magazine | Dec 21, 2022 |
Procrastinating on your business plan? Here’s how to get started

Want to do the work you love on your own terms? The right business plan might be
your most powerful tool to get there.

Whether you’re just starting your design firm or you’ve been running one for years, a business plan is critical to achieving success, regardless of how you define it. Creating one—no matter how daunting or unglamorous a task it might seem—will bring powerful benefits to you, your firm and your clients. Think of it like this: If you love your work, a business plan will underpin your ability to continue that work, on your terms, for years to come.

The Risks of Flying Blind
Interior design exists at a unique intersection between business and artistry. Many designers begin their firms with the hope that their creative skills will be enough, trusting that the rest will fall into place. And while that might be true, a trial-and-error approach is all but certain to cost you dearly in time, money and mistakes before you find your sweet spot. Business coaches who work with designers report seeing many of the same challenges arise with their clientele. Often, it comes down to simply ticking off key tasks in the wrong order—a mundane mistake that can have surprisingly serious consequences. “People go out and create a website and a logo and start marketing their business without really understanding who their audience is, what the pricing should be or what their sales structure should look like,” says Monique Nicole, a designer based in Hampton Roads, Virginia, who runs her own firm in addition to offering business coaching. “They end up spending a lot of money with little to no results. It really sets them back, and then they end up having to rebuild the business.”

Scottsdale, Arizona–based interior design business coach Melissa Galt has a term for firms that fall into this category: Groundhog Day businesses. “They recycle the same issues, the same problems and the same types of clients over and over,” she explains. “They’re not getting enough perspective to see what they need to do differently and they don’t have a larger plan or vision to refer to, so they’re just staying on the same path.” The hallmarks of businesses stuck in this cycle include revenue stagnancy, minimal growth (less than 10 percent each year) or habitual, extreme ups and downs. “That is not the way it’s supposed to be,” she says. “Business should be about creating something of value, and that value should increase year over year.”

For firms caught in this loop, the struggle is often exacerbated by being underfunded and understaffed, says Tobi Fairley, a designer and business coach based in Little Rock, Arkansas. “The number one problem with creative small businesses is that people open up shop without a budget—they don’t have any capital and they are doing it on a shoe-string,” she says. “They end up wearing all the hats themselves and spending their own money. Designers will hobble along like that for years, thinking, ‘Surely this will be the year that I turn a profit.’ That’s where a business plan is really helpful: You can get a 40,000-foot view of your company and have an idea of what things are going to look like over the next several years, including how much money you need to create the business you want.”

While every design firm owner will have their own version of success, most can agree that merely making ends meet is a far cry from the dream. Achieving a breakthrough, says Galt, almost always comes down to a fundamental strategy shift. “There’s a big difference between being in motion and taking strategic action that will deliver a result,” she explains. “There are a lot of designers who have daily checklists and agendas that are not getting the results that they want. A business plan helps you to set a goal and a result that you want to reach.”

Get Your Bearings
You may know you need a more focused way of running your business—but how do you get there? To start, you’ll need to answer some philosophical questions: Where do you want your business to be in one year? How about five? What role do you want to play in that business? What types of projects do you want to take on? And what makes your firm unique? Gaining a better understanding of where you fit into the marketplace, how you stand out from competitors and what success looks like to you can help refine your marketing strategy, which is a major component of a successful business plan. “What I like people to start with is: What do they want?” says Fairley. “A lot of people don’t know—especially women, which most designers in America are. Culturally and societally, women are told to dream big, but we don’t really clarify what that’s going to look like. So the first thing you have to do is make some decisions about what you want, even if that will change later.”

The next step is identifying your niche and the type of client you want. “I think understanding that element is the most important piece of building a business because it dictates everything else that you do,” says Nicole. Once you target your ideal client, you can figure out how to position yourself and your skills to attract those clients. Knowing that you love designing children’s rooms, for example, means you should focus on working with young families, develop relationships with vendors you’ll need to do that work and create your marketing materials, a pricing structure and services around that demographic.

If you have trouble narrowing down your vision, Galt suggests asking yourself a series of questions about the work you do—and, just as important, the work you don’t like to do. If you want to, say, focus on residential work, do you want to do more renovations or new construction? If you want more commercial work, is that hospitality, healthcare or corporate offices? “The more clarity you can give yourself, the better,” she says.

Then take those answers and go further: Beyond the kind of work and clientele you want for your firm, what do you most want to do? Do you love the creative aspect above all? Do you like interfacing with clients, or would you prefer to stay behind the scenes? Enjoy tackling administrative details, or do they give you a headache? “It’s very important to understand whether you’re going to be the creative director or the CEO,” says Sandra Funk, a designer and business coach based in College Grove, Tennessee. “Ask yourself, ‘Where is this going long term?’ While you might not be able to come out of the gate hiring five employees and in a position to take the role you want, if you know where you’re headed, you are a lot more likely to actually get there.” 

Once you have a sense of what you want your business to look like, it’s time to zoom out and size up your competitors. If that doesn’t sound fun, you’re far from alone, says Galt. “Designers are often intimidated by what others have accomplished, or—this is my favorite explanation—they’ll say, ‘I don't have any competition.’ I love that line because it is kind of true. You should be hired not just for your talent but for your personality, your ability to connect and communicate—all those things are uniquely yours. But you still want to know, ‘Hey, what’s this person doing over there?’ Because a potential client may not see the difference between you and someone else as clearly.” And it’s your job to spell it out for them. 

