Interior design is an often misunderstood profession. While interior designers are creative artists at heart, they’re also scientists, mathematicians, project managers, and accountants in their professional practice. The spaces they create must not only be beautiful, but functional, safe, and flexible, while executed within strict parameters of time and money. Interior designers assume a great deal of responsibility and legal liability in their work, making it a relatively high-risk and high-stress profession compared to others in the creative field. A successful interior designer is one who can sell their artistic vision and can produce the promised results in an organized process that is seamless to the client’s eye. In order to do this, they must have a thoroughly researched and robustly built system in place for project management, bookkeeping, and business administration. They must also surround themselves with a strong team of professionals, preferably familiar with the complexities of the interior design business model, to support in areas such as legal, accounting, and business consulting. In the words of operations expert, Jennifer La Caze,
“Getting that team put together is all about beginning with the end in mind, and anticipating problems before they arise. You need a good CPA, an insurance expert, a good attorney, and you should establish a letter of agreement for clients so there is a clear method of working together.”
Before deciding to embark on a career in interior design, or to establish an interior design business of your own, it’s important to understand the fundamental components of the interior design business model and the many hats a successful designer wears on a daily basis. Once you are confident interior design is the right path for you, read on to learn about how to pursue your passions in a smart and structured way that will ensure you become the successful designer and future business owner you dream of becoming.
What exactly do interior designers do, and how do they earn an income? The answer to that question has a wide range of possible answers. Some interior designers provide a full suite of services that begin with leading the construction process to selecting and overseeing the installation of furniture, fixtures, and other movable equipment. Other interior designers may only work on one phase, whether it’s the initial build or the later phases of furnishing.
The fee structure a designer chooses should best suit the size, scope, and type of project, and can vary from one project to another. Some of the common fee types include (Grimley and Love, 2013):
Fixed Fee: A set price for all design services defined in the scope of work
Hourly Fee (Time and Material): An hourly fee for time spent by the designer on the project plus the cost of presentation materials
Cost Plus: A fee based on the designer purchasing products for clients at a wholesale price plus an additional specified markup
Percentage of Construction Costs: A fee based on the overall cost of a project’s construction
Calculated Area Fee: A fee based on a specified price for design services per square foot multiplied by the area of the project site (more common in commercial design)
The majority of designers employ a combination of the above structures, most commonly a pairing of hourly fee and cost plus. Whichever scheme you decide suits your service offering best, begin each project by collecting a retainer, a portion of the design fees, from the client. Collecting a portion of your expected fees at the start of a project will protect you in case your client is unable or unwilling to meet their financial obligations to you down the line. As a business owner, you have to take protective measures to make sure you can always meet your overhead costs.
The typical daily schedule of an interior designer will include numerous tasks that reach across a multitude of disciplines. In order to operate an interior design business, you will have to master not only design, but project management and business administration. Depending on your scope of specialization, design responsibilities can include space planning/programming, formulating design concepts, drafting presentations, developing schematics, producing construction documents, and choosing or installing furnishings. Project management includes the initial client agreement and other contracts, budgets, time schedules, acquisition of permits, purchasing and ordering, invoicing, and hiring subcontractors or other consultants, if necessary. Business administration is comprised of bookkeeping, office management, research and development, and brand maintenance.
With so many responsibilities that a designer must juggle in an average day, all while presenting a cool and composed demeanor to clients and vendors, it’s crucial to implement a standardized system for handling all of the above from the first day you hang your shingle.
To get a better sense of exactly how an interior designer might spend his or her time, read about “a day in the life” of the leaders of three different design businesses, and take note of how each individual approach yields the same successful outcome. Spend a day with MA Allen, a residential and commercial interior designer based in Raleigh, North Carolina, and see how it’s possible to fit in time for design planning, a review of vendor partnerships, a staff meeting, a client presentation, plus two workouts, and two meals at home with family. Next, channel your inner zen to live like Robin Baron, who balances her multifaceted career as an interior designer, furniture designer, lifestyle expert and media maven by starting her day with a meditative mindset, and ends her day unwinding at home or exploring her beloved hometown, New York City. Last but not least, see how design team Caleb Anderson and Jamie Drake of Drake/Anderson play to each other’s strengths, dividing to conquer when necessary, and joining forces to collaborate on their top priorities. To successfully manage multiple simultaneous projects across various continents, and a high profile circle of clients, including former NYC mayor Michael Bloomberg, Caleb Anderson and Jamie Drake are a perfect role models for aspiring design duos.
