Most of my projects are very high end with budgets always higher than $450,000. Lately, I have been getting inquiries from potential clients with significant budgets—let’s say up to $250,000—but not enough for me, personally, to be able to do what I do. I have a staff of two junior designers and one project manager/administrator. I really do not want to let these projects go, but know I cannot do them myself. Can I turn these projects over to my team and just give them a once-over, or do I have to continue to turn them down?
You need to look at the bigger picture here, Big Money. What you are actually talking about is deciding whether to start another business, not whether to simply take smaller projects. The value you deliver and your clients’ expectations are not the same for both of these budgets. Making the larger decision about whether you wish to be in this new business rather than whether you should take on a particular project will help shape your thinking. (For our purposes, I am assuming your junior designers and your project administrator can handle these projects well.)
A few comparable examples will help frame the conversation—consider a couture fashion line launching a ready-to-wear line or a high-end restaurant deciding to open a café. In each case, there are four considerations you must contemplate.
First, will this new business serve your core business, and vice versa? In your case, will these smaller projects still be something you would be proud to put your name on? Clearly, the larger projects support the value of the smaller ones.
Second, can you sustain your pricing in this new business? There is rampant competition for smaller-budget projects, from retailers to sites offering design services to up-and-coming designers. If your price will ultimately be too high for the client, you cannot start this business, since you will be at the mercy of competition. On the other hand, if you are confident you will be able to keep your prices what they need to be for the project to make sense for your firm, keep going.
Third, can you scale fast enough? For example, if you need to sign on five of these lower-priced projects each year with budgets of at least $200,000 to earn what you’d need to be earning, and you only make it to four, not five, of these projects within that one-year timeline, you must commit to shutting down this part of the business. If you do not, you will be in no-man’s-land, and that will start to draw resources from your core business and jeopardize both.
Lastly, can the business stand on its own? At a certain point, the business needs to stand on its own with its own value proposition separate from your core brand. Emporio Armani matters just as much as Armani Couture; Thomas Keller’s Bouchon just as much as The French Laundry. If the new business will never be anything other than a side note to your core business, no matter how big it gets, you will always be forced to tend to it exactly when you do not want to.
If you can answer all four of these questions positively, then go for it! Start the new business. If not, then let the opportunities go, as they will create more pain than gain.
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 EAL, he answers designers’ most pressing business questions. Have a dilemma? Shoot us an email—and don’t worry, we will keep your details anonymous.