Managing an interior design business is somewhat like managing an interior design project. To operate your business efficiently, you need to have an orderly, logical process for how you attract clients and projects, how you communicate and interact with clients and providers throughout the design process, and how you handle the incoming and outgoing flow of payments. It may surprise you to know that from a business perspective, the success of your firm depends just as much on how well you manage the business process as on how well you conduct the design process.
Although many designers rely heavily on referrals, the first step in any good interior design business process is having a plan for attracting the right kind of clients. That starts with identifying your ideal client. Determine the kind and size of projects you want to do, the revenue you seek to earn, and the personality traits of people you would like to work with.
Based on that profile, you next need to set prices for your services, taking into account what level of business operations (including staff) you will need to serve that type of client, fee structure (hourly, mark-up), and how much annual profit you hope to earn.
Having defined your client base, you can then develop a marketing plan and sales strategies for how you will make contact with them, motivate them to contact you, and convert them to clients. To support that effort, you need a system for recording and storing potential client information and any communications with that client in one easy-to-access place, like a CRM. You also need to establish procedures for onboarding clients. This includes welcoming them, establishing how you will communicate with one another, addressing their questions and concerns, and providing them with schedules and documentation regarding their project.
Every project has two sides to it—the design process and the business process. To help the design process run smoothly you should establish business processes and procedures for how each phase of the project will be managed, from the initial client meeting and programming through to the final walk-through and reveal event.
At the start of a new project, each member of the team should have clearly assigned roles and tasks. For example:
- Who will have direct contact with the client?
- Who will develop the design concept, renderings, and plans?
- Who will research and procure the necessary products, materials and finishes for the project?
- Who will develop the project proposal and budget?
It may be that some of these tasks will fall to more than one member of the team. In that case, put in place guidelines for how team members will work together and make decisions.
In addition to the design, procurement and implementation aspects of the project, other roles and tasks could include:
- Maintaining current and accurate schedules, as well as records of all project-related communications, documents, orders, permits, etc.
- Tracking billable hours and expenses
- Tracking orders and deliveries, managing deliveries and storage
- Coordinating with contractors, custom shops and other service providers
- Developing checklists of items to be completed or problems to be resolved
- Documenting the design process, including any changes or deviations from the plan, issues that arise, and items to be added to the final punch list
For each of these tasks, you should have written processes and procedures so staff know what they are to do, how they are to do it, and who they are to go to if problems or questions arise.
Managing invoicing and payments
Critical to maintaining adequate cash flow for the business is having systems, procedures and standards in place to ensure the timely processing of invoices and payments. A variety of software programs exist that can simplify these processes, but they still need to be monitored by a staff member or outsourced service.
The terms and schedules for invoicing and payment should be clearly laid out in the project contract or letter of agreement and in the project proposal. These should include terms regarding any additional charges that may be incurred for late payments or denied payments. As much as possible, try to coordinate incoming payments with payments going out to vendor, suppliers, service providers and others.
It may seem overly burdensome to compose standards, process and procedure documents for each of these tasks and duties. Once they are in place, however, they will help avoid confusion and errors and save time for everyone on your team. You won’t have to discuss or reinvent them each time you have a new project, and, if kept electronically, they can be easily edited or modified if need be in the future.
A well-established interior design business process, like a well-established interior design project process, helps to ensure consistency and makes everything run much smoother. As a result, your firm will benefit from increased productivity, a higher level of quality control, improved customer service, better cost control, and increased profits.