How to make my Interior Design Business Scaleable?
Interior design is a very attractive business. (in more ways than one) It’s an outlet that merges creativity and service. It’s an in-demand income career. It holds a perfect balance for work-life and passion project enthusiasm. As with most businesses, some businesses grow and others do not. Interior designer’s average national income is 5oK a year averaging 24.04/hour take-home pay.
So what makes the difference between a business that grows and one that is chugging along taking home 24.04 per hour with no benefits?
Well, it’s better systems, clearer goals, fewer clients back and forth, and a steady resource of projects that make businesses money. Once you have a proven viable business process, then you can add more and more people into the workflow. Once you have your processes down then add to the staff to support it. Let’s go over scalability and what makes the Interior Design business model unscaleable in the broad sense. And how it can be made to grow profitably.
Hi, I am one of those people that jumped into a career in college and did not invest in the idea of business. I was in an industry that was super hush-hush as to how each designer worked. No one I knew, had actually worked with an Interior Designer. But I dove in and decided this was the career for me and I would find out, along the way as to how it worked. (As in no one in the University would disclose the anticipated graduate income.—— and those things weren’t posted on the internet at that time.)
HGTV began and it was growing into its existence. I was introduced to working opportunities. I was excited to find out what it was like. My first gig was running errands for a store being remodeled for a socialite. These tasks of picking up paints and carrying around objects,, well none of them involved pay. Neither were the tasks of helping people pick tile for their flip homes that were friends of my parents… It was experience only. So I got a job as an intern. I negotiated my pay from minimum wage to closer to what I was paid babysitting/ hour. I was super excited to be one of the people with an internship that paid.
And I slowly started to see that, I was not aware of how the people I worked for were compensated. As if talking about money was taboo and there was no need to discuss how the business would and did stay afloat. It was private.
I was in Interior design, as a profession for 5 years, before I began to understand that there is a difference between service-based businesses and product-based businesses. One is easily scaleable and one is not.
Interior Design is a service business.
We work free-lance and we make something super high touch. We are like a fine taste, meets mover, personal assistant, marriage counselor, all while making your house look stunning and make sure you don’t miss out on the correct investments into your home.
We get compensated for our time to service the client. Just like a hairstylist is a service business, a bikini waxer is a service business, and a housekeeper is a service business. Watch 2 episodes of Shark tank and you will see the lesson that service businesses are not something a venture capitalist would invest in. Selling you to a larger group does not make “more profit”…. cause there is only one person who can bill and one person’s aesthetic to sell and you can only work so many hours.
If I was to make an amazing lemonade couldn’t I be successful? I could set up a lemonade stand. I could talk to each person who walks up and I could mix it in front of them. Isn’t it good taste that would make a wildly successful business?
As an Interior Designer, we sell good taste.
The designer’s good taste is formulated for each client and it is processed using our design problem-solving skills, resources, experience, and our time, project by project. If there are no plans on selling the exact same thing over and over you cannot truly create a scaleable business. However there are ways to grow a service business. And there are ways to create product.
People working = Income
Coca-Cola for example, it is important to see those huge companies can make a lot of money doing one thing well. They remarket it, put it in more places, and recreate the same thing over and over. They have the distribution chain/ the packaging, the canning company, and the sales line. If you are Coca-Cola and want to sell your good-tasting lemonade you would use the system the process, the packaging, the credit/ the money/ the clients, and the distribution already in place. Making the selling of large amounts of your best formula of lemonade very profitable very fast.
Interior design is not the same type of business but we too have a product.
The closer we get to recreating a similar consistent look and use of the same lines of furniture, the same budgets, the same paint colors, the same artisans, a formula of things that create the magic, the more profitable the business can become. The more scaleable the repetition of the solution becomes, the more efficient and the greater the revenue streams become from the volume through certain lines that are used. The business process can make the probability that the next person who walks through the door will say yes and become one of your revenue streams.
If you do not take clients within a certain budget maybe you can sell them a shopping list of items. Maybe that list is available to be downloaded. Maybe it’s selections for a kitchen or master bath design. Instead of 10-20 people, a year getting work from you what if you could impact 100? What if you sold the same thing to 10,000 people? or 1,000,000? That is scalability.
When we meet with a client to learn about their project. We decide to go through our best money-making process, or we hand our ability to be successful over to the client. (which is a no-no)
Your business process is a valuable money-making agreement for your business.
Some designers care about making their business marketable to a larger scope of people, some designers care about making more profit. When someone asks questions they either come from a place of servitude or a place knowing you will still be in business next year. Or do you ramble through your head about how they are nice and you want the project?
- The pretty places you make is your packaging.
- The packaging is the credibility and is the reason clients call you
- The pretty projects are your marketing and your product.
- Photography of the space is a necessary goal.
Designers have different business models, not just aesthetics.
Conveniently designers assume clients with more money create a better aesthetic. This business position puts the designer at the mercy of their clients for their success. Those beliefs that those larger budgets are what will catapult their businesses to the next level of income and clients.
What they don’t see that it is their business practices and client management is actually holding them back. Are they completing rooms, asking for bigger budgets, and able to photograph spaces? If you look at the trend of online designers that surfaced they all maintained a look that was obtainable by the masses. White walls + wood floors and white kitchens. Is this what was best for the client? Was this a unique “Artistic flex” of the interior designer? No, it was their scalability formula. Do people like it? Re-create it, over and over, and only change a few things here or there.
Setting themselves up for success is the goal.
Did the last year of work get pulled out during the end of the project due to overspending? Is there a hole in the portfolio because the projects aren’t getting done to a point that is worth marketing for future work? Are they turning over enough work to manage more projects each year to keep their Instagram feed looking fresh?
Are they actively doing their own home so that they have the more relevant design they can speak first hand about?
Do they compare the investment into their company to something that indicates their value? (read this post of Psychology of pricing)
Some designers will attest that doing the same look and aesthetic is boring and not providing their clients the greatest range of items to select from. —-But not all options are good options. Do you budget for relearning how you work with a new vendor or contractor? Or did you inadvertently reduce your fee on the project because their budget was less than what you are used to?
When you meet with the client and give them the contract, that is when your business model is Mercedes worthy or not. This is when a business can reproduce the same success.
- Do you know based on the project size and duration what that monthly income for your business will be?
- Do you know how long it will be to complete the project?
- What will it take to replace that project in your work schedule?
- Are your clients prequalified?
- Do they know how much your fees will be?
- How often they will be billed?
- What the overall budget will be?
- Do both partners agree on the value of your services?
- Do you have another project that you are missing out on because of it?
- Does the product of this project fit into your marketing plan and aesthetic?
- Are you creating a new unique piece of art or reselling your same design over and over?
Do you set yourself up for success?
Better systems, clearer goals, less client back and forth makes a better business. Once you have a business system then you can add more and more people into the workflow, and into the staff to support it. Crafting a clear testable working system is a design business.
Selling pretty is an art. Check out this post discussing how much money a Designer makes.