What Does My Business Need to Be Profitable? (Ali Faulkner)

Allie, it’s so great to have you on Creative Genius Podcast. Welcome. Thanks for having me, Gail. it’s our pleasure. So.

I would love for you to tell your story. How in the world did you get started with interior design and tell us about your story in Orange County, just a little bit about you. Gosh, okay. Never very good at making a long story short, but I’ll try my best here to give you the spark note version. I used to work in luxury hospitality and consulting. So I used to come from a service -based background and worked in operations. I moved to Orange County six years ago.

for another job. It was my first opportunity in being a part of a startup and actually building a company. I was with them for two years and life happens. Unfortunately, I was a part of a layoff. You take the chance by going to a startup and I had the opportunity, this was like early 2019,

where I started to think to myself, I really enjoy building and a lot of the startup companies I wanted to work for, they were all located up in San Francisco and remote work like wasn’t a thing. My husband being the like amazing person he was, like, Ali, like I really love where we’re living now in Orange County, like you should look at starting something of your own. And I was like, okay, well, what am I passionate about?

What does it require like a ton of capital to start a business? And I was like, well, you know, what I’m really passionate about is like serving people. And that doesn’t require a ton of money to start that type of business. And I believe in myself. I had a strong like belief in myself that I could start something. And so I started to think to myself, like, at the end of the day, like I have a good eye for design people, you know, would say I had cute outfits and I had like

you know, furnished our home and renovate our little $25 ,000 kitchen. And during that time while I was interviewing for other jobs, I would be like trying to take a phone call to take this interview. And the guy who would be showing up to do my tile would be like, Hey, before you go, like what color grout joint and what size? I was like, okay, this process of interior design, like this was terrible. Like the level of like experience and service, like I could make this better for people. So.

I had that light bulb moment in my head. was like, okay, you know, everyone has always said like, you have cute outfits. I had done our home. And it dawned on me that like, I could get into interior design. And while again, I wasn’t necessarily accredited, hadn’t gone to school for it. I knew what it took to build something from the ground up. And I saw

myself and 10 other people do it at the startup company. So I really had the confidence to believe in myself. So I did a little bit of research, right? And I was like, okay, what, how do you make money doing interior design? And I learned, you know, there’s, you know, products that you sell and then there’s service. And I said, I’m really good at service. I used to work in luxury five star hotels. I built at client experience before I can build this business.

So that’s the spark no version of my journey. And so I started the business in October of 2019, had no idea what was about to happen to the home industry. And I really have take it. I would say like I rode the tailwind of COVID. And I really think that now being in 2024, how we have grown so much of that is me taking risks, but I would say very calculated risks by looking at my data.

which has allowed us to propel and be where we’re at, you know, in the less than five years that we’ve been around for. That’s so crazy. Well, how many people on your team now? good question. So it’s me plus seven now, which is just like, yeah, it’s, I’m so grateful and I never ever would have thought like, we would have the team that we do at this stage of the company. But yeah, me plus seven says, it sounds really weird to say.

Yeah, not bad for just a very short period of time So how did you have this confidence? Where did that come from? Did you just grow up you just born with it? What is it? What I’ll say is that I moved a lot growing up I went to three Let’s see here two different elementary schools three different middle schools and two different high schools. So I have realized that because of the environment

that I grew up in and I was constantly being thrown into these new spaces and like having to like not eat lunch alone every time I went to a new school that I always kind of just put my best foot forward and knew that like, I’d make a new friend, I’d figure out how to like navigate the new school. I can’t tell you how many times like, I think I tried out to be on like a dance team, basketball team, ran for student body president twice and like.

I was treasurer once, so you could say that I succeeded. to me, the way that I think a lot of people think about failure and trying to do things, I think because of how I grew up, it’s not really my perception of failure. As long as I learn something from it and as long as I’m not doing the same thing over and over again, expecting the same results, that’s truly insanity.

