Ep 220: Why Your Construction Projects Aren’t Profitable

Construction projects often look like the most profitable work in an interior design business—but behind the scenes, they’re where many designers are the most underpaid.

In this episode, Michelle breaks down the hidden disconnect between what designers charge and what construction projects actually require. From the constant decision-making to the mental load that never turns off, she reveals why traditional pricing models fall short—and what needs to shift.

If you’ve ever felt busy, overwhelmed, or undercompensated during a renovation or new build, this episode will help you understand why—and what to do about it.

What You’ll Learn

• Why construction projects feel profitable—but often aren’t

• The hidden responsibilities designers take on during construction

• The difference between renovation (reactive) vs. new build (proactive) projects

• Where pricing structures typically break down

• The real cost of underpricing construction administration

• How “emotional pricing” quietly hurts your business

• Why raising your prices alone won’t fix the problem

• What it actually means to align your pricing with your role

Key Takeaways

Construction projects don’t just scale in size—they scale in responsibility.
As the project grows, so does your mental load, decision-making, and ongoing involvement.

Renovations and new builds are not the same.

• Renovations = reactive, unpredictable, fast decision-making

• New builds = proactive, structured, vision-driven

You’re not just designing—you’re leading.
During construction, you become the interpreter, problem-solver, and decision-maker for everyone involved.

Flat fees often fail mid-project.
What felt like a solid number at the beginning rarely reflects the true scope as the project evolves.

Construction administration is not a “small add-on.”
It’s a major, time-consuming, high-responsibility phase that deserves its own pricing structure.

If your structure is broken, raising prices won’t fix it.
You’ll just charge more for the same exhausting experience.

Common Pricing Mistakes

• Pricing based on initial scope without accounting for project evolution

• Underestimating time, interruptions, and mental energy

• Including construction administration inside the design fee

• Making pricing decisions based on what feels “comfortable”

• Keeping fees fixed even as responsibilities expand

Mindset Shift

Stop asking: “What feels fair?”

Start asking: “What does this role actually require of me?”

Because strong pricing isn’t about feelings—it’s about alignment between your responsibility and your compensation.

What to Do Instead

• Separate design and construction phases clearly

• Define and charge for construction administration

• Build structure and boundaries into your process

• Track your time and analyze where your effort is going

• Price based on responsibility—not just deliverables

Final Thought

Construction projects aren’t just bigger—they’re heavier.
And when your pricing finally reflects that, everything changes: your profitability, your energy, and your life outside the business.

What’s Next

Next week’s episode dives into furnishings and decorating pricing—and where designers are leaving even more money on the table.

Share the Episode

Know a designer who’s deep in construction projects and feeling stretched thin? Share this episode with them—it might be exactly what they need to hear.

Resources Mentioned

Design Revenue Audit
A diagnostic deep dive into the financial structure of your design firm, including pricing, procurement, and operational profitability.

90-Day Advisory
Private strategic advisory focused on restructuring the revenue side of your design business.

VIP Intensive
A focused strategy session designed to map out the most efficient path toward a more profitable firm.

Learn more at:
TheDesignBakehouse.com


Transcript:

Hello, my friends, and welcome back to Design for the Creative Mind, the podcast where we talk about the business side of interior design. Not just the pretty side, not just the reveal photos, but what it actually takes to run a design firm that works. Because the truth is, you can have incredible projects, beautiful homes, amazing clients, and still feel like something about the business isn't adding up.

And if you've been listening over the past few weeks, you know we've been pulling that apart layer by layer. We talked about the money that quietly leaks inside your design process. We talked about why so many designers feel busy, but not profitable. We talked about client red flags. We talked about the missing system between inquiry and contract. And today we're talking about something else that sits underneath all of that, pricing. Okay, but we're not talking about generic pricing.

Today we're talking about construction pricing. We're gonna talk a little bit about renovation. We're gonna talk a little bit about new build. And then next week we will be talking about furnishings and the decorating pricing. But construction pricing, this is where I see some of the biggest disconnects in design firms. And it's tricky because from the outside these projects look like the ones that should be the most profitable. They're big budgets, they're larger homes, it's more complex work.

