Starting Your Career as an Interior Designer: The Business of Interior Design

Piece of My Heart

Should the unthinkable happen and you discover your client has chosen another design professional to work on a project what should you do?

We had worked with a client to complete a whole house renovation and had continued to keep in contact.  About eighteen months after the completion of the initial project I heard from another designer my client had signed with a firm in San Francisco to renovate an apartment they had just bought in a condo there.  Yes, I was surprised.  Almost immediately the client called to ask about selections of fabrics we had made for the previous project.  She explained she was starting a new project with another design team and they wanted to look at what she had done before.  I told her we would call back with the requested pattern numbers before the close of business that day and, with her permission, contact the other design team to offer any help they might need from our office.  I don’t mean you will be trying to “horn in” on the design job I simply mean as a professional you are willing to offer assistance.  The design team never returned my telephone calls.  I didn’t hear from her for almost four weeks and thought she must have been well on her way to a completed design for the new condo.  The next day she walked into my office without an appointment and in tears.  The whole awful story spilled out.  She had gone with these designers because they were referred by the realtor.  She knew and trusted the realtor and for a number of reasons it seemed to be a good solution to her interior design needs in an area away from Carmel. 

     Many realtors work with designers for referrals to purchasers and we, too, have a list of realtors who refer us when out of town buyers come to Carmel.  The new design team she selected was young, excited about the condo and persuaded her they could create the space of her dreams within her budget.  You know the rest.  They wanted only to create what they felt was right for their particular interior design style and not what might be right for the client.  They would not listen to any of her thoughts and continued to override any attempt on her part to be involved in the process.  Now, she was in my office crying on my arm and wondering if I would work with her.  She was under a time deadline and needed a lot of decisions very quickly.  Of course we complied.  We never spoke of the other design team and her new project moved forward in a timely manner and with a minimum of complications.  She explained months later the only reason she even considered coming back to us was the very professional and prompt way in which we answered her request for fabric information when she decided to work with someone else.  She said she knew we would respond to her current crisis in the same professional manner.  I was glad to help and also glad I hadn’t put her off when she called just because she chose to try another interior design firm.  You never know what might happen in the future.  As they say, never burn a bridge behind you.  You don’t know when you might need it again. 

Jive Talking

I was talking with a friend the other day about sales and how much I have always enjoyed talking with clients, friends and new acquaintances.  His response to me was, “Sure, Tom, it’s easy for you because you like to Bull S*** all the time.”  It got me to thinking about whether or not talking with clients as you make a sale is really just Bull S***ing.  I really don’t think so but it makes me think about what it is I really am doing when working with clients.  As a young man I spent hours with my father when he was working and I watched as he talked to his clients.  Most of the time I thought they were just “shooting the breeze”, as we say down south.  As it turns out my dad was making a sale each and every time.  I now understand it was the forging of the relationship with the client that was the true context of the talking.  Also as a young man, I promised myself I wasn’t going to be like my dad.  Over the years, of course, I know I have become very much like him in many ways.  I certainly share his love of the “gift of the gab” and how it works so well in sales.  We, as professional interior designers, use interaction with our clients on so many levels.  Our sales pitch is often geared to what the design is all about and often I know it is more technical than mere chat.  What is important, however, is how we use the context to move the sale forward.  Being able to talk on a variety of subjects is very important and within our own businesses we should also keep abreast with what is going on in the world. 

Meeting people when we’re out and about is also a great way to foster new clients.  Have you worked on your “cocktail chatter” lately?  It’s very important to your persona and your image in the public eye.  Making sure to ask about their life and what they are interested in also makes it easier for you to engage them in a little chat about aspects of your life you might want to share.  Being glib and at ease with people also encourages them to ask questions about you and your business.  That, in turn, should bring you more clients.  Talking easily can be learned and as professionals we benefit from the ability to talk about our business and make people aware of all that we do every single day.  So, I still don’t think my conversations are Bull S*** and I know it has helped me foster clients and relationships.  Like everything else in life and business it may not bring instant returns but will, over time, produce a more varied and interesting clientele.    

 

Pick-a-Little, Talk-a-Little

In the interior design game who you know is just as important as what you know and how skillful you are at leveraging your connections to gain exposure and grow your business.   A network of friends, colleagues and mentors is one of the important tools for your success.  You will also find your clients are a significant part of your networking advantage in the marketplace.  Your clients will be a large part of the old “word of mouth” marketing you’ve heard so much about.  You want to make sure your clients hear and understand what you want them to talk about.  A clear message is important in creating good “word of mouth” throughout your network.  What they tell their friends and how they tell it will take you far in this particular aspect of marketing.  As we will discuss later in this chapter the other components of marketing will also have in impact on your message.  Understanding the individual pieces of the overall concept of marketing and public relations is part of good client management and promotion.      As with all aspects of marketing it is important to create and implement a strategy that will benefit you and your firm through networking.  An excellent choice might be to align and partner with key referral sources.  These sources might include realtors, architects, builders and contractors that already do business with your target clientele.  In this instance your marketing will be directed at them and your message should contain benefits for them that show how you can help them be more successful in their business.  In some instances it might also be appropriate to offer an incentive for referrals to potential clients.  A relationship with these key individuals based on excellent service and mutual benefit for the client will result in the easiest and best leads.  These can be invaluable contacts since the clients call you ready to hear what you can offer because the referral partner has spoken so highly of you and your firm.       Your network will also include membership in numerous trade, civic and professional organizations.  Although in many instances you will be talking to people in the same business as you it is still important to convey as succinctly as possible your “networking” word of mouth message.  Within each of these types of organizations are members who will talk about you and what you offer to the specific group and as a professional.  Their clients, friends and family are an extended network to whom you want to speak.  It is the members of the organizations you join who take your message to them.  Their family and friends then send your message out to their friends and colleagues.  Remember, good news as well as bad goes out through your network.  It has been said that for every one good message spoken along the network trail as many as six might be spoken if it’s bad news.  You never want your message to become simple gossip.  Maintain a consistent stream of good news about you and your business for people to share.  Let them know when you create a new division within your firm, when you hire a new employee and what awards you might be receiving.  All of this type of news is worthy of repeating and will enhance your standing in the community.  Don’t inundate your network with a constant stream of uninteresting items or true gossip.  Make sure what you share speaks to your acumen as a business person and professional and don’t try to fill the “airwaves” with a constant stream of chatter. 

