Many interior designers start their interior design businesses with great creative talent but without the benefit of a business background. As a business owner there are certain important terms you need to know and understand. Six of those terms are covered below. Whether you are just getting started in business or have been in business for a while, you may not be familiar with all of them. But it’s never too late to learn and then incorporate the use of these in your business.
1. Ideal Client Profile
To focus your marketing, you need to have clearly defined your ideal clients. It’s challenging if not impossible to have a successful business if you do not know the market to target. You don’t want to waste your time and money marketing to everyone.
You will most likely have multiple profiles. Be sure they are in writing, not just in your head! They need to be thorough enough that you can hand them off to a marketing team, and they would fully understand your audience. When you identify their demographics and psychographics you will then be able to identify in detail their interests and activities. For example, do they have a personal trainer, what do they read, what charities do they support, etc. Having clearly defined profiles allows you to market effectively to the people that are a great match for your business.
2. Marketing Strategy
Once you have created detailed ideal client profiles, it’s then time to strategically reach out to them. Again, the details you put into the profiles will be invaluable in targeting clients who fit those profiles. First, understand that there is a difference between marketing strategies and marketing tactics. People often confuse the two. A marketing strategy is the big picture – a long-term plan outlining how to achieve a specific marketing goal. Whereas a marketing tactic is a specific action you’ll take to achieve that marketing strategy. A marketing strategy is a broad, long-term plan – it defines the overall direction and approach. A marketing tactic is a specific, short-term action – the details.
For example, sending direct mail to your local area is a tactic. The overall strategy might be to gain new local clients through specific messaging that you work into this direct mail. Too often business owners get caught up in the tactics without having a strategy. But it’s important to keep in mind what you’re working toward and make sure everything you do contributes to that.
3. Referral
You may have been told about the value of referrals – but have you incorporated this powerful tool into your business? It’s one of the most effective tools to reach new clients. It’s so effective because it uses the power of the personal recommendation. Think about it. A major part of the sale is already complete as you are either being referred by someone who thinks you’re great or they were so impressed with your work that they want to have you do more. Incorporate asking for referrals into your daily business.
Include a statement in all materials leaving your office – printed on notecards, your website and other marketing materials. It can be as simple as a message like “We value referrals”. Or use a more direct approach and send a personalized note to satisfied clients. Position yourself as an expert through your blog and interviews with local media to stand out from the crowd. Stay in touch with referral partners and ideal clients – share information of interest to them. Show that you’re willing to give more than you take, and clients will be more willing to work with you and share their positive experiences.
4. SEO
Search Engine Optimization is critical if you want to be discovered online. Local SEO is particularly important for smaller firms that want to operate in a small geographical region. You want your website to appear in search engine results, but it’s not as easy as “build it and they will come”. You need SEO. This will drive targeted traffic to your site and improve brand awareness. Effective SEO practices can improve the experience of those visiting your website. It can make it more accessible, user-friendly, and relevant to those searching. In addition, it can improve local searches, and increase conversions – turning visitors into clients.
In basic terms, good SEO is accomplished through the usage of:
- Relevant keywords and keyphrases
- Images with descriptive captions and tags
- Interconnected pages on your site using internal links
There are experts in this field, and it is well worth including them in your marketing plan and budget.
5. Balance Sheet
The balance sheet is the financial statement that describes the resources under a company’s control. It shows your Assets (Cash, Accounts Receivable, Inventory, Work in Progress, Owned Buildings or Assets like cars), Payable (what you owe for loans, credit cards, sales tax, car loan, building loan, etc.) and Owner’s Equity. A Balance Sheet shows your financial position since you started your business. Becoming knowledgeable and comfortable with your firm’s finances is key to your firm’s success.
Understand your bottom line. Where is the money going and what is your net profit? Do you understand the difference between gross profit and net profit? Many designers feel that a particularly valuable tool we offer at Pearl Collective is our financial education. We provide the financial education that many designers didn’t receive, even if they got a design degree. Without a clear understanding of your financials how can you plan for and be assured of success?
6. Time Tracking
Time tracking is critical to understanding and controlling your bottom line. Many designers bill by the project rather than hourly but though they may not realize it, they are still billing by the hour. You are billing for the time you think that project will take – that translates to billable hours even if you do not charge that way. How do you know how profitable your projects are if you don’t know how much time is spent on each one?
Time tracking is like any other habit. It just takes time to establish it as a routine. But you will find it is critical to understanding your bottom line. It provides the ability to discover the true cost in billable hours for each of your projects.You will also find that time tracking will show you just where your time is being spent. This applies to your team members also. Everyone on the team needs to understand how to make the best use of their time to ensure the firm is successful financially. That success affects the entire team.
The Pearl Collective provides designers with business knowledge and growth to help them gain financial success. We empower interior designers to thrive, enabling them to earn more, worry less and enjoy better relationships with their clients and teams. To learn these terms and more, and how to apply them to your business, consider signing up for one of our events!