Feasibility Study for a Finishing and Interior Design Company in Egypt

How a finishing and interior design company makes money, and where it loses it

A small finishing and interior design company in Egypt works mostly for private clients and business owners: an apartment, a villa, an office or a shop. It earns from interior design fees and from the execution margin, the difference between the client's price and what it pays the trades and subcontractors (plumbing, electrical, carpentry, painting) and the materials suppliers. Each job is short, but its margin can disappear with a single decision by the client.

The problem is timing, not the margin: materials are bought for cash before they are installed, the trades are paid weekly, and the client pays in stages after seeing the work. So a finishing and interior design feasibility study starts from specific questions: when each payment falls due compared with the big material purchases, what happens to your margin if prices or waste go up on a fixed price, how you price extras, and what you lose if the client stops.

The contract with the client: fixed price, extras and stopping

A finishing contract is a works contract (muqawala) in the sense of Article 646 of the Civil Code, and these are the provisions that bear on the numbers in your study¹:

• When payment is due: payment is due on delivery of the work, unless custom or agreement provides otherwise (Article 656). In other words, an advance and stage payments are not assumed: write them into the contract.
• Fixed lump-sum price: if the contract is for a lump sum based on a design the client agreed, the contractor may not ask for any increase even if the design is modified or added to, unless this is due to the client's fault or the client authorised it and agreed the fee for it; that agreement must be in writing unless the original contract itself was oral. Nor may the contractor ask for an increase because material prices or wages rose, even if performance becomes difficult, unless the contract's economic balance collapses because of general exceptional events that were not foreseen at the time of contracting, in which case the judge may increase the price or terminate the contract (Article 658).
• Unit-rate pricing: if the contract is based on unit rates and it becomes clear during the work that the design requires a noticeable overrun of the estimate, the contractor must notify the client immediately of the expected increase, or lose the right to recover the excess; if the overrun is serious, the client may withdraw without delay, paying for the work done but not for lost profit (Article 657). So state clearly in the contract whether the price is a lump sum or a rate per square metre on measured quantities.
• Design: the architect is entitled to a separate fee for preparing the design and the estimate and another for managing the works, set by custom if the contract does not fix it (Article 660). The text does not name interior designers, so write the design fee into the contract as a separate item.
• The client stopping the work: the client may withdraw from the contract at any time before completion, provided it compensates the contractor for its expenses, the work done and what it could have earned by finishing; the court may reduce the compensation for lost profit, and must deduct what the contractor saved and what it earned by using its time on other work (Article 663).

On tax, contracting and construction services, meaning supply-and-installation contracts, moved from a 5% schedule tax to the 14% general VAT rate with input-tax recovery from 18 July 2025², and the mandatory VAT registration threshold is EGP 500,000³, which a single apartment like the one below exceeds. If your contract is treated as a contracting contract, quote your price before VAT: in the example the client pays 1,200,000 × 1.14 = 1,368,000. If you write EGP 1,200,000 "including VAT", your net revenue falls to EGP 1,052,632, a loss of EGP 147,368 or 61.4% of the job's margin. When VAT falls due and how ongoing contracts are treated is covered on the general contracting company feasibility study page; check your activity's classification with your accountant.

Illustrative example: finishing a 150 m² apartment in 16 weeks

Assumed figures, not market prices, all before VAT; the price per square metre varies widely by area and materials level, so use real quotes in your own study:

• Price: full mid-level finishing, excluding furniture and kitchen, at EGP 8,000 per m² (an assumption), i.e. 150 × 8,000 = 1,200,000, as a fixed lump sum.
• Direct cost: EGP 960,000 (80% of the price): materials and supplied items EGP 627,000, paid in cash on purchase, and trades, subcontractors, transport and debris removal EGP 333,000. The margin is EGP 240,000, or 20%.
• Cost schedule in EGP: plumbing and electrical first fix 120,000 (80,000 in week 1 and 20,000 in each of weeks 2 and 3); plastering 80,000 (48,000 in week 3 and 16,000 in each of weeks 4 and 5); ceramic and porcelain tiling 240,000: tiles of 180,000 bought in week 4 and laying at 15,000 a week in weeks 6 to 9; gypsum board ceilings 90,000 (60,000 in week 6 and 15,000 in each of weeks 7 and 8); carpentry and aluminium 160,000, half as a deposit in week 6 and the rest on installation in week 13; painting 110,000 (60,000 in week 9 and 10,000 a week to week 14); sanitary ware and lighting 120,000: items of 100,000 bought in week 12 and installation of 10,000 in each of weeks 14 and 15; transport, debris and cleaning 2,500 a week for 16 weeks.
• Client payments: 20% on signing, 25% after first fix and plastering are accepted (paid in week 6), 25% after tiling and ceilings (week 10), 20% after carpentry and painting (week 15), and 10% after handover and the snag list (week 17).
• Design: a separate fee of EGP 300 per m², i.e. EGP 45,000, with a direct cost of EGP 12,000 for 3D renders from a freelance designer, so it contributes EGP 33,000.

• The gap: you finance EGP 152,500 out of your own money twice, in weeks 5 and 9, and the balance is negative in 8 of the 16 execution weeks. The gap is 12.7% of the price and 63.5% of the margin, because big material purchases come before the payment that covers them.
• Profit: it is complete only with the handover payment in week 17: EGP 240,000 from execution and EGP 33,000 from design.

What if the second payment is late or materials go up?

