at it. I made sure they tracked their hours and that we tracked them against the project.

00;13;54;25 – 00;14;24;06
Rebecca Hay
In weekly meetings, we would look at the hours for any given project and compare that to what I had. Charge the client. That was my holy crap moment. That’s when I realized that I could be very talented. I could have a team executing beautiful designs, highly skilled, and have amazing client relationships. But if I couldn’t price profitably, I didn’t have a business.

00;14;24;09 – 00;14;48;02
Rebecca Hay
I several years in had an expensive hobby. It was a real wake up call because after that project it didn’t happen again. I had to get super clear on what I was paying out, what the actual cost of things was, what the hours were, and I completely changed my pricing formula. But honestly, it took me at least five years, if I’m being honest, to figure this out.

00;14;48;05 – 00;15;05;06
Rebecca Hay
So here’s what I wish someone had told me from day one. First, your price sets the tone for how clients are going to treat you right. Think back to my bakery example. When I was under charging, I was attracting clients who did not value my expertise. She saw me as a commodity, not as the expert that I was becoming.

00;15;05;09 – 00;15;30;13
Rebecca Hay
The moment that I started to raise my rates, the quality of my clients, my leads totally improved dramatically. But also confidence in your pricing comes from clarity. Once I got crystal clear on my costs, my value and my process, pricing conversations became so much easier. I wasn’t guessing anymore. I knew exactly what I needed to charge in order to be profitable.

00;15;30;16 – 00;15;56;16
Rebecca Hay
I knew what the project minimum needed to be to sustain the team that I had. And structure can give you freedom. Having solid pricing systems and boundaries actually freed me up to do better work. I wasn’t constantly stressed about money or resentful about working for free. The reality is, it’s not about being the cheapest. And I think we know this inherently, but there’s this fear to raise our prices.

00;15;56;18 – 00;16;20;24
Rebecca Hay
But it is about being the right choice for your client. You’re not the cheapest choice, but you’re the right fit for them. The right clients will pay you for quality, expertise, and peace of mind. The wrong clients, however, will always try to negotiate you down no matter what you charge. That is called a red flag. I know I talk about that a lot.

00;16;20;25 – 00;16;45;00
Rebecca Hay
Okay, so here is what this means. If this is heading home for you, I want you to know that struggling with pricing doesn’t make you bad at business. It honestly just makes you human, like me. Most of us were not taught how to price our services in school. Some of us didn’t even go to design school. And let’s be honest, talking about money can actually just feel uncomfortable for so many of us.

00;16;45;07 – 00;17;08;14
Rebecca Hay
But here’s the thing under charging isn’t just hurting your bank account. It’s hurting your confidence. It’s attracting the wrong clients to you, and it’s preventing you from doing your best work. When you’re constantly stressed about money, it shows up in everything you do. It shows up in your creativity, not giving yourself the time to really step outside the box.

00;17;08;14 – 00;17;30;02
Rebecca Hay
Really push the boundaries. Maybe go to one extra fabric store. It’s also showing up in your client relationships. They could be strained. You could be working with the world’s greatest. You know what I mean? I don’t know, I was I didn’t want to swear I’d struggled there. Guys. Sorry about that. And it’s going to show up in your team morale if you’re constantly stressed about pricing and money.

00;17;30;03 – 00;17;48;24
Rebecca Hay
I have been there. Nobody wants to work for an owner that’s constantly talking about how we need to make money. We’re not making enough. You deserve to be paid well for your expertise. You deserve clients who respect your time and value your input and you definitely deserve to run a profitable business that supports the life that you want to live.

00;17;49;01 – 00;18;14;17
Rebecca Hay
So speaking of pricing with confidence, I’m hosting a free workshop. It is called Priced to Profit. It’s the Interior designers framework for profitable pricing. And this workshop exists because I wish someone handed me this exact playbook when I was struggling, when I was struggling with all these pricing mistakes. And I’m going to share inside that workshop. The three strategic pricing shifts that helped me doubled my design fees.

00;18;14;20 – 00;18;48;26
Rebecca Hay
The same shifts that you can use to raise your rates without freaking out about clients ghosting you, or pushing back in just 60 minutes. You’re going to learn the psychology behind how clients perceive value, because pricing isn’t just about numbers. It’s also about positioning yourself as the expert that they trust. I’m going to give you inside this workshop, a simple framework that you can use to help you choose the right pricing model for your business, whether it’s flat fee, it’s hourly, or hybrid.

00;18;48;27 – 00;19;11;27
Rebecca Hay
There really is no one size fits all. Sorry. I know you wish there was. This is the real world practical stuff that actually works. Not theory, but it’s also the exact strategies that I see top earning design firms using every day. You guys can go check it out and register for free at Rebecca. Com forward slash profit.

00;19;11;29 – 00;19;36;10
Rebecca Hay
That’s Rebecca hay.com/profit. And here’s what I want you to remember from today. Every successful designer has made pricing mistakes. The difference is learning from them like I did. But maybe faster than I did. And making changes before they become patterns. Keep you stuck. So if you’re under charging right now, you’re not alone. You don’t have to stay there.

00;19;36;10 – 00;19;55;28
Rebecca Hay
Please. I don’t want you to stay there. The confidence that you’re looking for comes from having systems in your business, the right mindset, and the right support. So I hope to see you inside my workshop. And until then, keep designing the business and the life that you love. One more thing I think that you are going to enjoy.

00;19;56;01 – 00;20;19;06
Rebecca Hay
Episode number 179. It’s where I talk about pricing your services with confidence. It’s a great episode that will compliment this one that you just listened to, but also there’s a great conversation that I have on episode 46. It’s called budgeting pricing Your Services and Attracting the Right Trades with Mayor Rafi. It’s a great conversation between designers where you can hear different perspectives on pricing.

00;20;19;07 – 00;20;33;02
Rebecca Hay
That’s episode 46. And then also go check out episode 179. Okay. That’s it. See you soon!