An interior designer’s income is highly variable and depends on a variety factors. While Ziprecruiter.com lists the national average annual income for an interior designer to be $49,500 (as of February 2019), the American Society of Interior Designers (ASID) estimates the total market opportunity to be $10.15 billion in 2019. The earning potential for this profession is as great as one’s drive and ability to scale operations in step with opportunity. Successful designers not only work harder, they work smarter. As a firm grows to take on more or larger projects, risk and liability will rise alongside income. This is why it’s important to have a strong system for handling business processes before attempting to grow.
Whether contemplating entering the field or preparing to establish a business, one must be aware of the laws and regulations that govern the discipline of interior design and how they vary from state to state. Currently, 28 states (including Puerto Rico), require any person doing business under the formal designation of interior designer to hold a license issued and maintained by the National Council for Interior Design Certification. In order to obtain this license, one must first complete “60 semester or 90 quarter credit hours of post-secondary interior design coursework that encompasses a certificate, degree, or diploma from an accredited institution” (CIDQ). The curriculum for a program that precedes licensure will be architecture focused, with space programming and technical drawing being cornerstones. After meeting the educational prerequisite, a candidate must obtain up to 1,760 work hours under the supervision of a sponsor, who must also be a licensed interior designer or architect, and pass a total of three exams that cover wide and deep topics of technical proficiency.
Once a person becomes NCIDQ certified, they can legally call themselves an interior designer in the state in which a license is mandatory. However, in most cases, she still won’t be able to sign and stamp her own construction drawings like a certified architect would. Due to the higher cost of education, long period of supervised work experience, and substantial commitment of time and money necessary to pass the exams, pursuing licensure may not be an appropriate path for all.
Even in states where a license is a legal requirement to call oneself an interior designer, it’s perfectly legal to pursue a very similar career under the title of interior decorator. Each state has its own requirements to register as an interior decorator business, but the educational requirements are typically far less, and there’s no process of proving technical proficiency. With that stated, in order to be a successful professional, an education in interior design is still recommended. Without an education and/or significant exposure to the design and build process, you won’t have the expected level of knowledge to create spaces that will meet your clients expectations and bypass any pitfalls of liability. This is particularly relevant if your design business will be involved in the construction phase of a project. Without a license, you’ll have to work with a certified architect to produce drawings that can be approved for building permits. However, it’s not good to entirely depend on your architect counterpart to draft exactly as you’ve instructed. You’ll need to have enough knowledge of technical drawing, materials, and building codes to review the work before you submit to an external party for approval if you want to maintain control over the finished product.
If you manifest your destiny as an interior designer by way of selecting materials, furnishings, and fixtures, registering your business under the interior decoration designation will allow you to obtain a trade number, giving you access to the wholesale market of interior products and materials. You can add value to clients simply by offering access to pieces that are not available to retail buyers, and by passing on your discount (plus your markup, if part of your chosen fee structure).
Once you’ve determined the scope of work you’ll provide as a designer and have obtained the appropriate education and level of work experience to support that path, the next step in establishing yourself is to find your niche in the market. Determining which characteristics make you unique to your competitors will uncover your essential value on which you can build your company. The process should start inward with a process of self discovery, leading to the identification of your authentic brand, and move outward to understanding the broader market.
A strong, sustainable brand that can survive through changing trends and ever persistent economic cycles comes from the heart of its creator who imbues its essence in all aspects of operations. Your brand not only represents your aesthetic, but your professional values and method of conducting business. Authenticity is the foundation of every successful interior designer, particularly because personal and professional images interlace, and because authenticity communicates honesty, transparency, and trustworthiness to clients who need to feel confident in a designer before entrusting them the high level of personal access to their homes and lives.
Once you’ve identified your core aesthetic as a designer and established your professional values as a business person, research the market to understand the brands of other interior designers in the area in which you plan to work. Find the points of differentiation between your brand and the others, and determine how your brand will better serve potential clients compared to other designers in your arena of competition.
While it’s best to maintain a positive approach when communicating your authentic brand — your value proposition — to potential clients, it’s important to know your strengths and weaknesses as they compare to your competition. Don’t disparage other designers, but find a way to champion your contrasting strengths. Also, understand where your technical skills may be less developed compared to a competitor. While you don’t need to advertise your weak points, you should never mislead or misrepresent your skills when presenting your brand to the outside world. This will inevitably backfire, resulting in a damaged reputation and potentially even a problem of legal liability, depending on how far along a project or relationship was carried out on a deceptive premise.
Once you have identified your authentic brand and understand your value proposition as an interior designer, you are ready to formally establish your business as a legal entity. Choosing the right legal structure will depend on several factors. If you plan to operate as a solopreneur for the entire duration of your business, you can establish your business as a sole proprietorship, which is the least burdensome entity to register and maintain, but which leaves the business owner with the most personal liability. Of course, as the owner of an interior design business, you will have to purchase liability insurance. However, sole proprietorships have other downsides to consider.