A four-week delay in the second payment does not change the profit, but it roughly triples the gap to EGP 452,500, or 37.7% of the contract. A 10% rise in materials on a fixed price takes EGP 62,700, or 26.1% of the profit, because materials are 65.3% of the direct cost, and it deepens the gap to EGP 197,200 because EGP 447,000 of them are bought by week 9. Such a rise is realistic: according to CAPMAS data, prices for maintenance and repair of the dwelling rose 11.6% in September 2026 compared with September 2025, and 0.9% in September alone⁴. The average price of a 50 kg bag of ordinary Portland cement rose from EGP 198.6 to EGP 215.9 between June 2025 and June 2026⁵. Waste works the same way: an extra 5% of the tile quantity for breakage or cutting you did not allow for takes EGP 9,000 off the profit, and a new production batch may not match the same shade.

The strongest tool is the timing of payments, not their size: making payments fall due before the tiles, sanitary ware and carpentry balance are bought cuts the gap from EGP 152,500 to EGP 75,000 at the same price. You protect the materials price with a written validity period on your quote, by buying early, which deepens the gap unless a payment comes first, or by having the client buy some items directly: Article 647 allows the client to supply the materials while the contractor supplies only the work, and you must then account to the client for what you used, return what is left, and bear the value of anything spoiled through your negligence (Article 649)¹.

Extras: at cost or with a margin?

In week 8 the client asks for better porcelain in the reception and concealed ceiling lighting, costing EGP 60,000: materials of EGP 40,000 in week 8 and labour of EGP 10,000 in each of weeks 9 and 10.

Pricing at cost protects the paper profit, but it is work with no margin to cover design and supervision, and you finance it until handover. Cost + 25% gives a 20% margin on the extra's price, the same as the original contract, and the half advance makes the extra almost self-financing. Building a price from cost is covered in how to price your product.

If the client stops halfway

If the client stops after week 9 without paying the third instalment, you have collected EGP 540,000 and paid EGP 692,500 (72.1% of the direct cost), including an EGP 80,000 carpentry deposit on doors made to the apartment's measurements, so you have financed EGP 152,500 out of your own money. Article 663 gives you a right to compensation¹, but a claim takes time and the court may reduce the lost profit. On the adjusted schedule, where each payment comes before the purchase it covers, you never finance more than EGP 75,000 in any week.

Fixed costs and how many apartments you need a year

In the example: an interior designer at EGP 20,000 a month and a site engineer at EGP 18,000 (both assumptions), plus an administrator and a purchasing rep on the private-sector minimum wage of EGP 7,000, in force from 1 March 2025⁶, with the employer's 18.75% social-insurance share⁷, EGP 16,625 for both; office and showroom rent of EGP 15,000, marketing and project photography of EGP 12,000, an accountant at EGP 4,000 and other expenses of EGP 6,000. That is EGP 91,625 a month, or EGP 1,099,500 a year.

• Each apartment like the example contributes EGP 273,000, so you need about 4.03 apartments a year just to cover fixed costs.
• With six apartments a year (two at a time), EGP 538,500 is left before tax. With a 10% rise in materials on every job, only EGP 162,300 is left.
• If every job runs 4 weeks longer because the trades are late, you complete about 5 apartments a year instead of 6, and profit falls to EGP 265,500 without any rise in costs.
• If you deduct the design fee from the execution price to win the client, the contribution falls to EGP 228,000 and the apartments needed rise to 4.82.
• Two apartments starting together on the same schedule need EGP 305,000; starting the second 8 weeks later cuts that to EGP 235,000.

The method is in our article on break-even and working capital.

Common mistakes in a finishing and interior design feasibility study

1. Calculating profit from the price per square metre without a weekly table linking each payment to the big purchase it covers.
2. Calculating material quantities with no waste allowance for tiles, porcelain and gypsum board.
3. Pricing materials at site-visit prices with no validity period on the quote.
4. Doing extras on a verbal request, although in a lump-sum contract the law requires their fee to be agreed in writing.
5. Quoting an "all-inclusive" price without working out the VAT.
6. Waiving the design fee without calculating its effect on the number of apartments you need.
7. No scenario for the client stopping after you have bought items made to measure.

To build the table, see cash flow for small businesses. Buying units, finishing them and selling them on your own account is a different study: a property development feasibility study.

Frequently asked questions about a finishing and interior design feasibility study

Sources

1. WIPO Lex. القانون المدني الصادر بالقانون رقم 131 لسنة 1948 (نص مجمّع حتى القانون رقم 55 لسنة 1970)، المواد 646 إلى 663 (عقد المقاولة) (in Arabic). Checked 22 October 2026.
2. EY. Egypt introduces significant VAT updates on certain goods and services (2025-07-22) — secondary source; Deloitte Middle East. Construction contracting activities treatment following the VAT law amendments (2025-10-28) — secondary source. Checked 22 October 2026.
3. Egyptian Tax Authority. ما هو حد التسجيل الإلزامي لضريبة القيمة المضافة، وما هي الأنشطة المعفاة منها؟ (in Arabic). Checked 22 October 2026.
4. Al Mal News. الإحصاء: التضخم في مصر يرتفع 1.5% خلال سبتمبر 2026 بدعم من قفزة أسعار الخضروات (in Arabic) (2026-10-10) — secondary source. Checked 22 October 2026.
5. Al Mal News. «الإحصاء»: أسعار الأسمنت ترتفع حتى 12.1% والأسمدة تصل إلى 56.6% خلال عام (in Arabic) (2026-08-16) — secondary source. Checked 22 October 2026.
6. Ministry of Planning and Economic Development. الاجتماع الأول للمجلس القومي للأجور: رفع الحد الأدنى لأجور القطاع الخاص إلى 7000 جنيه (in Arabic) (2025-02-09). Checked 22 October 2026.
7. Andersen Egypt. Social insurance in Egypt (contribution rates under Law 148/2019) (2026-06-30) — secondary source. Checked 22 October 2026.