Why This Vermont Designer Never Negotiates Her Markup

Original article posted at Business of Home by Kaitlin Petersen.

How did you get your business off the ground?

That weekend, I got a phone call from a real estate office that had a client wanting to meet. I said, “Well, I just need them to know that I’ve started my own business, so if they want to go with the other firm, that’s fine—and if not, this might be a little bit more complicated because I have no product, no vendors, no computer, no business cards. I have nothing.” They said, “Why don’t you come to meet in person anyway?”

The client was also a business owner, and when we sat down, I was very honest with her. I said, “Listen, I’m not in a financial place to start a business or do a project. I could do it if you would trust me, but I would need all the money upfront, including my profit.” She wrote me a check that day for the full amount of the project, and I ordered a computer and a printer and got business cards and a phone. And so it began that way.

When did you know that the thing you needed was that administrative and bookkeeping support?

Well, it’s something I realized I really don’t like doing. In the first few years of my business, I had four people working for me—two administrative, two design assistants. We were super busy, and financially it was fine, but I was spending a lot of my time managing others and answering their questions, and I did not feel creatively inspired. Then I got divorced, and at the same time went down to having one or two people work for me, and I was much happier. I never want to have that many employees again.

How does that change what you can say yes to?

That’s a really good question and one that I continually try to balance. Being in business for 20 years, we get old clients calling that want little things. I am so grateful that they’re still calling us, but it always feels like I have to do those things because we did the house originally. Sometimes that puts me over the edge, those little bits—those are the things that take me the longest. It’s much easier to do a whole project at once and be done with it!

Right now we have about 12 to 15 projects going on. Some of them are big houses, and some are just a few rooms. And then the small things—we really do call them “bits.” Those small bits are always fine until that table you wanted is discontinued and we have to spend two hours finding a sub—those are the things that put you behind. A client wants this one printed fabric for their bedroom; you go to check it, and there are only two yards left and the mill is dropping it. Then you spend the next week or two trying to find something just like it. It’s not really efficient, but it is part of the industry, unfortunately.

How do you approach billing overall?

We charge an hourly rate for all of my time, whether it’s shopping, meeting, driving to the meeting, installing or correspondence. Correspondence is huge, and we do bill for that time. There are clients who are really efficient at communication, and others that are not. Sometimes you’re over-communicated with. I try to tell everybody in the beginning, “Hey, I cannot receive text messages about design-related questions. Please only use my phone for scheduling or calling.” Otherwise, if you have 10 projects going on, and you have 10 clients texting you all day, it’s too much to track—and sooner or later, they will drive you bananas.

We just send invoices out once a month for all that time; then, if people choose to buy product from us, which most do, we do a wholesale price plus 30 percent.

Do your clients respect that markup?

Some struggle—and if they ask for 25 percent, we just say, “Thanks, but no thanks.” It doesn’t feel fair to have some clients pay 30 percent and others paying 25 percent. That is also sometimes writing on the wall for whether they value what we bring. I don’t feel like I am getting rich on this. I feel like I am creating value, and I make a nice living. I also work very hard. I don’t apologize for that pricing structure. If it doesn’t work for a client, then we just say, “Good luck with your project. Thank you anyway.”