On the other end of the legal spectrum is a corporation. A corporation is best suited for companies that will have multiple business partners, multiple employees, and/or a broad service offering that includes multiple lines of business. A corporation structure provides owners with the greatest amount of liability protection, but is the most burdensome to register and maintain, due to the many laws and regulations that vary state by state. Most interior design businesses will be best served by a Limited Liability Corporation (LLC) structure, which limits personal liability of its owners, has less taxation and regulation, but will dissolve in the case a business owner dies or files for bankruptcy. When choosing a legal structure for your interior design business, think long term about where you want the business to be in 5, 10, and 20 years time. Choose the entity type that serves your long term goals, not the one that accommodates your immediate situation.
Writing a business plan is the next essential step to establishing your interior design business. A business plan is a living document that defines what your business is in granular detail, how it will operate, who will manage the business, and the reasons and timing of the above. Developing one will force you to research the market, define a timeline of goals, and establish professional relationships with vendors and service providers like lawyers and insurance agents. You already have a head start on the foundation of your business plan, because you have identified your brand and its core values. The rest of the document will be a roadmap to realizing the goals you have for your business that will change over time as you learn more about the market and evolve in the way you approach business operations. Don’t be intimidated by what you don’t know, but instead seek to learn and possibly hire a consultant to help fill in your knowledge gaps.
Your business plan will not only act as an important internal reference for your company, but it will be a tool to help secure financing from investors and even basic banking services from financial services institutions. Investors, lenders, and bankers need to see sound evidence that you are a knowledgeable, qualified professional, and that you have a plan for future profitability.
While identifying your authentic brand is an important first step in forming your interior design business, maintaining brand integrity will be an ongoing task as your business grows. Everything you do as a business owner will serve to cultivate your public image, so take care to control the visual narrative of your brand by curating your portfolio, designing a visually compelling and organized website, and presenting yourself as well groomed.
A portfolio is a compilation of your work as an interior designer and is the most important tool you have to communicate your brand. A portfolio can include imagined projects, as would be the case for a new designer who has just finished school, but has not worked on any real projects yet. Conversely, it can include a large number of projects that represent a designer’s complete and comprehensive history of work. The most effective portfolios are those which have been carefully curated, showing only the most compelling images from the projects that most closely represent who you are as a designer.
Ideally, you’ll always work with clients that give you complete freedom to execute your creative vision down to the last detail. Realistically, you’ll have to compromise and accommodate your clients’ specific tastes and budget constraints, especially when you’re first starting out as a designer. The easiest way to maintain brand integrity is to only take jobs that will ultimately reflect your brand, especially when photographed as a finished project (more on that below). While some level of compromise is necessary to most projects, try to work with clients who at least share your general design aesthetic, which you should discuss and be able to identify in your first meeting. Once you agree to work with a client, before presenting them with your specific design and budget proposals, know what you’re willing to change and what’s essential to your artistic vision. Defend the defining aspects of your ideas and try to come to an agreement for a finished project that will be an authentic representation of your individual style.
This will be an ongoing process, and over time you’ll get better at choosing the right projects as well as defending your design decisions to have greater control over final results. As your career develops and you have a growing number of finished projects to your credit, identify past projects that aren’t a strong reflection of your brand, and remove them from your portfolio. Be careful not to only remove projects that you don’t like, but remove projects that have characteristics of projects you no longer want to work on. For example, if you designed a beautiful hotel lobby but you no longer want to take projects in the hospitality space, consider removing it from your portfolio, despite your personal fondness for the design.
Success as an interior designer is based on visual communication, so a strong website is extremely important. Build a website that shows off your portfolio of work as well as your organization skills. While your website and print portfolio should each represent the same body of work, they don’t have to be formatted in the same way.
Your website should cater to the user and be designed with efficiency in mind. For example, while your print portfolio may be artfully unstructured, your website should organize projects by type and include clear labels and succinct descriptions of the images shown. A website should also have clearly divided sections or subpages that provide business-centric information such as client testimonials, designer and staff biographies, and a compilation of past media coverage.
Because your website is your most important marketing tool, be diligent in maintaining it. Update content whenever necessary and constantly check for technical errors, typos, and other mistakes. Your website is the primary portal for the world to learn about your brand, and you’ll be judged as a designer by way of your website more than any other representation of your business.
Beyond choosing the right projects, curating your portfolio, and presenting a professional website, there are other important factors that you can control to best represent your brand. Hiring the right photographer is integral to successfully representing your brand through images. Most people will only ever experience your work as an artist through photographs of the spaces you create. You need to hire a professional photographer who can, at the very least, produce properly focused, well-lit, and all around high-quality images. You should try to go one step further, however, when looking for a photographer you can work with on a long term basis. That person should understand your brand, be able to enhance the mood of your designs through photography, and should even be able to assist in staging photographs to best capture a mise-en-scene. Oftentimes, a properly staged photograph can make a less than perfect project look portfolio worthy.
