Profitability is essential for the success and sustainability of any business, including interior design.
For interior designers, profitability means earning more money than the costs associated with delivering your design services. Simple – right? But why is profit so important?
Without profits you can’t reinvest in your business, nor grow your services.
Profitability can impact the quality of your work as when you make more profit you can invest in help, higher quality materials, and all those additional elements that set your business apart like branded materials & packaging.
There’s a personal impact of being profitable too. When you are earning a decent, consistent income, there’s less hustle. You can relax a little and focus on your creativity and the work you love, take on more challenging and rewarding projects, and achieve a better work life balance – after all, that’s why you became your own boss isn’t it?!
This article details how to make your Interior Design Business as profitable as possible.
Know your numbers – cut costs & streamline.
Often the focus when it comes to being more profitable is bringing more money IN – but don’t forget about reducing the amount of money that is going OUT.
Take a look through your outgoings – are there any subscriptions you no longer need, or apps you are paying for and rarely use? An inventory of all of the tools & apps you use in your business could highlight some duplication and opportunities to streamline.
Your time is money too!
Improving your workflow and business processes helps you to increase your profitability. The less time you spend on admin and non-chargeable tasks – the more time you can spend on chargeable design work.
You may want to outsource tasks such as admin or marketing. Paying an expert to do a task that you don’t enjoy, or are not particularly speedy at, is money well spent.
Look at any improvement you can make to your design process. Anything that you do more than once should be automated. This could be everything from putting FAQ on your website to prevent you answering the same questions repeatedly, to developing templates for all aspects of your design process.
Consider also how you can leverage technology to improve your productivity. It’s all about working smarter, not harder.
Re-use products from other projects, recycle and re purpose. Combine sourcing trips and site visits. Minimize use of products that are difficult or time-consuming to source.
Establish a clear Pricing strategy.
Having a well-defined pricing strategy not only saves you time when quoting for new projects, it allows you to keep track of how profitable each of your projects are.
Even if you have been in business for a while, try tracking the time spent on a project to ensure you are still allocating the correct time and resources to each element and charging appropriately.
Stick to the budget and time allowance you set for each phase and task in your design projects – and ensure your Terms & Conditions (T&Cs) are clear on the number of design iterations that included. Make sure you adhere to the contract and charge for additional work.
When did you last put your prices up?
Keep abreast of rising inflation and cost of living. The costs to your business will be rising so make sure your package prices are too to help stay profitable. A 3-5% annual price increase is standard.
Are you getting the best trade deals?
If you have suppliers you use on a frequent basis, can you negotiate better trade terms? Often dealing with fewer suppliers – rather than using a wide range of suppliers – means you have more bargaining power.
Get the best possible prices on materials and supplies to increase any potential for mark-up.
Diversify your revenue.
Are there opportunities for you to increase your income with additional service offerings? This could be a consulting service if you don’t already offer one, or a smaller package such as styling or shopping days, which can slot between your larger projects.
Are there any products you can sell – do you upcycle furniture, can you collaborate with a brand to sell products, or do you design wallpapers or fabric?
Another area to consider is teaching – would you enjoy running a one-off or regular workshop? These can generate revenue in themselves but can also be a good lead generator for your additional interior design services.
Build strong customer relationships.
Existing clients are your strongest marketing tool. They can lead to referrals, word of mouth recommendations, and repeat business.
Consider how you nurture your existing customers and stay connected after their project has been completed. Your existing client base increases your profitability because it takes a lot less time and money to keep an existing client than it does to gain a new one.
Your existing customers are your biggest source of revenue and your greatest advocates.
Expand your Marketing to bring in more work.
Check your marketing efforts. Do you keep track of your marketing return on investment (MROI)? Consider if your existing marketing plan is still serving you well.
Your business, and target clients, may evolve over time – has your marketing strategy been adapted accordingly? Is your marketing activity still finding you your ideal clients? Or do you need to explore different or additional strategies.
Your website and portfolio are your shop front. Do they need updating?
You bought in to the dream of being your own boss – but it certainly comes with its own challenges. There’s no doubt that running your own business is tough – and can lead to sleepless nights.
Using a combination of managing and controlling costs, along with diversifying and increasing your income will help you to increase the profitability of your business.
If you want more help in your business check out how you can collaborate with me – from courses, 1:1 sessions, to our friendly on-line community.