How to Open & Operate a Financially Successful Interior Design Business

How to Open & Operate a Financially Successful Interior Design Business:

By Diane Leone

How to Open & Operate a Financially Successful Interior Design Business: With Companion CD-ROM

Copyright © 2010 Atlantic Publishing Group, Inc.

1210 SW 23rd Place • Ocala, Florida 34471 • Phone 800-814-1132 • Fax 352-622-1875

Web site: www.atlantic-pub.com • E-mail: sales@atlantic-pub.com

SAN Number: 268-1250

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be sent to Atlantic Publishing Group, Inc., 1210 SW 23rd Place, Ocala, Florida 34471.

Library of Congress Cataloging-in-Publication Data

Leone, Diane., 1954-

How to open & operate a financially successful interior design business : with companion CD-ROM / by Diane Leone .

p. cm.

Includes bibliographical references and index.

ISBN-13: 978-1-60138-262-7 (alk. paper)

ISBN-10: 1-60138-262-6 (alk. paper)

1. Interior decoration firms--Management. 2. Interior decoration--Practice. I. Title. II. Title: How to open and operate a financially successful interior design business.

NK2116.2.R87 2009

747.068--dc22

2008035792

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom. The fact that an organization or Web site is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Web site may provide or recommendations it may make. Further, readers should be aware that Internet Web sites listed in this work may have changed or disappeared between when this work was written and when it is read.

A few years back we lost our beloved pet dog Bear, who was not only our best and dearest friend but also the Vice President of Sunshine here at Atlantic Publishing. He did not receive a salary but worked tirelessly 24 hours a day to please his parents.

Bear was a rescue dog who turned around and showered myself, my wife, Sherri, his grandparents Jean, Bob, and Nancy, and every person and animal he met (well, maybe not rabbits) with friendship and love. He made a lot of people smile every day.

We wanted you to know a portion of the profits of this book will be donated in Bear’s memory to local animal shelters, parks, conservation organizations, and other individuals and nonprofit organizations in need of assistance.

– Douglas and Sherri Brown

PS: We have since adopted two more rescue dogs: first Scout, and the following year, Ginger. They were both mixed golden retrievers who needed a home.

Want to help animals and the world? Here are a dozen easy suggestions you and your family can implement today:

•  Adopt and rescue a pet from a local shelter.

•  Support local and no-kill animal shelters.

•  Plant a tree to honor someone you love.

•  Be a developer — put up some birdhouses.

•  Buy live, potted Christmas trees and replant them.

•  Make sure you spend time with your animals each day.

•  Save natural resources by recycling and buying recycled products.

•  Drink tap water, or filter your own water at home.

•  Whenever possible, limit your use of or do not use pesticides.

•  If you eat seafood, make sustainable choices.

•  Support your local farmers market.

•  Get outside. Visit a park, volunteer, walk your dog, or ride your bike.

Five years ago, Atlantic Publishing signed the Green Press Initiative. These guidelines promote environmentally friendly practices, such as using recycled stock and vegetable-based inks, avoiding waste, choosing energy-efficient resources, and promoting a no-pulping policy. We now use 100-percent recycled stock on all our books. The results: in one year, switching to post-consumer recycled stock saved 24 mature trees, 5,000 gallons of water, the equivalent of the total energy used for one home in a year, and the equivalent of the greenhouse gases from one car driven for a year.

Trademark Statement

All trademarks, trade names, or logos mentioned or used are the property of their respective owners and are used only to directly describe the products being provided. Every effort has been made to properly capitalize, punctuate, identify and attribute trademarks and trade names to their respective owners, including the use of ® and ™ wherever possible and practical. Atlantic Publishing Group, Inc. is not a partner, affiliate, or licensee with the holders of said trademarks.

The Good Housekeeping name and logo are registered trademarks of Hearst

Communications, Inc.

The HGTV name and logo are registered trademarks of Scripps Networks, Inc.

The American Society of Interior Designers name and logo are registered trademarks of American Society of Interior Designers.

The NCIDQ name and logo are registered trademarks of National Council for Interior Design Qualification, Inc.

The Dwell name and logo are registered trademarks of Dwell, LLC.

The BBB name and logo are registered trademarks of Council of Better Business Bureaus, Inc.

The QuickBooks name and logo are registered trademarks of Intuit Inc.

The American Marketing Association name and logo are registered trademarks of American Marketing Association Not-for-profit Corporation.

The Constant Contact name and logo are registered trademarks of Roving Software Incorporated.

The Got Marketing name and logo are registered trademarks of GotCompany.com, Inc.

The Marketitright.com name and logo are registered trademarks of

MarketItRight.com Corporation.

The Melissa Data name and logo are registered trademarks of Melissa Data Corp.

The Kitchen Aid name and logo are registered trademarks of Whirlpool Properties, Inc.

The Home Depot name and logo are registered trademarks of Homer TLC, Inc.

The Energy Star name and logo are registered trademarks of Environmental Protection Agency United States.

The Hyatt Regency name and logo are registered trademarks of Hyatt Regency Corporation.