A fundamental part of every memorable brand is a professional logo. If you don’t have a lot of experience with graphic design, hire a professional to help you design a logo that best represents your brand. Once you’ve designed a logo, business card, stationary header, and selected a standard font to use on your business documents, consistently use them as much as possible. Presenting a uniform image in your business documents and communications, whether sending a formal contract or a casual greeting via email, helps reinforce your brand of professionalism and trustworthiness. Producing professional, branded documents is easy with interior design business software, Design Manager, which after a one-time upload into your user profile, allows you to easily add your logo to any client document, plus other customization capabilities.
Also be aware of your personal presentation, including how you dress and groom yourself, before stepping out into public, even when you are off the clock. As an interior designer, you are a walking advertisement for your services. Your personal image should not only project a sense of style in line with your design aesthetic, but it should also reflect your precise attention to detail and overall neatness. Use your personal presentation to advertise your brand; for example, if your interior designs are glamorous and dramatic, then your personal style should reflect that. Alternatively, if your interior designs are casual, simple, and timeless, your wardrobe should largely adhere to the same description.
Once your interior design venture is formally established and ready for business, you will be ready to focus on building a network of potential clients and vendors, a group of people you will come to cherish and, at times, even rely on as partners. As discussed continuously throughout this piece, successful interior designers surround themselves with people who are aligned with their own design aesthetic and core values of conduct. Once again, the guiding light for finding the right clients, vendors, and other professional contacts is your brand, which will help you determine what to look for in your target audience for networking and relationship building.
Venus Williams, tennis legend and founder of internally renowned interior design firm, V Starr Interiors, shared sage words:
“While building on your brand, you need to determine where you want to be, who you want to serve, and how the people you want to serve live.”
Identifying your target client should be a process of determining who will most value you and your company’s authentic identity, who can realistically afford to meet your fee requirements, and ultimately, who will conduct themselves in alignment with the core values you have outlined in your business plan.
Of course, you won’t be able to find clients who are an exact clone of you. Determine your list of deal-breakers, or qualities that would preclude you from accepting a project, so that you know when to explore new boundaries and when not to waste your time. For example, consider the risk of working with a client that has a design vision that is in stark contrast to your typical aesthetic. Despite your different visions, you have a mutual admiration for the other’s creativity. When deciding if this is a client you should ultimately work with, think about the impact of having a project that is a departure from your previous work in your portfolio and make a determination as to whether the finished project will dilute or expand your brand.
Another scenario you may encounter is a client request to change the fundamental design scheme mid-way through a project. Because interior design is such a customer service-oriented profession, it will be hard to refuse any client demand, no matter the circumstances. However, you will have to fight to preserve the integrity of your brand, defend your designs, and ultimately part ways with the client should you not be able to find a workable compromise. Your initial client agreement, which should clearly describe the contractually agreed upon designs and have been signed by both parties prior to the beginning of work, will legally and financially protect you should you be in this position.
Christine M. Piotrowski, FASID, IIDA includes a sample version of a typical client contract in her book, Professional Practice for Interior Designers, which is accepted as one of the standard guides for best practices in the interior design industry. Internationally recognized industry associations, such as the American Society of Interior Designers (ASID), also offer client contract templates for sale, along with proposals, termination agreements, and generic templates for other legal documents used by interior designers. Once you have collected samples and made a list of company-specific needs you want your agreement to address, work with your lawyer to draft your own standard contract.
Another quality of your ideal client to consider is where they are located. Is there a large enough pool of people that meet your target criteria living within a reasonable distance of your business location? If the services you offer don’t meet the needs of enough people in your community, you either need to move to a new location or find a way to work with clients on a long-distance basis.
Working remotely with clients and vendors requires even stricter controls on your professional image, since you will not always have the benefit of face-to-face interaction and building trust through personal connection. Fortunately, technology is making it easier and increasingly cost effective to work on projects situated outside of your immediate location. With a solid internet connection, you can video conference with multiple parties on platforms as ubiquitous as Apple’s FaceTime, or the easily accessible and affordable Skype. Taking advantage of these virtually free video conferencing options allows you to have the personal interaction necessary to build strong relationships without the unnecessary expenditure of travel time and costs.