It looks like growth, right? It looks like success. But what I've seen both in my own design firm and working with designers is that construction projects are often the place where we are the most underpaid. And it's not because designers aren't talented. It's not because they're not working hard, but because pricing doesn't actually reflect what the project requires from them.

Now, there's something about construction projects. It feels like a step up. Like, I remember this very clearly when ML Interiors Group started moving into more renovation work and these larger scale projects. And there's a moment when you think, okay, this is it. This is the level that I've been working towards because the budgets are bigger, the scope is bigger, the visibility is bigger, the transformation is

DFCM (02:30.226)

bigger and it feels like you reached a new tier in your business. And in many ways you have, but what I didn't fully understand at the time, okay, is that the project is that what I didn't fully understand at the time is that construction projects don't just scale in size. They scale in responsibility. They scale in the mental load.

and they scale in the amount of you that they require. So there was this one project in particular where everything looked amazing on paper. Like the budget was strong, the scope, it was so exciting. The client was great. And I remember thinking, this is gonna be such a good project. And it was. But what I didn't anticipate was how much of my time

and honestly how much of my brain it would take up. Because y'all, once construction starts, like the project becomes like this beast. It's completely something different. You're not just designing anymore. You're interpreting, you're clarifying, you're guiding, and you're answering these questions that nobody else can answer. And they don't come in like these neat little scheduled blocks, right? They come when they come.

They come when the contractor needs your answers. So you are being constantly pulled back into this project. Like you've designed it, you've handed over, you've created the construction documents. That's not the end of it. Okay.

And this is where the pricing disconnect starts to happen because the project looks profitable, but you're midway through it you're like, this doesn't feel profitable. So let's talk about what you're actually doing during this construction project, because this is where I have found that the gap really shows up because on paper you're charging for the design, right? The selections and the planning, maybe the construction documents, but

DFCM (04:40.832)

In reality, your role expands far beyond that. You are reviewing the plans, okay? You're answering contractor questions. You're clarifying design intent. And then sometimes you're actually adjusting the selections if maybe something's out of stock or budget has shifted. You're coordinating with vendors. You're not, let's just clarify that

Hopefully you're not general contracting. Okay, because that's a completely different episode. But you are managing communication with the client. And here's the thing, like all of this is you're troubleshooting issues as they come up.

DFCM (05:27.69)

And then there's the part that doesn't show up anywhere, but like that little project is living in the back of your head. You're thinking about it constantly, right?

DFCM (05:39.756)

Back, so I don't, if you've been around for any length of time, y'all know that I am not the principal designer at my own firm, okay? Because first of all, I hire people smarter than me, but there have been nights when I was designing that I closed my laptop, okay? I'm technically done working, but I'm sitting at home and the project is still living in my head, okay? Replaying a conversation, thinking through a detail.

anticipating a decision that's going to come up the next day. And I remember sitting at dinner one night with my husband and he's talking about his day or whatever. I don't even know because I was listening, but I wasn't fully there. Okay. Because my brain is still on the job. Like if my brain had a hard hat, it was still on the job site. Okay.

So that's when it hit me. It's like, this isn't just work during work hours. This is an ongoing responsibility. So this is the part that most designers are not pricing for. It's not necessarily the time, okay, but it's the responsibility. So I want to pause for just a second because not as we know this, not all construction projects are the same because we tend to group them together.

So what I'm talking about right now are renovations, okay? Oftentimes, renovations and new builds tend to get grouped together. They're very different experiences. So let's take this little sidebar and talk about renovations because they're reactive. New builds are proactive. That makes sense? When you step into a renovation, you're stepping into something that already exists.

which means there are things that you cannot see or plan for. You know, those things behind the walls, things that were done years ago, and maybe they just weren't quite done correctly. Okay, so no matter how experienced you are, something's gonna come up.