As long as I’ve learned something by trying something like I’m winning at the end of the day, which sounds really lame and really cliche, but I think that’s what gave me the confidence to try to go out and build this business is like I had the resilience to know that like I would figure it out. Like I would find a way. And what I’ll say too, cause I did a little bit of research before I got into the industry and there was 2 ,500 interior designers within 25 miles of coast to me. What that means is it’s not only a really

I think mindset, this goes back to like what you always talk about, but like a lot of people could be like, 2 ,500 interior designers within 25 miles. Like, how am I ever gonna stand out? My mind, I was like, my gosh, there’s gotta be a lot of resources here then. Like if there’s that many people, there’s probably that many people trying to sell to those people and teach these people. like, so I looked at it as like, wow, there’s probably a ton of resources that exist here.

And that’s really what I did. Like I listened to podcasts and I learned about all of these, you know, showrooms that existed and third party, like I would say like purchasing houses. Like I learned from my curiosity of the resources that existed. And that’s what gave me the confidence is like, I was like,

I just need to know enough to be dangerous and I’ll learn everything else on the fly. Like, right? You’ll figure it out. You’ll figure out that you need a P trap when you have a floating vanity because you’ll know someone who knows the right information. it was just knowing that all these resources existed here and not being discouraged by how saturated this Orange County market is because it really is. It’s very saturated. Well, obviously it has not slowed you down. they’re in your company, obviously you’re well,

over a million, probably more. And so we know that when you get to that point, that you have to have some sort of foundational knowledge that has supported you to make a success of what you’re doing. So how do you think you learn so much about business so quickly? Besides the curiosity? Yeah, besides the curiosity. So I think it does come rooted from like just being a curious person. There’s multiple parts that I’d like

learned on the fly. And I think a lot of people have a misconception of myself right now. And they hear like, Ali, you worked in consulting, you worked at Deloitte, you must have like looked at PNLs all the time. Like, no, I didn’t like, I, you know, I would help with like, budgets and things like that. But like, gross profit margins and like net profit margins, if this sounds like a foreign language to you, let me tell you it was for me as well. Like as of two and a half years ago, this was

stuff that I knew that I needed to know. really the curiosity is what like the curiosity and being really tired of making no money was really what drove me to start trying to figure out how to do this. But I knew how to build a client experience and client journey. I knew how to like build the operations side of the business, but I didn’t I knew that I didn’t know the finances of

a business more or less an interior design business. So that’s when I started to like look at like maybe a fractional CFO and started to explore that route. And then when you get to the point where you’re tired and you want to make more money, you also think to yourself like, okay, how do I do less? And you think about hiring and it kind of becomes a domino. And then you go start to to recruiter and they say, hey, you want to hire, how much can you spend? And you’re like, well, I have no idea how much I need to spend.

That’s what led me to you guys full circle, right? Is I wanted to hire someone I wanted to make more money. I didn’t know how much I could afford to pay someone. someone, Ken was like, Hey, you got to go over here. And I was like, okay. And I took the course twice. Like I took the financial course twice. And I will say that

everyone can hear the same message, but I heard it so differently. And literally like my husband and I would put you up on my TV in my living room on a Sunday and like go through the business model of interior design and like it. And then I started, I took that information and I applied it to my own business. Okay. Based off how much you want to make per year, this is what your top line revenue needs to be. And I worked backwards and I was like, okay. And it’s really, it also is like failing.

It was also a lot of failure that really pushed me to try to figure this out. I can talk more about that. that’s… Anyways, it was like falling flat on my face that really caused me to say like, you really got to figure this out because you left like a great salary working at Deloitte, working at the startup. Like you did not get into this business for a hobby. You did this to create a life for yourself and your team. And you’ve got to figure it out.

And I knew the whole was the financial piece for me. And I had to figure out how to live it. Sure. Well, I’m glad you took the class twice. I’m little embarrassed that I was on your TV set. Living room? That’s so funny. Well, I think you hit on this, but why is it so important to learn how to run a business versus just being a great designer? I think for me,

have not gone to interior design school. I didn’t work at another firm before. And I think if you have that skill set, like, and you know the business, like you’re a double whammy, right? But I think in order to really have an understanding of like, how you are going to get to where you want to be in life, like, and how you want to support your family or

support your lifestyle. it’s so you do have to work backwards. Like if you want to live a certain way or be able to provide for your team, like it’s so crucial for you to have an understanding of like what size project do you need and how many of them do you need? For me, more than anything, what I’ll say is that like, okay, so I’m too, this was two and a half years ago in the business and I’ll tell you a story.