Online design services are a fast growing sector of the industry that cannot be ignored. While online design services open up the possibility of a much larger target audience, it simultaneously depersonalizes the experience of working with an interior designer and can possibly diminish the market value of your design services on an overall basis. Another downside to offering your design services on a remote basis is that finished projects rarely show one designer’s exclusively curated space. If you choose to pursue online design, establish a strategy to protect your aesthetic and protect against the ways you may lack control over factors affecting the final result. Ultimately, the market will judge your brand based on your finished projects, and poor results could hurt your long term prospects.
Effectively marketing your interior design business is a process of defining your value proposition, or brand, and clearly representing this identity to a target audience. While your portfolio and website are the keystones of your brand representation, proactive outreach to your network and desired audience is necessary to get traction in growing your business.
Traditional strategies for marketing your business include advertising, media opportunities, and participating in trade shows and design showcases. Advertising, whether print, radio, television, or web, will most often be a paid public promotion of a brand. It’s a tried and true means of marketing that your business will surely benefit from if you choose media platforms frequented by your target market. Press, or media opportunities, function in a similar way as paid advertising, but are free and generally reflect the market’s interest in you as a designer.
Press opportunities with media outlets complimentary to your brand are extremely valuable and should be a marketing priority for an interior designer. Hiring a publicist can help you accelerate the process of securing targeted media coverage and invitations to participate in important networking events. If your business cannot yet support the cost of a publicist, you can lead an in-office public relations initiative with help from Amy Flurry’s book, Recipe For Success, which explains exactly how to engage with the media like an insider. Amy Flurry is a publicist and communications expert with deep knowledge of the interior design industry, giving her the necessary insight to describe the nuanced approach that best suits the design industry.
Attending trade shows and participating in design showcases are also a great way to market your business, as well as meet new vendors. While in-person events do not have the broad reach of other marketing techniques, they offer the invaluable opportunity to make lasting connections with people you want in your network. Nothing can replace the experience of having a face-to-face conversation with a person you are evaluating as a potential partner to your beloved business.
Soft outreach and maintaining ongoing brand visibility is another important component of a successful marketing plan. Staying socially active with friends, participating in community events and charity galas, and keeping in touch with past clients on a one-on-one basis are good ways to keep your network active and growing. Getting together for meetings, meals, and parties is essential to building the deep trust, loyalty, and respect you are capable of sharing with the right contacts. Also, sending holiday cards and gifts to celebrate life events helps demonstrate your sincere connection to people in your network.
Maintaining a blog as part of your web presence is also a fantastic way to keep in touch with your network without direct outreach, while also driving new people to your website. You can blog about design inspiration, highlights from your portfolio of projects, your experience at a tradeshow, or any other topic that is inline with your brand. Think of it as another vehicle to show off your creative prowess and visual thinking. As long as you are thoughtful about the content you post to your blog, the upsides to publishing regularly are multifold. As you deliver meaningful, entertaining posts to an ever widening audience, you will simultaneously grow your email list, social media following, and hopefully, project pipeline.
Social media is one of the most powerful tools available to help grow your interior design business by offering (mostly free) platforms to show off your professional capabilities, reinforce your brand via curated content, and build your network while strengthening existing relationships. In order to most effectively use your time on social media, assess the various platforms and choose those that are most frequented by your target audience. Because visual representation is so important to interior design, platforms that are photocentric, like Instagram, Facebook, and Pinterest, are a good place to start when building your professional social media presence.
Pinterest can be a particularly useful tool for interior designers, acting not only as a social media platform for marketing your business and interacting with your network, but as an electronic file cabinet for keeping and sharing your design inspirations. The site allows you to quickly assemble an electronic version of a mood board, a traditional staple in the interior designer’s tool box, which you can post publicly or share directly with contacts of your choosing. You can also use it as a means of paid advertising by creating “promoted pins,” or posts you pay to promote in areas of the website where more people will see them. Keep in mind that providing exclusive content is part of successfully using Pinterest to promote your business, so be thoughtful about which images you post on one social media platform versus another.
When thinking about what to post on your professional accounts, stay focused on content that strongly reflects your brand. You may enjoy photos of kittens, but if a photo you like is unrelated to your brand, save the post for your personal account (more on that below). Also, be diligent in how frequently you post to social media. In order to successfully leverage social as a marketing tool, you’ll have to post engaging content on a daily basis. Create a schedule for posting and plan content at least one week in advance so that you don’t have to worry about what you will post on a day that has become unexpectedly hectic. You can always adjust your plan as you go to reflect posting opportunities that arise in real time.
Social media is a fun and effective way to interact with your network, whether from your personal or professional account. Your personal account allows for more leeway in the type of content you post, but should still be a broader reflection of your business’s brand, as your personal and professional images naturally intertwine as an interior designer. You can use your personal account to express your personality, but also think of it as an opportunity to display your creativity in a business savvy way. Also, remember the importance of tact and chose your words carefully, whether posting from your business or personal accounts. As an interior designer, it’s best to avoid controversial topics in your posts and to remain positive in tone. Before launching your business, thoroughly comb through your personal social media account and remove any content that you believe could be interpreted as offensive or that deviates significantly from the brand you have recently developed. With that said, have fun with your social media presence and do no not waste the opportunities these platforms offer to show the world who you are and why you are someone worth following.
