What is the one area of expertise that you can own? Is it modern design? Fabric design? Furniture design? Answer these questions, and you’ll be on the right track to doubling your design business revenue. “Never underestimate the power of niche,” says Sean Low, founder and president of the Business of Being Creative, an advisory catered to those in creative fields. “Make that your strongest asset, in fact. An essential way to increase your revenue is not to make an outrageous promise to reach X target or have an I-can-do-it-all kind of attitude, but to hone what got you a head start to begin with. Only then can you really go all out in your ask.”
And expect high gains in return. “Clients have no qualms in paying for design or products they think are extraordinary,” Low says. Specializing in one area or set of skills will lead clients to see your business as distinctive and more valuable, he explains. “Don’t go for, ‘I am the best designer in the world,’ but for ‘I am the best designer in this particular field.’”
It’s one of the many shifts that Low and industry creatives recommended to get set on a path to increased profits. While taking an audit of your firm and its processes is never a low lift, these changes can make a big difference on your bottom line. Read on for actionable advice from industry pros that will get your firm in tip-top shape.
Take an Internal Audit
As is often the case, change starts from the inside. For Lisa Frantz of New York–based Lisa Frantz Interiors, scaling her business revenue began with refining her organizational chart. “I’m a big believer that you have to spend on your staff to be able to handle different jobs,” she says. “I try to keep the size of my firm between four to seven high-paid, highly skilled people at all times.” She hires freelancers when workloads require it, but that sweet spot has allowed the firm to stay lean, work succinctly, and maintain morale. “Developing a really strong core staff that will stay with you for a long time is so important,” she says.
Not every role on that core staff may be billable—and that’s okay, says Frantz. A director of operations can be just as pivotal a figure to have on one’s roster. “A good operations manager puts tight systems and processes in place, essentially creating a blueprint for how you do a design project,” she says. “That’s how you can do multiple high-profile jobs and meet your targets.”
Attracting those high-profile projects brings to question another area of review: How is your firm’s brand marketing holding up? In the digital age, making a first impression may happen before you even meet a potential client so it’s important to consider the brand identity and experience your firm is projecting. “Branding, corporate identity, social media posting, the way you do your presentations—everything works towards raising your position in the market and the reach you have,” says Kevin Isbell of Los Angeles–based Kevin Isbell Interiors.
Review Your Rates
Understanding your value, as Low previously described, is just one part of determining your interior design fee. How you charge could be obstructing your business revenue potential. “Let’s say you have a project and make 45%, but [you] don’t sell anything into it—no custom work or built-ins—because you’ve used external partners. Your margins will stay at 45%,” says Low. “If, on the other hand, you make or source the products yourself and then sell them within the project, you’ll make extra on your original 45%. That’s where growth really happens: Expanding what you can offer within your niche allows you to charge more for your services.”
Optimizing your time is also essential to raising your profit. “If a designer can ensure that he or she can finish a project within the timeframe they set and charge 25%, they’ll make more money than peers who might charge 40% for a similar project but take double the time to complete it,” Low says. “Don’t extend work past due dates, and you’ll be able to create sustainable business processes in the long-term.”
Achieving your target revenues begins with working backwards. Ask yourself two things, says Low: How much do you want to make? And how much time do you want to spend working? “Example: If you want to take home $800K and have $400K in expenses, your design business needs to generate $1.2M, or $100K per month,” explains Low. “If you would like to have six projects per year, each project needs to bring you $200K. How you go about getting the $200K is the story of your business, but $200K is the right number because you have decided upon $1.2M and six projects. If that is 50% more than what you are currently doing, so be it. The right number is the right number.”
The Business of Relationships
With your benchmark of doubling your revenues set, draft a list of key performance indicators (KPIs) that will help get you to achieve that goal. Keep in mind, as Frank Ponterio of Chicago- and Naples, Florida–based Frank Ponterio Interior Design points out, not all of those metrics have to be quantitative. “Many people measure profitability in terms of numerical benchmarks, but for a lot of creatives, the focus lies on their overall performance and the customer experience,” Ponterio says. “Once you work on those aspects, growth is going to happen organically, and percentages are going to go up on their own.”
Frantz concurs, adding that “the client experience can really make all the difference; 80% to 90% of our new projects, for instance, come from referrals. So offering your customer something that keeps you fresh in their mind can really do wonders.”
Take her firm’s Client Experience Book, for example. At the end of each project, she delivers the client a handbook on how to care for their home, with basics like what to do if a drain clogs up or what brand their bathroom tiles are. “It’s simple, but it builds trust long after the project is over,” says Frantz. Even better? “It’s an effective way to create more leads.”
But not every project is worth taking. It may seem counterintuitive to your short-term revenue goals, but hear the pros out: “For any long-term growth to happen, choosing the right clientele is as important as having them choose you,” says Pontero. “If you don’t think a potential client is a good fit, it’s in everyone’s best interest to part ways. You need to find tools and people that allow you to leverage yourself and let you do the things you’re very good at.” In short, great clients lead to projects you’re proud of, and those projects strengthen your portfolio and could unlock opportunities for press or partnerships.
“Working with clients who don’t reflect your style and creating work that’s not emblematic of who you are as a company does nothing to your profitability,” adds Isbell. “So oddly, one of the best ways to grow is to say no.”