business advice | Jan 11, 2022 |
How do I structure my business to ride the omicron wave?

Dear Sean,

With the omicron variant sweeping through the country, I am worried that we will be back to “business as usual” as it was in January 2021. Already, two of my employees have tested positive, and several of my production partners have noted that they might shut down in the next few weeks out of “an abundance of caution” (a phrase I now despise). My clients, understandably, are worried that their projects will be delayed even more than they already have been—and potential clients have said that they might just “wait and see” before getting going.

How do I navigate the next phase of pandemic entrepreneurship?

Frozen in Place

Dear Frozen,

Nothing like a healthy dose of PTSD to welcome you to 2022. I am sorry to all design businesses for having to deal with this new reality. There are a few things to remember, though. First, vaccines work, which means we are not in the same place we were at this time last year. So while this stage might be painful, it is temporary, provided you are in a part of the world that is committed to vaccination (including boosters).

That’s cold comfort, I know, especially in the face of employees testing positive, production partners threatening further delays, and new clients postponing or even cancelling their projects. However, I’d encourage you to see these challenges as an opportunity to meet the moment and make your business less vulnerable to disruption.

One of the biggest changes to make now is to adjust the way you charge. If you happen to earn a substantial portion of your income from a markup on materials, you’re likely confronting the inadequacy of operating this way now. Think of yourself as an agent, not a retailer, and banish the term “markup” for good. Instead, define that percentage as what you need in order to manifest your ideas via production.

In normal times, when you could expect a reasonable window for production, your commission model worked. However, COVID has demonstrated that with extensive delays, percentage pricing is a disaster. Simply, earning that markup in, say, six months is just not the same as making it in 12. Let omicron be a reminder that your production fee needs to be a set monthly number based on a reasonable expectation of time to complete your production. If that time extends through no fault of anyone, then the risk is shared, in that the monthly fee continues. Fair is fair.

Next, if clients are postponing starting projects, they will need to understand the risk they are taking. If they signed today, design would occur in the upcoming months—and COVID would do nothing to slow this process down. No one knows what the world will look like come spring. Perhaps supply chain issues will remain, or maybe they will improve. What we do know is that these clients will be additionally delayed because of their hesitation. You should absolutely be able to explain this risk to them and stress that now is the time to design, and that COVID truly has nothing to do with it.

And as for employees out with COVID, don’t despair. Presuming full vaccination, we are talking about 10 days—time when they may be entirely available virtually, depending on how they react to the virus.

As you clear your head from the last years of PTSD (which is incredibly real), might I suggest three things? First, the delays in production you might face from omicron are likely being borne entirely by your firm—clients do not have their goods, so you are not making any additional money. Second, the world will have a new reality when you complete design for new projects three to five months from now. That new reality will offer new insights and new opportunity, so have faith that smart clients will realize the value of investing in your design work now. Last, conviction and clarity will yield a different future. We have all been through much darker days, and I am confident that the very painful time we are experiencing now will be truly short-lived. You need to continue to act accordingly.

What you cannot do, though, is stick your head in the sand or curl up under the covers. Meet the moment head-on with hard conversations everywhere. You are the professional in the room, and while nobody knows the future, your intention and strategy are everything. Find the opportunity for candor and authenticity and let that carry the day. The rewards might not solve today’s crisis, but tomorrow will be forever brighter because of your singular desire for integrity of purpose.

Homepage photo: ©Irabel8 / Shutterstock

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Sean Low is the the go-to business coach for interior designers. His clients have included Nate Berkus, Sawyer Berson, Vicente Wolf, Barry Dixon, Kevin Isbell and McGrath II. Low earned his law degree from the University of Pennsylvania, and as founder-president of The Business of Being Creative, he has long consulted for design businesses. In his Business Advice column for BOH, he answers designers’ most pressing questions. Have a dilemma? Send us an email—and don’t worry, we can keep your details anonymous.

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