I got a new office space and I hired a new person and I did that very blindly. Let me let me throw that out there. I was just like, I’ll figure it out again. That like unbeknownst confidence that I have. was like, figure this out. And what happened was that I had two employees, a new office space, and I had it within six months. I had nine bids that I sent out. And up to this point, I had been signing everything.

Well, what I didn’t realize now is I was kind of moving into a new clientele. And of those nine bids that I sent out, I only signed two of them. One was my mother -in -law’s guest bedroom. And I think she really felt bad for me. And honestly, like she probably felt bad for me. And in that moment, not too long after too, I only have two jobs. I thought I was going to sign them all. get all this overhead and I had a project put, you know, a whole home of furniture on hold. And it really made me realize like Ali, like,

You have $30 ,000 in the bank account, which full transparency is not all profit and it’s not yours. Like you have got to figure out like what size projects for your size firm do you need? And I was chasing all of these, like the nine jobs that I was chasing while I was getting considered for these larger projects. I was writing off all these small jobs. Like, and when I say small, mean like.

You know a living room when in reality like the size of the firm that I had like those smaller jobs would have been profitable for my firm so I really had to take a lens and look at my business and say what is my business need in order to be profitable rather than just chasing all of these big jobs and not building to understand that like. It takes time to to get that level of job and.

you don’t need that size job in order to run a profitable business. And so it took me like that experience of falling flat on my face and having only $30 ,000 in the bank account and just writing off all of these potential jobs that would have been really profitable for me because I was chasing all the big ones, not realizing like what I needed for my size business to be able to like continue to grow.

that’s probably a really good example of why I think you should know your business and what your business needs in order to not only run but be profitable because it’s so different from firm size, location. It’s really important for you to have an idea of what are the numbers you need to do in order for you to grow your business. I would even say just break even.

Well, exactly. And if you look at the stats for all businesses, it’s only, I think it’s 40 % are profitable, 60 % or not. So we’re talking across the country, millions of businesses. That’s true. And so the reality is the fact that you’re thinking about that is a different mindset than almost all designers out there. So I hope everybody listens to that and pays attention to that because honestly, you’re in the business to make money.

And you just happen to be doing something you love. So enjoy that. But just remember, this is a business. It really is a business. And if you do it the right way, you’re going to have a make a lot more money. And we have had so many people make so much money in this business. This is probably one of the most lucrative lucrative businesses that you can possibly run. And so if you know how to run it optimally, you’re going to do very, very well for yourself.

It’s a complicated business, too. I’ll say yeah, it’s really complicated. but it is it’s unique. Like what businesses do you have the opportunity to not only sell the service that you’re doing, but also sell product. It’s really unique. And like, I can talk like numbers all day. But like, the reason I ended up getting into this business is, you know, I come from a hospitality like

want to truly help people better. And like that’s my like sole mission in life. It just so happens that interior design is something that I naturally had a good eye for. But like I probably could have gotten into any business that allowed me to help people better. And when I say help people better, it’s not just about it’s about creating a seamless and stress free client experience. It’s about giving them a more personalized design and saying like, hey,

Are you on the left side of the vanity or the right side? Are you left handed? So we’ll put the hairdryer on the left hand side of this drawer. Like, it’s about helping people better. And it’s not. And I really could have done that in any business. But that’s truly what I’m passionate about. And if I’m going to use my passion to also, you know, generate income, like what better thing to do it with than something that you really deeply care about? So yeah, I

sometimes I feel like I can go down this like numbers rabbit hole and everyone’s like, my gosh, this girl’s just trying to like grow. But it’s like, I’m truly just so passionate about people and this business. It really is like that’s what makes us different at the end of the day. I don’t mean to poo, but like interior design, like we all are providing like a commodity and a sofa. So when you think about it, it’s like, what makes us different amongst each other is

how we provide that sofa. Is it an English rolled arm? Is it the way that I take you to our workroom and let you sit and experience it? I really think that interior design at the end of the day, what makes us all different is truly who we are and the level of service that we provide that’s connected to that commodity, like a sofa or a house. I couldn’t agree more. I think you’ve hit the nail on the head with that one. Well,

