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How do you know it’s time to grow your interior design business? Because you’ve uttered these phrases:
- It’s just me, doing absolutely everything.
- I can’t stand putting together fee proposals / detailed designs / marketing campaigns. I wish I had someone to share the workload with.
- There isn’t anyone for me to bounce ideas off.
- I can see the potential for my business. And it’d be a waste if I don’t achieve it.
It’s common among interior designers to become victims of their own success. Work hard to grow their interior design business. And after a few years, they’re run off their feet doing a good job for clients. With no time to think about anything else.
Can You Afford to Grow Your Interior Design Business?
The ratio of business income to profit varies hugely from firm to firm. Not least depending on the mixture of income from billed hours (design concepts, project management) and income from markup. To use a (generous!) rule of thumb, an interior design business could have a 30% gross profit margin. And based on £100k income, that’s a £30k gross profit. Unfortunately, this amount isn’t yours to spend either.
Next, we need to consider overheads. Business running costs that aren’t a result of any one project. For example, IT hardware and software and phone. Insurance is another overhead. As are subscriptions to industry bodies, journals, and so on. All in, overheads are likely to be £3,000 or more a year. As a result, your personal income is a maximum of £27,000 a year. If you take out all the operating profit. However, it’s advisable to leave something in the business. Just in case.
Based on this example, a £100,000 business income is likely to net you annual personal earnings of £25,000. Expressed differently, almost £8,000 per year less than the average UK interior designer salary. Sure, you might have more creative freedom as your own boss But you’re likely to be working much harder. And have a lot more non-design tasks to do as well.
Ways to Grow the Size of Your Interior Design Business
Often our first thought when we consider how we will grow our business is to take on another designer. An employee. But salaries for even newly qualified designers start at £20,000. After that we need to add employer’s national insurance and pension contributions. Put another way, the practice owner invests almost all their personal earnings. In the hope that their new hire earns more in design fees than they can themself.
As a business owner, there’s more than just design to think about. There’s all the admin, operations, and finances to take care of as well. As such, outsourcing is an option. The first port of call when outsourcing is generally marketing and advertising. Social media or otherwise. Although if you’re struggling to keep doing a good job for clients you already have, finding more won’t help. Maybe first look for a virtual assistant or bookkeeper to help lighten the administrative burden.
An option other than an employee is a freelancer. Yet, the cost of a freelancer can outweigh the cost of hiring an employee. Alternatively, consider how on-demand service providers operate in the ‘Gig Economy’. A price for every small job. Similarly, entrepreneurial designers are providing pay-as-you-go services to deliver parts of the design process. Such as CAD or visualisation. It can be an affordable, flexible way to grow your business. Moreover, a good way to offload those parts of the design process you don’t like!
The Barriers to Growth
Repeatedly the thing that stops you growing your interior design business is you. To illustrate, does any of this sound familiar:
- I don’t have time to teach someone!
- What if they get it wrong, and it affects my clients?
- It’s all in my head. There’s no way I could give it to someone else.
I’ve had all these conversations with interior designers. And they’re all barriers that you can overcome. More than that, these thoughts are frequently obstacles that we’ve created for ourselves. Or to use coach-speak, self-limiting beliefs. Specifically:
- Time to teach someone else. Take the example of a bathroom, estimated to be 8 hours of CAD work. The client pays £320 for the work, based on £40 per hour. A newly qualified grad could do the CAD design for £10-£15 per hour. Plus 2 hours of the owner’s time for guidance and quality checks. As well, look it at this way. The owner now has an extra 6 hours billable to another project. For an investment of £120 and 2 hours, the owner’s potential daily gross profit has increased from £320 to £440. In other words, up nearly 40%.
- What if they get it wrong? Commonly this is due to finding it difficult to trust others. In the same vein, it takes time to build trust. On the other hand, not everything in your business is visible to clients. Nor sets your business apart. Think about your design process. What parts can someone deliver to you, not the client? And that’s where you begin to build your trust in others.
- It’s all in my head. Yes, that’s undoubtedly true. Because I’ve never met a small business owner who doesn’t store their business processes in their head. And you might need to change this if you’re considering taking on a new qualified designer as an employee. Bet that as it may, the same isn’t true for your business operations. Bookkeepers, virtual assistants, accountants, and so on, who look after small businesses are more than used to the chaos. In fact, chaos-resolution is part of their service!
Working out the Next Step
Of course, every business is different. Each with its own challenges, opportunities, and advantages. As a consequence, when it comes for you to grow your interior design business, there’s no silver bullet. Equally, you can figure out a lot on your own relatively simply. Using 3 techniques:
- Cost / benefit. As illustrated above in the bathroom design example. Approximate to keep it simple. That’s to say, use per hour rates not markups to calculate benefit. Use widely available estimates. As an example, a quick Google search will tell you a VA costs about £30/hour. And less for a bookkeeper. My motto for this type of analysis: I’d rather be roughly right than precisely wrong.
- Special, necessary, or worthless: First, reflect on what makes your business special. That’s to say, sets it apart from your competition. For instance, is it your reputation, flexibility, pricing? Then identify which parts of your design and business processes make your business special. Everything else is either necessary or worthless. Be honest with yourself, stop what’s worthless. Once identified, delegate the necessary activities. At the same time, start to build your trust in others.
- Ease / benefit comparison: This is different from the cost / benefit analysis above, as it’s not a numerical evaluation. Instead, it’s a relative comparison of choices available to you. To use a hypothetical example, you have 8 choices. When ranked in order, choices A and B have the most benefit. In the same vein, choice A is harder than choice B to put in place. Therefore, go with choice B. Full instructions for the Ease-Benefit Matrix are available in the Design Tips and Tricks section of the YourCoachApproach website.
Time to Grow Your Interior Design Business
If your day-to-day has started to overshadow your pride in what you’ve achieved, then it’s time to grow your business. Do you no longer want to do it all on your own? Then it’s time to grow your business. Does your business have more potential? It’s time to grow your business.
Do You Want to Grow Your Interior Design Business?
YourCoachApproach is a business coach specifically for interior design professionals. I am Andrew Brown, an accredited Coach who can help you take your interior design practice towards a new destination. One towards further growth and fulfilment.
Book a FREE 30-Minute Chat to take the next step towards interior design business growth. And let’s see what we can do together.
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