David Shepherd is a consultant whose practice focuses on the interior design industry. David’s company, Designing Profits, Inc., provides business and financial strategies to interior design professionals through its life-changing Business of Design Conference held each September in Las Vegas. His company is based in Austin, Texas. He is a frequent contributor to industry publications to help interior designers succeed.
Q: As an interior designer, should you be concerned about a slowdown in the economy?
As a professional businessperson, you should be constantly on the lookout for trends that may affect your business. However, the most dangerous thing you could do right now is “assume” that the economy is going to get worse and that your business will suffer because of it. That need not be the case. First, since the same people who projected the Democratic primary results in New Hampshire are projecting economic trends, let’s not take any media hype too seriously. They may be right and they may be wrong, but we certainly know the media will hype anything all out of proportion.And let’s get one fact out of the way immediately–the super rich (your ideal customers) are not suffering. A recent article in the Wall Street Journal noted that while houses under $3 million are affected by the real estate decline, houses above that–especially in the $20 million and up range–are selling briskly. And the New York Times noted that while even a luxury purveyor like Tiffany’s had a huge drop in sales before Christmas, the drop was exclusively in products under $10,000. Products over $50,000 set record sales.That’s why at the Business of Design Conference next September, we’re going to make sure every attendee leaves with the skills necessary to dramatically increase the average net worth of their ideal customer. After all, the clear number one factor in profitability is client selection.
Still, the perception and trickle down effects of a slowing economy will undoubtedly cause some clients and prospective clients to pull back, to at least go into a “wait and see” mode. While some areas of the country seem to be expanding rapidly, others are definitely stalled. We’re well aware of designers who have seen slowdowns and even had jobs cancelled in some areas, most notably Florida.
So let me give you three things to focus on if you think your business might slow down or even if it already has:
1) Work your tail off. Do you see the schedule that these presidential candidates keep? The 10+ appearances per day! I can promise you that very few designers are willing to do that for even 60 days, but if you will–even if you get almost no business from it immediately–two years from now you will have created opportunities that will leave your less ambitious competitors in the dust.
2) Embrace any down time as an opportunity to make those improvements to your technical systems and infrastructure that you know you need to make. I’m amazed at how many of my most successful design clients say that they used the slump that followed 9/11 to install software, train on CAD, write up job descriptions, develop new Web-based and marketing materials, etc. In other words, when others are pulling back, invest, invest, invest!
3) Change your business model. I’ll have more to say about this in future newsletters (and a lot more in Las Vegas next September) but keep in mind that the successful business models of the past will simply not work in the “new era” of interior design. You must understand fundamental concepts like your “profit pools,” that is which products and services can continue to grow in profitability as others fall by the wayside. You’ll also need to understand how to create a basic breakeven analysis and budget–even if you are a sole practitioner!
So is it likely that a softer economy will impact your firm? Yes, but you can make that impact positive. And by the way, if the pundits are wrong and the economy roars to life in just a month or two, do you think these three things I’m recommending will have been for naught?
I didn’t think so.
President & CEO
Designing Profits, Inc.
David’s message is clear – we need to look at our businesses differently. We are both focused on supporting the interior design industry. If you sign up for the RSS feed, we will be updating David’s September conference information.
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About the author: Gail Doby is a seasoned, high-end residential interior designer that sees the need for education on the new economy for interior designers. The newest division of www.renaissancedesign.com is Design Success University, a supportive and educational online resource that is “Inspiring Your Design Success.”
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