Let’s talk about inspiration. So what inspires you besides travel, popcorn and plants? believe those are the things you mentioned before. Yeah, no, that’s a really great question. I’m really inspired by like, if you were to scroll through like my TikTok or like my Instagram, Reels page, like I’m really inspired. I think from a travel side of things, like English and like old world design is really much at the forefront of like.

where I’m pulling inspiration from, from a design lens. I just think that we have so much of the timeless materials that are used when we look at old world design that can be so much a statement, but also something that’ll stand the test of time in someone’s home. So from like an inspo travel standpoint, there’s that. The other thing that you’ll see as I scroll through my TikTok is I’m very inspired by like kind leadership.

And it’s something that when I talk about helping people better, I’m so passionate about serving my clients, but I’m extremely passionate about serving my team. And that’s really what like it kind of you can see my arms, I have goosebumps right now. Like I just, I’m really, I want to serve people better. And it’s not just my clients that serve my team and give them a place that they really love to work and give them a place that they, they,

feel like they’re getting paid fairly, that they’re happy, that they are excited to help us grow. Being a kind leader is something that really inspires me to support my team and not only support the growth of our business, but the growth of them, each as individuals. What’s your big vision for the future? Remember when I told you that moment where

I had only $30 ,000 in the bank account and I was like, okay. So when that moment happened to me, I was like, okay, we’ve really got to like figure this out. And I went through a lot of, I used your lead tracker form. Sorry, I’m like giving you a lot of good notes right now, but it’s so true. I was using your lead tracker form and I realized that 50 % of my business was coming from Instagram. So when you asked me about my vision of the company, I got really clear like,

two and a half years ago. And I really do think that getting so clear on my vision is what has like propelled our growth. And what I did is I was like, okay, a 50 % of our business coming from Instagram, how much billable time am I spending on that? Great, I’m gonna outsource this and pay someone to go do that. Because I need to buy my time back to work on other parts of the business. Well anyways, when I hired someone to help us with social media, I said, hey, her name’s Anne, she’s full time with us now. And I said, Anne,

I know what my like 10 year goal is. I know what my big vision is for this company. I in everything that we do our why is helping people better. So I was like, let’s position ourselves on Instagram and tell people like tell our ideal clientele like, here’s how we’re going to help you better. Here’s what our client experiences. And then I was like, I do want to help like, you know, other people build their businesses better one day, like, again, that common thread. So it’s like, why don’t we put out this information, I think

I think other interior designers inherently will be interested in how we operate. It’s not gonna be marketing material that speaks to them, but I do think it’s gonna help them. So I was like, okay, let’s build the interior design firm that’s gonna help our clients better, help our team better. Let’s then look at the second vertical. It’s like, I don’t know what it entirely is right now. Maybe it’s something to help interior designers better. And I don’t know if it’s like a template that we’re selling on.

I right now speak at workshops and that’s really fulfilling for me. I speak at local colleges. And then my third vertical that I want to build is like, okay, if I’ve helped all these people build businesses, I want to give them a tool to run their businesses better as well. So my big grandiose vision is like, is it a tech platform that helps them run their businesses better? Everything when I think about the big vision of this company, it’s all tied back to that.

And going and I will say almost hitting that like rock bottom in that time of my business made me really intentional with like, why was I doing this? And how was I going to think about the growth of the company? And it needed to be all tied back to something. wish me luck. I know I’m going to do it. You’re going to totally do it. I know it.

All you have to is have that vision and just have a plan. If you have a vision and a plan and you’re determined, you’ll do it. So I’m not concerned about it. Yeah. So my vision is get all of the right team into place right now. That’s like really my vision and focus is like really building a strong team so that I can then start to, you know, over the next few years, look at how to create those other verticals that I was talking about. Absolutely.