Daydream Believer

I was told the other day by an associate “It must be wonderful to be such a success.”  I didn’t know what, if anything, I should say.  The comment came after someone else had mentioned the second book coming out next month and how well the first book had been received.  It got me thinking about what success means to each of us and to the world in general.  All the usual suspects came to mind.  A nice home, car, healthy family and partner, a wonderful area in which to live and all the other many things often sited as manifestations of success. 

     I then thought about the work I do as a mentor and educator.  For me that is an astounding expression of success.  Each time I step before a class I learn something from someone in the classroom.  It’s a wonderful feeling.  Every time I work with a designer to reinvasion their business I get an insight into my own business.  It’s wonderful to see another designer implement changes we decided on together that take the business to another level.  Is that success?  I think so.  For me it’s seeing others succeed in whichever way they have defined as important to them. 

     As an entrepreneur I have always worked to live and lived to work.  I do take time for myself but the business is always with me.  That’s what being an entrepreneur is all about.  When I first thought about opening my own interior design business I certainly didn’t consider myself an entrepreneur.  As a matter of fact I didn’t even consider myself a business person.  I thought I was just an interior designer.  It seems so silly now after all these years to think about what I thought I was doing at the time.  It did become quickly apparent that I would have to be more than an interior designer to earn a living.  That’s when the business and entrepreneurial part of my persona kicked in.  That is when I became a business person. 

     I wish I could say I was an instant success.  Oh, I earned a living and was able to pay all my bills but there wasn’t enough growth for me.  Once again, another set of business tools had to kick in before I was able to successfully market and promote my business in a way that brought better and higher quality jobs and with it a more comfortable income.  Nothing wrong with making money, you know. 

     That’s the thing about having a dream for yourself and your business.  The way you first envision it is not necessarily the way it will turn out.  Put another way, you may have a dream but be prepared to change with the reality of your life.  Opportunities may come along that weren’t part of your dream but would be impossible to pass up.  Does that mean it’s silly to make plans based on your dreams?  Not at all.  Just be ready for the turns and changes that come along with successful dreams and plans.  That, for me, is what makes being in business and living this life so much fun.

              

From Moment to Moment

For most of you, I would guess one of the first things you sold your client was time.  Your design fee was included in the letter of agreement or contract, wasn’t it?  So, how did you arrive at that figure?  In the beginning, you might have simply charged what everyone else was charging.  That’s not the right approach.  Your fees should be based on your acumen and experience as a professional.  It might be possible for you to charge more than other designers in the area because of your ability to market more effectively or get better editorial press.  Your fees will also be affected by your business overhead.  Large offices, fancy cars and an ample staff all contribute to the equation of hourly fee setting.

     Let’s take a look.  No matter what others say, there is an overhead attached to every movement you make from the moment you step into your office until you turn off the lights in the evening.  So, no matter what task you perform there should be an overhead charge attached.  Wait a minute; aren’t we talking about the art of the sale, here?  Yes, but to get to a sale you, as a professional interior designer and project manager need to understand how important costs and profits are to a successful business.  This will enhance your client management skills by understanding what, exactly, you are selling when you present to a client.  It’s the benefit above and beyond the actual cost of a particular product or service that is the engine of profit.  As you become more comfortable with that idea you will be able to sell with ease.

     Design fees are not just free money coming in.  You, after all, deserve to be paid for your time just as any other designer in your office.  By looking at how much you pay yourself you will have a good idea of what the net cost of your time is.  Now, add something for profit and you will define the cost of an hour of your time to your client.  Add to the cost of your salary the cost of overhead associated with you being in the office and you begin to see how much your hourly fee should really be.  If you’ve been charging $ 100.00 for hourly time and it costs your company $ 77.50 to have you on site the profit is only $ 33.50 or a margin of profit of only twenty-three percent.  Not a particularly stellar performance.  You need to look for ways to increase that particular profit margin.  One of the best ways I’ve found to increase the margin of profit on hourly fees is to increase the amount you charge for that hour of your time.  I actually advocate raising fees at least once a year.  Don’t worry; this needn’t be a deal breaker.  In our particular business an increase of one percent is huge.  Now try five percent.  Taking your fees from $ 100.00 to $ 105.00 will increase your profit margin to twenty-six percent.  A three percent increase in margin of profit is great.  Although you may think $ 5.00 an hour isn’t enough to really matter, consider this.  If your billable time is in the neighborhood of forty-five to fifty percent of the time you spend in your office each week a three percent increase to your bottom line could amount to over $ 5,000.00 a year.  What could you do with that money?  How do you feel about that paltry three percent now?

     If you do that once a year for three years it will enhance your bottom line for design fees by over ten percent and most clients won’t even notice.  Selling your expertise as a professional interior designer is an important part of your overall business plan and should be included in any conversation you have with your peer group about mark-up, overhead and profit.  As the principal of your firm your time in many ways is more valuable than those who work in your offices.  Your staff overhead must always be included in any calculation you might incorporate for pricing.  Remember, they will be working the orders once the sale is completed and you have moved on to the search for new clients and other client presentations.