Researching your competitive set is one area of business planning where it’s wise to cast a wide net. If you’re at a loss, start by checking out designers in your region or, in the boundaryless era of Instagram, firms across the country that are stylistically similar. “When you know what everyone else is doing, that’s a way to get inspired and shape your moves accordingly,” says Galt. 

What, exactly, are you looking for? Galt says it’s important to check out competitors as a source of inspiration, not plagiarism. As you look, ask yourself if you can identify a designer’s ideal client by reading their website. Designers are often woefully generic in the language they use to describe their businesses, but specificity—and presenting yourself as a specialist—will help you stand out from the crowd.

If you are reluctant to go niche with your offerings, Funk argues that specificity can also come in the form of showcasing your personality—something she doesn’t think designers do enough of online. In the end, the goal is the same: “You want people to see themselves in the copy on your site,” says Galt.

Procrastinating on your business plan? Here’s how to get started
In a seaside bathroom by Tobi Fairley, a palette of powder blue and soft vanilla hues mingle for a serene effect. Nancy Nolan Photography

Scope It Out
Once you’ve identified your business goals, your niche, your clientele, your role and your competition, congratulations—you’re halfway there! Now it’s time to flesh out the details and put everything in writing. Among the key factors to consider are your plan’s time frame and your financial goals.Ideally, business owners will have a long-term plan as well as an annual one. When establishing your bigger-picture vision, Fairley says five years is a helpful target. “It’s good to look at a longer period to understand your need for cash and operating,” she says. “You need to know how you can best invest in a business, and at what point you’ll be able to do things like get a new website. Can you hire somebody this year? Can you invest in a showhouse? If you plan for what you want to do in the coming months or years, you can earmark funds for certain projects.”

Galt suggests creating an annual plan and updating it quarterly, which gives designers 90 days to fully test any strategy and determine whether it’s working. “That’s the key to a thriving business,” she says. “You want a plan, but not a rigid plan. It’s a flexible roadmap, because the world is constantly changing—and our industry is constantly changing, too, so you want to be open to opportunities that you didn’t expect. Think of it as a blueprint that’s regularly updated.”

That quarterly tweak can also help you maintain a work-life balance by nudging you to take a bird’s-eye view of your business on a regular basis. “When you think, ‘I want to take a Christmas vacation with my family this year, but how can I do that?’ you’ve already allotted that on your calendar and can adjust your plan to make sure that the revenues are in the door or you have an extra team member to make it happen,” says Galt.

Taking an if/then approach is also wise when it comes to the budget section of your plan. A business plan is not a substitute for a financial plan—ideally, the two should go hand in hand—but in general, having structured spending in mind for uncertain times can help you keep funds set aside for specific purposes that are outside of your need for operating. “That type of clarity gives you so much peace of mind,” says Fairley. “A lot of people try to avoid the numbers because they think they’re scary, but it’s so much better to have clarity if you want to relax about the investments and decisions you’re making.”

But what does a plan actually look like? While there’s no one right way to structure the plan, you’ve got options if you’re looking for a starting point. Business coaches often have their own bespoke guides for creating a business plan—Galt, for example, has been using an extremely detailed eight-step guide for 15 years. For a more DIY route, the Small Business Administration has free templates that can help entrepreneurs navigate the process.

Long before she launched a coaching business, the SBA is where Nicole turned when she was creating her first business plan and pursuing a startup loan for her design firm. Following the agency’s recommendations, she outlined the key components of a business plan: an executive summary, which features a mission statement, description of services and financial goals; a company description outlining the qualifications that set your business apart and will make it successful; a market analysis of your competitors that identifies your points of differentiation and ideal clientele; an organizational chart (even if it’s aspirational because you are a sole practitioner); and a sales and marketing strategy.

For designers in particular, the products and services element of a business plan is critical. “I have a lot of [designer clients] who started out [sourcing products from] retail because they didn’t know that there is a trade angle in this industry that’s important to profitability and to uniqueness,” says Funk. That ties into the market research and analysis component of a business plan. “Designers should be getting a tax ID and tapping into trade resources so they can offer customization.”

A Fluid Approach
No matter how you structure the nuts and bolts of your business plan, business coaches universally insist that the plan be a dynamic document. The downside is that if you were dreading the process and hoping to get it over with quickly—well, that’s not how it works. Instead of thinking of it as a chore to finish and file away, think of your business plan as your firm’s proverbial north star, a valuable resource and reference point to consult periodically so that you can make sure you’re on track and adjust as needed. The fact that it requires regular updates is a good thing, because it invites you to reflect, which will only be a boon for you and your business.

“I always tell designers to check in when they do year-end budgeting and planning and ask themselves, Do you still want the goals you set last year?” says Fairley. “Another time people need to reassess is once they hit a lot of their big goals. This happened for my firm about five years ago—I was like, ‘OK, I wanted product lines, I wanted to do showhouses, I wanted to be published in magazines.’ Fortunately, I had achieved those results with the help of an amazing team. But what now? If you don’t stop and do the hard work of reevaluating where you want to go next, you may fall back into the pitfalls that come with making decisions as you go. And a lot of times, your revenue can start to backslide as a result. If you’re not going forward, you’re possibly going backward, because rarely are we truly standing still.”

Homepage image: Designer Sandra Funk employs bold details on a small scale to create an inviting and contemporary dining room | Mark Weinberg

This article originally appeared in Fall 2022 issue of Business of Home. Subscribe or become a BOH Insider for more.

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