While research and development can help you get your marketing plan off to a winning start, it’s important to test the effectiveness of each of your individual initiatives to make sure you are making the most efficient use of your resources. This process is called “test, measure, and repeat,” and involves taking detailed notes about your actions, and then recording the changes to your business that follow. Maintain a wide lens when choosing which metrics to analyze, looking not only at changes to your number of projects, but to your number and quality of contacts, for example. While you should measure marketing effectiveness on a frequent basis, continue measuring for years beyond each initial roll out to get a comprehensive view of the long-term effects of your actions.
Interior designers rely heavily on the vendors, furniture, fixture, and design-adjacent service suppliers they choose to work with. Having a good relationship with your vendors is important for many reasons. When assessing a potential vendor partner, you not only have to assess whether or not you like their product or service offerings, but if you can trust them to deliver your orders correctly and on time, protect the privacy of your clients, and operate their business according to core values in line with your own.
A good first step to building a network of vendors is to research and apply to trade programs at companies that offer products you would potentially like to work with. Many vendors offer programs for design professionals that include a discount on merchandise, as well as other perks, like streamlined access to the sales team. Signing up is easy and, in most cases, can be done online by providing your business’s tax ID or a copy of its resale license. While simply becoming a member of a vendor’s trade program does not constitute solid relationship building, it will provide an inside look to help you further assess if this is a vendor you want to work with, as well as initiate an introduction to people within the company with whom you may want to forge a connection. For a deeper explanation of how trade programs can benefit interior designers, read about the trade program offered by luxury furnishings marketplace, 1stdibs.
Even after establishing an initial friendly rapport, you should vigorously vet all previously unknown entities before agreeing to have them work on one of your projects, including calling some of their other designer clients and business associates for references. Your professional reputation will be directly impacted by the experience your client has with the vendors involved in your project, which is why you want to control the vendor selections and make sure you are working with vendors you can depend on. Most successful designers have a rolodex of their trusted, go-to vendors that they work with on a recurring basis across several of their projects.
In order to build a long-lasting, trusted partnership with your vendors, always treat them by the “golden rule,” and be cognizant of the fact they’re operating a for-profit business, just as you are. To make sure the working relationship runs smoothly, be as clear in your communications with vendors as possible. Make sure you are giving them correct information and providing all of the details they’ll need to give well-informed work proposals, comprehensive quotes and time schedules, and any other input their expertise can lend to a project.
In the words of famed interior design podcaster and co-owner of Window Works, Luann Nigara,
“If something goes wrong on a project, do not throw your vendor under the bus to your client. This will only cause an intelligent client to question your judgement for recommending that vendor in the first place.”
Be fair when assigning responsibilities for mistakes, and do not let one small mishap destroy an otherwise strong and long-standing relationship.
Strong relationships with your clients and vendors should lead to a continuous generation of referral business, helping to keep your project pipeline full without spending on marketing efforts. Finding loyal clients and vendors begins and ends with being authentic and identifying people you would happily call your friends. Immediately establishing a friendly rapport with your clients and vendors is essential. You want both to feel comfortable communicating with you throughout a project so that you address problems early on, therefore managing their expectations and perceptions about the finished outcome. Of course, do an outstanding job and make the process a streamlined experience for clients and vendors, and everyone will be happy.
While professional interior designers are in the business of creating beautiful spaces, they are also in the business of making money. If your business is not profitable, no amount of creative brilliance can save it from eventual closure. In fact, as you become increasingly popular as a designer with a growing number of projects, you could be at even greater risk of losing your business if you do not have a scalable financial and project management strategy.
Effective financial planning and execution is critical to the success of any company. Hiring the right team, developing a written set of standard financial and operational procedures, and acquiring interior-design specific software to support these procedures will prepare your business to withstand unexpected, yet inevitable pressures.
The first step in developing a financial strategy is to hire an accountant who can help you choose the right legal structure for your business and develop a plan for meeting your reporting requirements. After you create this initial plan, your accountant will play an ongoing role in your finances. Typically on a monthly or quarterly basis, you’ll meet to review upcoming filings, the current status of your books, projected financial needs and future goals.
Watch this webinar from Design Manager for a more in-depth explanation of how to choose the right legal structure for your interior design business.
