Quick poll: Do you have a business plan?
If your answer is “What business plan?” you are not alone. Plenty of designers paid $50 for their resale tax license, opened a checking account and hung their shingle without a business plan. You might be one of them.
Can you truly be successful without a business plan? Maybe, but the odds are stacked against you.
What is a business plan?
A business plan is a document that outlines your company’s objectives and goals—and your path to achieving them. That may sound daunting, but knowing what to include is half the battle.
Why do you need a business plan?
It may seem like a tedious process, but writing a business plan forces you to think through the factors that will ultimately lead to your success. Do you have enough cash to pay the bills for the next three to six months as you start, or as you grow? Do you know how to get clients? Do you know who your ideal client is? Do you know who to hire? Do you know when you can afford to hire?
What should you include in your business plan?
- Executive summary: Write a description of who you are and why you are the right person to run your company.
- Products and services description: Explain what you offer to your clients.
- Company overview: Express what is special about you and your business, and why you are competing.
- Market analysis: Give an overview of the industry.
- Competition: Identify the key players working in your market.
- Marketing and sales: Create a plan to get clients.
- Benchmarks: Establish metrics so that you (and your investors) will know if you’re successful.
- Financial model: Calculate how much it costs to run your business, and what it takes to make a profit.
- Appendix: Include any additional details.
Do you have a contingency plan?
One thing that’s often missing from traditional business plans is the “what if?” scenario. In essence: What happens if things don’t go as expected?
That’s your contingency plan.
The industry’s many ups and downs in recent decades have shown just how important having a Plan B can be. In my own design business, my clients stopped their projects after 9/11 because they felt guilty spending money on themselves. As a result, I had to lay off employees and get out of my expensive office lease—a humbling experience.
Amid the 2008 recession, approximately 40 percent of designers went out of business because clients stopped spending. More recently, Covid forced designers to pivot to remote work, something most had no experience with before. Supply chain interruptions also made business challenging, and designers struggled to explain why it would take 12 to 18 months to get furnishings. Learning how to handle disgruntled clients became the norm.
Today, designers and their project timelines are impacted by interest rate and inflation challenges, which have led to sleepless nights and financial woes.
My favorite mantra is “Market when you’re the busiest.” The idea is that you go looking for future work before you need it. But if you didn’t do that, it will take time to restoke the pipeline: attending every possible charitable and networking event, reaching out to past clients for referrals, and discussing additional scope with current clients. If you are a solopreneur, you should plan to spend at least 10 hours per week marketing your business. If the pipeline is dry, stop all spending except marketing—that’s the last place to cut your budget—and promote your firm full-time.
A contingency plan doesn’t predict external challenges, but it will give you options so that you know what to do in case things don’t go as planned. You’ll have peace of mind because you’ve already accounted for the unexpected, which will allow you to take action quickly and definitively.
For insights and analysis on how designers across the country run their firms, download the 2023 Interior Design Business Survey report, presented by Pearl Collective, Interior Talent and Business of Home.
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Gail Doby is co-founder of Pearl Collective (formerly Gail Doby Coaching & Consulting), an interior design business consultancy that helps designers, architects and other creatives increase their profitability. Doby ran her own design firm in Denver for nearly 20 years and has a degree in finance and banking. Since 2008, she has been helping designers scale their businesses profitably and reach financial freedom. As a coach, mentor and business transformation specialist, she shares innovative ways to overcome the roadblocks, challenges and detours creative entrepreneurs face. She is also the bestselling author of Business Breakthrough: Your Creative Value Blueprint to Get Paid What You’re Worth. Her goal is to empower design industry clients to differentiate themselves, drive measurable results, achieve business projections, and create personal satisfaction through game-changing strategies and business practices.
