Planning Your 2015 Interior Design Business Success
Since you are a CEO of your interior design business, it is time to think about your 2015 plans if you haven’t written them yet. I recommend that you add at least one or two planning days to your calendar each month, and that you faithfully spend that time working on your business without interruption.
Here are seven key action items for you to complete before the end of 2014:
1. Plan for your profit first. I recommend a minimum of 25 – 30% net profit, and this is after you pay yourself a salary. This is what I call “creating your budget from the bottom up.”
2. Plan for your income before you plan for raises for your team. Many designers pay themselves after they pay their team, and for some designers, that means that they either miss a paycheck or more, or they pay themselves less than their team members.
3. Plan for your marketing – your budget should be 3 – 12% of your gross sales (all receipts for your design fees and product sales) depending on the size of your firm. Break down your marketing budget into the actual components like photography, email newsletter, networking functions, etc. Add the due dates to the calendar for these tasks.
4. Plan to track each employee’s profit contribution to your business. Your bookkeeper or business manager will be an overhead item for your business, so I am specifically talking about your design-related employees. I like to see at least a 50% margin for each employee. That means if you pay your employee (with taxes, benefits, paid time off, etc.) $50,000, they should bring in $100,000 of design fees to your business.
5. Plan your time. As a business owner, you will be lucky to bill 50% of your time for the year, so after you subtract your vacation and holiday time, if you are able to bill 1,000 hours (a worthy goal), you will be doing well. If you bill your time at $150 per hour, that means you should be billing $150,000 during 2015.
6. Make sure you are using the right software to run your business – we recommend Studio Webware for accounting, client and project management.
7. Plan for increasing your skills as a business owner. Which skills do you need to improve? What classes will you take to improve those skills? Will you seek the services of a consultant or coach? You should receive a “Return on Investment (ROI)” for each dollar invested.
If you implement these seven action items, 2015 will be your most profitable year.