After securing an accountant, you may also want to hire a financial planner to assist in developing a roadmap to realizing your long-term vision. Another high priority will be consulting with an insurance specialist, who can advise you on which liability and other business insurance policies you must secure before opening your doors. Hiring a lawyer, ideally with expertise in interior design, to join your extended team of business support is an essential preliminary step to getting your business up and running. Your lawyer will help you draft your company’s set of standard legal agreements, such as proposals, work contracts, and termination agreements. Of course, do your due diligence and thoroughly vet your future team by calling references, checking professional credentials, and assessing whether or not your core values align.
Last, but not least, you’ll either need to hire or assign the role of a bookkeeper to handle the day-to-day tasks of recording financial transactions, updating statements, overseeing invoicing, and checking records for accuracy. While data-entry, cross-checking, and book-balancing may not excite your artistic heart, diligent bookkeeping is crucial to keeping the complex operations of an interior design business organized.
Interior design operations expert, Jennifer La Caze, advises,
“Getting that team put together is all about beginning with the end in mind, and anticipating problems before they arise.”
As discussed in Part I, interior design businesses have unique billing structures with individual components that can be separated, combined, and customized. For most interior designers, project management and accounting procedures are closely intertwined with a sequential dynamic that is continuous throughout a project. Once a project begins, so does an ongoing process of ordering materials and furniture, tracking production and shipment, and collecting payments — all of which occur in a prescribed order that must be properly managed to keep the project funded and operating on schedule.
Establishing a standard process for handling this workflow will help you and your team stay organized as your projects grow in number and size. Put the necessary order of tasks in writing so that you can use it as a checklist as you move through the various phases of a project. Here is an example:
Now, let's break down how Design Manager supports the most common fee structures and how they are applied throughout a project. Keep in mind, the software’s capabilities are cross functional, so many of the capabilities described as supporting Cost Plus, for example, also support the other four types of fee structures. Design Manager allows you to employee a variety of pricing methods, even within the same project. You can customize each item you enter into the system to reflect its individualized fee structure. On the other end of the range of possibilities, you can choose to automatically apply the same fee structure, down to the exact discount and markup calculations, to every new item. Your Design Manager experience can be uniquely tailored to reflect your specific process, saving you time and keeping you organized.
This pricing structure involves charging a fee based on the designer purchasing products for clients at a wholesale price plus an additional specified markup. The process of managing purchase orders and invoices, which must adhere to a strict time schedule, can become overwhelming fast.
With Design Manager, you can:
Save markups, discounts, and other fee calculations and automatically apply them where specifie
Create one entry for an item that can be added to all documents (i.e. proposal, purchase order, invoice)
Customize to your specific process, so your first action prompts the next necessary steps
Now, let’s look at time and materials, the method of charging a flat hourly fee for your time plus the cost of your presentation materials. In order to make money, you must keep track of all company time spent on a project, down to every last email.
With Design Manager, you can:
Add time to another invoiceable item with the option to show the breakout or just one charge
Set Design Manager to automatically create time billing items for a set period of time (i.e. weekly, monthly, etc.)
Start and stop the clock on a built-in timer while working (i.e. emails, phone calls, drawing)
This pricing structure uses a set price for all design services defined in the scope of work.
With Design Manager, you can:
- Create one entry for an entire fee; flexibility in invoicing schedule
These two fee structures are both calculated as a percentage of the total project. The former based on a specified price for design services per dollar multiplied by the total construction, and the latter, price per square foot multiplied by the area of the project site. Both of these pricing methods are more common in commercial design. Many of the Design Manager features described above support both of these fee structures, particularly the ability to auto populate new entries with a fixed fee calculation.
For interior design businesses, managing finances, business operations, and project schedules are highly interrelated tasks that require a comprehensive strategy to ensure future success. While you will likely have to adapt your plans over time, start your business with a standard set of procedures for meeting and exceeding legal requirements, keeping accurate financial records, and managing work and payment schedules for projects. You can’t do it alone! Hire the right team and implement the right support tools, like Design Manager, to ensure you can meet your own sky-high standards for excellence.
Remember, the future of your business depends on its reputation. While your designs are a part of that image, the workings of the underlying business become part of that image as well. If a client has a bad experience as a result of billing mistakes or project management failures, that person is doubtful to recommend your firm in the future.
You’ve decided you want to be an interior designer and have gained the necessary experience to call yourself a professional. You’ve determined your individual identity and have established your authentic brand. You hired a team familiar with the interior design business model, and have a go-to accountant, bookkeeper, lawyer, and insurance specialist. With their help, you have opened your doors for business and have your first handful of projects finished and featured on your website and portfolio book. Now that you are officially the owner of your own interior design firm, your next focus will be on growing your business while maintaining your high professional standards.
