The 3 Revenue Streams of Interior Design
Successful interior studios in India run on 3 complementary revenue sources: Design Fees (charged per sqft or as a project percentage), Material Markup (the difference between vendor price and what the client pays), and Labour Coordination Fees (a management fee for overseeing contractors).
GST Impact on Profitability
Remember: GST you collect (18%) is NOT your revenue. It is a liability payable to the government. Studios often mistake turnover for profit. Always calculate margins on pre-GST revenue figures to get accurate profitability data.
What is a healthy profit margin for an interior design studio?
For a mid-sized interior studio in India, a gross margin of 25-35% is healthy. Net margin (after overhead, GST, and staff salary) of 15-22% is considered excellent. Below 10% net margin signals pricing needs revision.
Should I add a markup on materials?
Yes. Most interior designers in India add a 10-20% markup on materials they procure on behalf of the client. This compensates for the effort of vendor coordination, quality assurance, and delayed payments from material suppliers.