Well, how have you built such a big following on social media so quickly? So I would say it again, it’s like when you hit a lot of the times when you almost like hit rock bottom, I genuinely to like, I guess it was not, it was like a year and a half ago that this all happened. Like I thought the business was either going to grow or die and I had to do something different. Like I couldn’t keep doing the same thing over and over again. I lost seven jobs. Like

I needed to do something different and I think it goes back to like my confidence of just I knew when I started this business, like if I’m gonna do this, I am going to be unapologetically myself. Like especially when it’s a service -based business, that’s so much an extension of yourself. And I thought about like, should I show that I drink?

monster energy drinks and this is my toxic trait. Should I show people that I eat Taco Bell? I do curse a sailor from time to time and do I show that? Yeah, do I show that on Instagram? And I think that it’s so much easier to just be yourself more than anyone else. And I chose very early on when I started building my Instagram that I wasn’t gonna try to be everything to everyone.

Like I was like, if that turns someone off, they’re probably not gonna be like the fun client that I wanna present to and make a margarita for later. And I think that the following really came into play too when I looked at how my time was being spent and when I hired Anne and I said, I really want to show people how we do things differently, not just the pretty photos. And that’s really, took us,

I will say this from like a social media standpoint. I have people ask me all the time, like, how did you grow? Like I hired Anne and it took us nine months to grow 2000 followers. It’s taken us in a year and a half. We’ve grown like, like 30 K and like the past year and a half, but nine months in the beginning, it took us two. We only grew 2000 followers. It takes time to like build your audience and realize like,

But why I stuck out those nine months is not because our follower count didn’t increase, but our leads had doubled. Our leads had doubled. So it was worth it. But I really think the growth was tied to showing people how we did things differently. And it was something that a lot of people weren’t doing on Instagram in interior design. Like people were not doing reels of their construction binders. People weren’t showing people like.

the process of how to work with them. And I think it was unique and it was interesting to not only clients, but also the interior design industry. Well, and I think that’s, I think that’s brilliant because that is the defining difference between you and other people is how you do things, not what you do. Because what everybody does as a designer is pretty much the same. Maybe you have a different aesthetic and maybe you have a different,

you know, selection of vendors and subs that you work with, but in the end, you’re doing the same process. It just has to be, there has to be that defining differential that makes you the best at something. But here’s something else that I will say, and that is, listening to you, is that your interest in the numbers part is helping inform your decisions. And I think that’s a real critical factor that people need to think about.

is if you’re not comfortable with understanding your numbers and that’s everything, whether it’s social media, whether it’s how much billable you’re getting out of your team or whatever it is, you need to understand that numbers are, that’s the heart of the business that makes it work. And if you don’t know that part, then you’ve got to go figure out that piece. And you were very smart to latch onto that very early.

Yeah, like I said, this great group called the pro collective helped me with all these resources. But serious, it’s, I do think that the crutch of it all is like, what helps you make take these risks is like, they’re informed risks. Yes, like, there’s no doubt that like going and hiring, you know, someone for social media, that’s a risk. But if you have the data that saying like, hey, that’s

If your time would be a lot better spent doing something else, go hire someone to go do that part. And I think that’s just like so crucial to like grow. How else are you going to grow? You’re going to keep doing the same thing over and over again if you aren’t paying attention to the numbers. Absolutely correct. Well, I love it. You’ve given us a lot of great nuggets and I’d like you to pick three that you would like to highlight.

that you think are the most important things for people to pay attention to from this podcast? Yeah, what? Okay, let’s see here. I would say number one, you just need to know enough to be dangerous to start. Lean on resources. There’s so many vendors, coaches, people who want to work for other people. There’s so many resources out there to allow you to learn on the fly.

The second thing I would say is know your data and know your business. Because again, 2 .5 years ago, I was chasing all these big jobs because that’s what the other firms that I wanted to be like were doing. those jobs didn’t end up working out for me, I overlooked all of the jobs that were actually extremely profitable for my size firm.

Try to say know your data and know your business. And then three, what would I say? I would say that hire people who are smarter than you and get out of their way. Perfect. Yeah, hire people. Hire smart people. Absolutely. And get out of their way and let them do their thing because the more that you empower them and…

It’s just going to go a long way to not only giving you the fulfillment of seeing your business grow, but also fulfill them and letting them use their superpower. Awesome. Allie, this is great. Thank you so much for being a part of our podcast. We appreciate it. I know a lot of people will be inspired from what you shared today. Absolutely. Well, absolutely. I hope I inspired people. Not absolutely. No, thanks so much for having me. I really appreciate it. Of course.