As we’ve discussed throughout the series, a key driver for success in interior design is building your network with a group of people who you can form sincere, personal connections with. Once you decide to establish a presence in the community that best reflects who you are as a designer, you must continuously work to deepen your roots there and make your business indispensable.
In order to do this, you must actively participate in your community and be aware of how it evolves over time. This is not only relevant to developing successful advertising campaigns and knowing which venues will have the attention of your target audience, but also to understanding how you can participate and become a value-added member of your community beyond the interior design services you offer. Sponsoring charities that serve your community, and even hosting fundraisers, is a powerful way to show that you care about more than your margins, and a great facilitator of genuine connections to people with whom you share a common interest.
Stay on top of the birthdays and life milestones of your close contacts and create calendar items reminding you to send a note, flowers, or simply pick up the phone and call to acknowledge you are thinking of that person. Sending an annual holiday card to everyone in your extended network is an absolute must, and consider going a step further by hosting at least one annual party for your closer group of friends and professional contacts. Sharing meaningful experiences with people in your network and broader community is the most effective way of building an enduring position of trust and respect as a business owner.
In a fast-changing world, it's imperative to stay informed about the broader market for interior design and the general economic landscape. In order to stay relevant as an interior designer, you have to constantly read trade magazines and other design news outlets, attend trade shows and as many industry events as your schedule will allow, and keep an eye on what is trending on social media. Staying on top of market research can easily feel like a full-time job in itself, but it's important to not take your eye off the ball. Especially with the rapid pace of technological advancements in design software, the proliferation of marketplace apps, and innovations in building and materials, remaining current in your knowledge of all things interior design is the only way to make sure your business doesn't go extinct.
By the same token, as a business owner, you’ll also have to learn the basics of economics and understand how your business fits into the larger picture of what your potential clients want from an interior designer. As economic landscapes change over time, you’ll have to reevaluate your strategy for reaching your target clients and possibly even redefine your fundamental brand. On a more regular basis, you should stay on top of current events to be aware of which topics are trending in your community and identify any areas of controversy you wish to avoid in your conversations, marketing initiatives, and social media posts.
If you’re following this guide, then chances are that your nascent interior design business is growing by the day and your number of projects is multiplying. While this initial success is nothing short of thrilling, how you handle the expansion of responsibilities will determine whether or not your business makes it to the next phase. Ensure your business is ready for expansion before committing to an increase in the number of projects you work on at one time.
If you’ve developed standard operating procedures and are using reliable support tools like Design Manager for your project management and accounting needs, then managing growth should be a matter of assigning responsibility for the additional workflow. Consider hiring more employees to handle the increased load of general data entry, processing work, and bookkeeping. Design Manager can appear magical in the number of beneficial features it brings to your business, but it can only work to its fullest capacity if you feed it proper and complete information. It’s a good idea to have a cross-checking system for data entry, where one person enters information and another reviews it by running reports on a daily, or at least weekly, basis.
Also, as your business becomes more established and word of your good reputation spreads, you’ll likely receive offers to expand your business into new types of projects and possibly even product lines. While opportunities to push your creative boundaries and develop new revenue streams are exciting, they also present risks to your brand. It’s better to expand your business and its service offerings as part of an overall growth strategy that you pursue proactively, instead of responding to potentially off-brand requests as they come. Your business plan, the road-map to where you want your business to ultimately be, will help you narrow your list of new commitments to only those that fit into your long-term vision of success.
No matter how big your business becomes, always remain actively involved in your company’s financial management. Insist your staff copy you on emails regarding financial matters, check your bank reconciliations weekly, and meet with your accountant on a quarterly, if not monthly, basis. If you are using Design Manager for your accounting and project management needs, you can pull a wide-variety of reports at a moment’s notice, including traditional financial statements, account balances, and profit and loss reports. Make it a weekly task to review these reports and check for any mistakes or otherwise unaccounted for cash. Every business lives and dies by its bottom line, so never lose sight of yours.
Interior design is a highly rewarding profession if you’re able to tackle the nuts and bolts of business while harnessing your creative force to create beautiful, functional spaces on time and within budget. As eager as you may be to open your business and begin working on projects, take the time and effort to follow the steps laid forth in this guide to ensure your business is built on a strong foundation, able to sustain growth and flourish despite changing economic and social conditions. Be prepared for anything and always on the hunt for mistakes, missing information, and any other course that needs to be corrected. In the words of famed interior designer, Matthew Patrick Smyth,
“Never assume it's going to be okay; you just make sure it's going to be okay.”
With a highly unique business model of intersecting project management and accounting processes, business tools that are designed to address your industry-specific needs will be vital to your success. Your passion is designing spaces, so the more you can count on software such as Design Manager to keep your business in check, the more time and energy you can devote to doing what you love.