DFCM (07:48.15)

At ML Interiors Group, we've had projects where everything feels dialed in. Plans were set, selections were made.

client was a delight, they were making decisions on time, like all the things were going smooth. And then something gets opened up. Okay. And then like the whole project shifts and we're having a completely different conversation than we were planning to have. Right. So we're, so we're reworking something in real time, exploring options with the client while the contractor is standing there waiting. Okay. Can you relate to that?

Because these moments don't show up in your original scope of work document. They don't show up in your pricing, but they show up in your time and your energy and your responsibility. Because you can't just say, oops, that wasn't included and walk away. And then of course the timeline doesn't slow down to accommodate you. Okay, the contractor isn't saying, just take a couple of days and think about it. They're like tapping on their watch saying, y'all, we need direction, chop chop.

Now. So you're there and you're responding quickly and sometimes it's repeatedly. So those renovations are reactive. New builds, they're different, right? They're still complex, but they're more structured because you're working from a clean step, a clean slate. Decisions are made earlier. You're building something rather than uncovering something.

DFCM (09:27.308)

Right? And the emotional energy, well that's different. Renovations are disruptive. Your clients are living through it. You know they're living through it. If you've ever lived through your own renovation, you know how difficult it can be. So there's stress and there's noise and there's uncertainty.

Your new builds are more about that possibility, the vision, like the creation literally from the ground up. So your role is different. In renovations, you're a problem solver. In new builds, you're more of a guide, right? So in renovations, can be the visionary and the guide as you're doing the design. But as soon as the renovation starts, it's wheels off. It's like the Wild West

So these two experiences, they require different levels of you. And circling back to the point of this episode is that your pricing should reflect that.

DFCM (10:40.446)

when you do have your pricing where I've seen and where I've experienced and learned from it where pricing really starts to break down

is that it happens gradually and of course it's not intentional.

But the first place that I see it, or the first, actually the first place I've experienced it, let's be real about it. The first place I experienced it, and I've also seen it in other designers after that, is that the flat fees don't necessarily scale for the entire project. Okay, so if you price the project based on what you think it will require, or what I teach is by the square foot, okay, that's fine.

because the number probably makes sense for the design. But the project evolves, and then you have to make more decisions and more coordination and more site visits, more time. And if your fee stays exactly the same.

DFCM (11:46.03)

I can tell you where I was standing. The project was on Tulip here in the Dallas-Fort Worth area. was technically in the Preston Hollow area. And I remember mid-project, was standing in the middle of this renovation and I had this realization thinking, if I were pricing this today, knowing what I know now, this would be a completely different number. Okay?

Like, holy crap, this is a lot more work than I thought it was. But you don't get to reprice your project midstream. So here I was just carrying along thinking, okay, this is better going to be good for my portfolio. Okay. So the second mistake I see is underestimating how much time it's going to take. It's not just the hours, right? I was telling Juliana, my senior designer here at ML Interiors Group the other day, that oftentimes,

We over anticipate how much we can get done in a day and we under anticipate or underestimate. So we over anticipate what we can get done in a day and we underestimate what we can get done in a full year. So we're underestimating our time and it's not just the hours but again going back to like the mental energy that it takes. The attention, the interruptions, mental energy, switching different thoughts back and forth. Because construction projects don't respect your calendar, right? They interrupt it.

DFCM (13:35.222)

What I mean by that is like you're in the middle of something, right? So you're in the middle of another project. Maybe you're in the middle of cooking dinner and suddenly you're pulled into a decision that requires your full brain. So you have to switch back from maybe this decorating project that's really freely, you know, what's it called these days? Cottage core, grandma core, okay? And then you have to switch your head back over into the construction brain.

And then you have to go back to whatever you doing before. Y'all, that's exhausting, right? Or again, maybe you just sit at home making dinner and then all of a sudden you get this phone call from a contractor who's calling that needs, that you need to make a decision or they're FaceTiming you and saying, what should I do here?

DFCM (14:25.922)

The third thing that I've seen, and again, I've done all of these, y'all. This is how I came to be a coach. It was like, as soon as I figured this stuff out, I'm gonna share it with other people. So you don't have to go through it as well. So the third mistake is under pricing construction administration. Y'all, do you have pricing for construction administration? I didn't for the longest time. Okay, and this is huge.

