Interior design as a business Many factors must be in place if an interior design business, or any business for that matter, will be successful. Everyday there are new business started, but only a very small percentage is around for their 5th anniversary. This isn’t necessarily a reflection of the owner’s ability to run a business or of the product or service that he is offer, but, rather an indication of poor planning. Before starting a design business look at how it will affect you. The perks of working for someone else, regular paychecks, sick and vacation days, and the fact that you know that once you have left work, if something arise it is someone else’s responsibility, will more than like end once you go into business for yourself. Starting a business doesn’t happen overnight. It is an investment of time, money and effort. To really get a new business off the ground, you must be willing to devote the first 8-10 years to the business and running it will require up to 120-hour work weeks. Remember you are not starting a job, but a lifestyle. It’s a lifestyle that requires a lot of sacrifices. Be honest with yourself. If you can’t met the demands of starting a new business, wait until the time is right. You want a successful business, not one that struggle just to get by. Planning Starting a successful business starts with a successful plan. Starting a business without a plan is a recipe for disaster. You’ll need an action plan, it should include: Your projected start date Location of the business Expected profit How you will make money How you will charge clients i.e. by hourly rate, fee or mark ups You should also write up a financial plan including your overhead. Make sure you have the clientele. There is no need to start a business if you don’t have he client base lined up. Know the demographic the type of people that will need your services- of the location and the surrounding area. If you find that the demographics are nit suitable, you should find a new location. If you are working as a designer at another firm, review your present client load to see which you feel would follow you to a new establishment. It takes a few years and a lot of word of mouth to build up a good client base, so if you can bring clients that already know how you work, you’ll have a good head start. Competition is good, it is your jobs to fins a better way to present your service to the public, this keeps you on your toes. Where there is competition, there are potential clients. If you find that no one else in the area is offering what you are, it might be an indication that the people in the community don’t need your services. Find the right people to help with the venture of starting the business. Everyone needs help. Internships are a good way to find people who have the skills be a designer but not necessary the experience. Think of interns as molding clay; you can mold them to work the way you want them to, they are eager to learn and they don’t have “workplace baggage” from past employers. Profit A design business is an entity tat offers a service with the goal of making a profit. Other goals include: Growth Increase profit Increase market share In starting a business you want to set goals, planning is the first step in achieving your dreams and making a profit. You don’t want to become just another design firm offering interior design. You don’t want your business to be controlled by events, this make profit fluctuate. You want to be in control at all times. You can’t foresee every obstacle, but you want to be prepared for most of them. Picture you business in five years, is it profitable or is it barely a float? You profit will change from year to year which is fine as long as the fluctuation isn’t too great. If in year two you made a 60% profit and in year three you only made a 35% profit something is wrong with your overall business. You want to test different strategies; tick with the strong one that produce greater profits and eliminate the one that don’t Most business don’t turn a profit because they haven’t clearly defined there goals. Make sure your goals are understood by al that is involved in the business. The business principles must agree with the business goals or it will not be profitable. Location Location affects the business greatly. If you expect a wide range of clients from a large geographic area or if clients don’t have to come to your office location isn’t all that important. However, if you design studio depends on the surrounding community your location will make or break your business. Before you pick a location, make sure it is a location where people would use the service that you are offering. You don’t want a location where the people are not accustomed to or don’t want the service. It might be an area where financially, people can’t afford an interior designer. An interior design business is a business based on change; if the consumer doesn’t want to change their homes, you won’t have any business. Find an area where there is a broad client base. It should be an area where people make top salary. Interior designers are not cheap. The potential clients must be able to afford the service. If it is an area that is prosperous, it will usually be a good location for an interior design business. Find out the average age of he people living in the community. These days’ young people are earning higher incomes. They don’t have dependent, so they have more disposable income. However baby-boomers are living longer, so they are buying retirement homes. They are becoming strong consumer of interior design services. Older clients don’t want to worry about thing that they did when they were younger. So they are more than happy to let someone else design their homes. Make sure the area is somewhere people want to live. It is difficult to have an interior design business when the people in the community don’t want to live there. Potential clients won't want to make their home stylish if there community is not. Marketing Marketing is the process of getting goods and services to the consumer. It can be divided into 3 major areas: marketing and development, advertising and public relations and sales. Interior designer need to learn to market and sale their services. They need to learn to communicate with their client base. It’s an interior designer’s job to solve problem that their clients can not or does not want to solve alone. To sell the services the designer must somehow show the client they can do this. Interior designer must be business people who understand their business. The business practice of marketing is an effective tool for controlling short term and long term development. The first and most important part of marketing is to establish your company overall role and to define the business strength and abilities. You can then identify which strategies so that you can achieve your objective. The most costly mistake a business owner can make is to place their emphasis on existing clients and overlook new client. Finally, for market development to be effective, it should be highly systematical and a structural process, with an exact schedule and review of each client’s interactions - from the first contact to the final payment. Making money Before you make an estimate or proposal make sure you understand exactly what the client wants. If you give an estimate to soon, before you know exactly what the job requires, you’ll find yourself in trouble – either you’ll take a loose because you didn’t charge what the job is first, you’ll run out money before the project is complete or you’ll have to tell the client the estimate was incorrect and the job will cost more money. This will hurt your reputation for being honest and reliable. To combat all this, spend a few hours with the client and find out exactly what they want. When pricing a job there are four things to consider. Scope of the job Services to be rendered Staff requirement, including their time and cost Your schedule. A design business must have the right work to build a reputation for quality. The first priority is the client. Staff, contractors, vendors and everything else is secondary. If this fails then the business will not be successful and profitable. Carefully defining and assign a project is the best way to determine the appropriate pricing method to use. A project can take anywhere from a week to a few months. If you price it correctly, manage your time and have the right people on the job you will have a very successful business. .