The Interior Designer’s Guide to Navigating Construction Costs with Clients
One of the questions interior designers ask us all the time is, “How should I help my client budget for their construction project?”
At Dakota Design Company, we're all about knowing your numbers and ensuring your clients have a full understanding of what their project will actually cost.
Because let’s be real, there’s nothing worse than starting a project thinking it’ll be $40K, only to find out you’re actually looking at $150K by the time everything's done.
No one wants to get hit with a surprise like that.
So, let’s dive into this: How do you help your clients budget for projects with construction?
The short answer?
Cost-estimating and establishing a budget for a project that involves construction is primarily the general contractor’s responsibility—not the interior designer’s.
General contractors have detailed knowledge of construction processes and sequencing, material and equipment properties and installation, and building codes. Most states require general contractors to be licensed, which often necessitates several years of experience in the construction industry before qualifying to take a general contractor’s licensing exam. And preparing cost estimates is often part of that experience and training.
With their building knowledge, general contractors understand the intricacies of residential construction: if we move THIS, then we also have to fix THAT.
They can avoid a scenario such as closing up a wall in a bathroom project and tiling it, only to remember that electrical wiring needs to be run to provide an outlet near the sink, as mandated by code. So they make sure electrical work is completed before drywall and finish work. They may understand that it may not be possible to determine the extent of needed plumbing rerouting until wall demolition is completed and all plumbing lines are exposed. And they will account for that work sequencing in their cost estimate.
In addition, they rely on input from subcontractors, tradespeople, vendors, and suppliers to provide additional cost data. And they are used to communicating with city building departments about permits, permitting fees, and inspections. Drawing from all relevant sources helps contractors to compile a comprehensive cost estimate.
Contractors who have worked on home construction projects for many years will have historical data to draw from—what components of similar previous projects have cost—to help compile comprehensive labor and material cost estimates.
When sufficient field data is not available, contractors often use purchased construction cost data. One commonly used source of construction cost data is RSMeans, which supplies cost data in various formats—cost books, estimating software, and costing training seminars—to enable contractors to produce reliable estimates and budgets.
A reliable cost estimate will include:
Both the cost of materials and the cost of installation labor
Allowances—estimated cost placeholders for items not yet selected
Appropriate material overages to allow for waste and cutting errors
The cost of shipping, storage, and delivery
Applicable sales tax
The cost of extended warranties, if needed
The contractor’s overhead and profit
But even the most experienced cost estimators will not be able to accurately predict influences from market volatility, supply-chain issues, and government-mandated tariffs. Cost estimating is a complex task, and it is important for your clients to understand that—under most contractors’ contracts—they are responsible for the actual costs of labor and materials, not the budgeted costs.
Yes, experienced interior designers make very similar efforts to produce furniture and finish material estimates for clients. So, YES, they are very familiar with budgeting. And after years of experience, interior designers become very familiar with construction project costs. Experienced interior designers can weigh in with conceptual cost estimates when first discussing a project scope with a client.
But when it comes to detailed construction materials and construction labor costs, it is fine to admit that this is not wholly in your domain.
So, how do you handle it when you’re discussing a potential remodel in a client’s home, and—based on your spatial expertise—you recognize that the best solution may involve moving walls and/or plumbing and electrical and installing new finishes?
Naturally, your client will likely ask, “How much do you think that will cost?”
Of course, you WANT to look like an informed source. You WANT to make sure your client has the appropriate budget to do the work AND hire you .
But, unless you are a general contractor, the most you can do is provide a response letting them know what similar projects you’ve completed have cost OR what projects in your portfolio generally cost.
You’ll want to let clients know that in order to have an accurate and comprehensive budget for this scope, we’ll want a general contractor to provide an estimate based on the full scope and implications.
This approach positions you as knowledgeable while acknowledging that construction cost estimating isn’t your primary role. And it sets you up to continue guiding the project without the pressure of being the one responsible for the construction budget.
So by all means, educate your client about how you can provide value, not only in the design phase, but also during construction, and troubleshoot issues and ensure flawless execution of the design.
But, unless you possess extensive construction management and costing experience, it is best for construction project budgeting and estimating to be done by experienced contractors. The value of a construction project budget is in how accurately and reliably it predicts what actual costs will end up being. So, with budget accuracy being the goal, it is recommended that the construction cost budget be prepared by a construction process expert.
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