I was treating it like something small or what I was doing is I was including it in my design fee. But when you look at how much of your time is spent during construction, it's breaking significant. So here at ML Interiors Group, even though I charge by the square foot, my team is still tracking their hours. And when I started analyzing the data, it's like, okay, so here's what we did during the design. Hey, that was pretty profitable.

But then, you know.

Unexpected things come up and you have to run out to the project site.

DFCM (15:34.412)

Because there's seasons in your business where you are constantly on call for these construction projects and it's not structured. Again, it's not proactive, it's a very reactive.

service that we're providing. Renovation is reactive.

So over time I realized, was like, holy crap, this is not a small add-on. This is not included in the design. This is a major part of the work.

DFCM (16:10.752)

And let's let's not forget about emotional pricing. OK, pricing based on what feels and I'm doing air quotes here if you're listening just audio air quotes pricing on what feels comfortable. What you think the client will say yes to.

DFCM (16:31.246)

y'all, I've been there where you know what that number should be, but you soften it. You tell yourself a story. This is going to be a good project. It's going to help my portfolio. They said they're going to give me referrals, so it'll lead to one more. I want the experience. Like, does any of that sound familiar? Okay, because none of it feels irrational, but those decisions compound.

And over time, the business reflects not what's accurate, but what felt, here we go, air quotes, comfortable. And this is where the identity shift comes in, because construction projects require a different version of you.

DFCM (17:20.48)

You're not just helping with selections. You are leading this process and influencing decisions that affects how a home functions, feels, and lives. It's a large investment.

huge investment. And when you really sit with that, like I want you to think about this, when you really sit with that, you start to see your role differently.

So I'm hoping that as you're listening to this, your mental view of this role is shifting and that your pricing is going to shift because you should stop asking what feels fair and instead ask, what does this role require? Like fair, what do mean fair? You have to show up and give your all for this.

So strong pricing is not about alignment, okay?

It's between what the project requires and how you are compensated.

DFCM (18:28.62)

So separating your phases, defining your scope, okay? Your compensation accounts for that ongoing involvement. Because if you are involved in administering the design that you created, you should still be compensated.

DFCM (18:54.614)

Raising your prices alone like your design fee will not fix this.

If your structure is unclear, if your process is reactive and if your boundaries are loose, you're just charging more for the same experience.
I was, I was talking to a potential one-on-one coaching client just yesterday.

And her clients aren't suffering, but she is. So it's not a pricing conversation, it's a structure conversation.

She's exhausted. Okay? So this is exactly what we look like inside my VIP intensives or my 90 day advisory one-on-one coaching programs. We're not just looking at the numbers, but let's look at the whole picture. Like where is your time going? Where your involvement is expanding and where the business is maybe not just asking more from you, but it's demanding more from you than it should.

DFCM (20:03.992)

Because most of the time the issue is an effort. I know y'all. I know every single one of you who are listening right now. You're out there busting your booties. Okay, because the issue isn't effort, it's alignment.

DFCM (20:18.83)

So construction projects are not just bigger. They're heavier. They require more from you. You have to make more decisions. You have more responsibility. You're not just handing the design over and walking away. You have more presence. And your pricing, it needs to reflect it. Because y'all, when it does, like everything changes. The work feels different. You're not going to be resentful.

Okay, the business feels different because you're feeling more like a business person than a designer who's running around ragged.

And then what happens from there is that your life outside of the business feels different too. Like I actually listen to my husband now and I hear him. Okay, my mind isn't on a construction site.

Next week, y'all, we're going to be talking about furnishings and decorating, like some of the softer, fluffier stuff and pricing for that, because this is, mean, we're, designers are leaving even more money on the table when it comes to these projects and not even realizing it.

So if you enjoyed today's topic, today's episode, share it with a friend, share it with somebody you know is being run ragged, doing the construction work, renovations specifically, new builds as well. It doesn't matter. You just need to have a structured process because every project is different, but the process should be the same.