Thinking about starting up your own interior design business, but no idea how many interior design startup costs to expect? You’ve come to the right place. Here, we discuss how much it costs to start an interior design business, from the various business licenses that are a requirement, to other elements that are optional, giving you a clear picture of the road ahead, with no unwanted surprises.
Look out for our nifty saving tips on keeping startup costs down, as well as our useful hints on finding the best business management software that will set your business up for success from the outset.
Interior Design Startup Costs
The least you’ll spend on setting up an interior design business is $500, which will cover your essential insurance costs only. Alternatively, you can spend a few thousand dollars, which will cover things like website design, business cards, a lawyer, and an invaluable business management platform.
The next section breaks down the interior design startup costs for the different elements that are either essential or optional.
Interior Design Business Document Costs & Savings Tips
- DBA or Business License - First thing to note is that every state has different licensing laws, so check your state's requirements first. If you’re planning on operating a business under a different name other than your legal one, you may need to file a DBA document (Doing Business As) depending on which state you’re in. Registering a DBA can cost anything between $10 - $100 depending on paperwork and filing fees.
Money-saving tip: Your business name should reflect your service, so we recommend using your legal name as your brand, thus saving a DBA fee altogether.
- State licensure fees - For states that require interior designers to become licensed, including Nevada, Alabama and Florida, the most commonly recognized license you can obtain is the National Council for Interior Design Qualification (NCIDQ) license from the Council of Interior Design Qualification (CIDQ), which will cost under $2,000 for the application and exam fees.
Money-saving tip: If you’re planning to take the NCIDQ, plan your time so you can apply for all three exams in one go and only incur a one-time application fee of $225. If you apply for the other exams separately, the application fee will cost you $240. For more information around the NCIDQ, take a look at our article on How Much Does it Cost to Become an Interior Designer.
- Entity fees - There are various types of legal structures you can choose for your business depending on what suits your set up, with the cost to do so ranging from $300 - $1000. Sole proprietorship tends to be the most common for small interior design businesses, allowing the owner to take full responsibility of the company, as well as its debts. While you don’t have to pay any fees to become a sole proprietor, if you don’t have a legal entity set up, your personal assets could be at risk.
Another common type of entity is a LLC (Limited Liability Company), which aims to protect business owner’s personal assets against the company’s liabilities. Setting up a legal entity can be a minefield, so to avoid any costly mistakes, seek expert advice from an account or registered agent who can help you select the right entity for your company. Jolene Irons, Interior Designer at Cedar & Fig in Renton, WA, explains how hiring a registered agent was a surprise cost she hadn’t factored in. “I had no idea what a registered agent was until I set up my LLC. Basically, they act on our behalf; they cut communications. It gives you a buffer. If there’s any legal action, it goes to them versus coming directly to your home. I was shocked at how much that was per year, but it’s really something that you want.”