The ECOSA Institute name and logo are service marks of ECOSA Institute

Non-Profit Organization.

The Principal Financial Group name and logo are registered trademarks of Principal Mutual Life Insurance Company.

The RingCentral name and logo are registered trademarks of RingCentral, Inc.

The Peachtree name and logo are registered trademarks of Sage Software, Inc .

The PowerPoint name and logo are registered trademarks of the Microsoft group of companies.

The Metropolitan Museum of Art name and logo are registered trademarks of The Metropolitan Museum of Art.

The ASID name and are registered trademarks of American Society of Interior Designers.

The Henredon name and logo is a registered trademark of Henredon Furniture Industries, Inc.

The Kallista name and logo are registered trademarks of Kallista Baths, Inc.

The Oprah Winfrey Show name and logo are registered trademarks of Harpo Print, LLC.

The STAINMASTER name and logo are registered trademarks of Invista North America S.A.R.L.

The Moen name and logo are trademarks of MOEN INCORPORATED.

The ProSource name and logo are registered trademarks of LEADING

EDGE MARKETING, INC.

The AutoCAD name and logo are registered trademarks of AutoDesk, Inc.

The Brightway Insurances name and logo are service marks of Miller Insurance Group, Inc.

The Independent Insurance Agents and Brokers of America name and logo are registered trademarks of INDEPENDENT INSURANCE, AGENTS & BROKERS OF AMERICA, INC.

The BNI name and logo are registered trademarks of BNI Enterprises, Inc.

The DuPont name and logo are trademarks or registered trademarks of E.I. du Pont de Nemours and Company

The Silestone name and logo are trademarks of COSENTINO S.A.

The Lifekind name and logo are trademarks of Lifekind, Inc.

The AMERICAN EXPRESS name and logo are registered trademarks of AMERICAN EXPRESS COMPANY.

Family Business Experts.

The CCH name and logo are registered trademarks of CCH Incorporated.

The INTERIORS by Decorating Den name and logo are registered trademarks of DDSI.

The ServiceMagic name and logo are registered trademarks of ServiceMagic, Inc.

The Apple name and logo are registered trademarks of Apple Inc.

The Keynote name and logo are registered trademarks of Apple Inc.

The Dream Draper name and logo are registered trademarks of Evan Marsh Designs, Inc.

The Microsoft name and logo are registered trademarks of the Microsoft group of companies.

Dedication

I would like to dedicate this book to my husband, Tom, for his unwavering support of all of my endeavors, and to my mother, who always believed in me. I miss her so much I can hardly breathe. And to my sister, Melissa, and my nephews, Wesley and Logan, because they inspire me. I love them all.

Table of Contents

Chapter 1: Interior Design 101

Chapter 2: Are You a Designer?

Chapter 3: Doing Your Research

Chapter 4: Writing a Business Plan

Chapter 5: Buying a Franchised Interior Design Business

Chapter 6: Getting Started

Chapter 7: Internal Bookkeeping

Chapter 8: Budgeting & Operational Management

Chapter 9: Marketing Your Business

Chapter 10: So You Have a Sales Lead…Here is What You Do Next

Chapter 11: Congratulations! You Got the Project…Now What?

Chapter 12: Current Trends in Design

Chapter 13: Green Design

Chapter 14: Preparing to Leave Your Business

Conclusion

Appendix A: Interior Design Forms

Appendix B: Financial Forms

Appendix C: Case Studies

Glossary

Bibliography

Suggested Reading

Author Biography

Chapter 1: Interior Design 101

A Brief History of Interior Design

Designing our interior spaces can be traced back to the Roman Empire and ancient Greece. Since man has been building dwellings, we have been decorating those interior spaces. Primitive man may have been decorating their cave walls and their bowls and pottery, but as civilizations evolved throughout the world, so did design. We know about the Roman and Greek architecture and design from ruins, surviving furniture pieces, and a few literary sources that give us an insight into what ancient man was doing and thinking about their dwellings and design. We have much more to look at from the Roman ruins, but it is important to note that the Romans took much of their basic design elements from Ancient Greece and built upon them.

The Renaissance period gives us amazing insight into the importance of design in the ancient world. Italy and France were epicenters of design from the Renaissance and beyond. It was during the Baroque era, however, that domestic interior design began to emerge on its own, rather than as an afterthought of the architectural design.

Between the 1700s and 1800s, there was a decline in standards in the approach to interior design. Design was becoming more available to the masses. Early Modernism was an interesting time for design. At the turn of the century, Frank Lloyd Wright (1869-1959), studying under Louis Sullivan (1856-1924), was becoming one of America’s predominant designers, presenting the concepts of large, open interior spaces, and this style remained an important influence in American design. Wright did not design based on the past historical designs, but to the desires and needs of his clients. He took an approach of integration.

Dorothy Draper

The first lady of interior design in America was Dorothy Draper. Born in 1889, Ms. Draper opened the first interior design business in 1923, when it was unheard of for a woman to open a business of any kind. Her style was modern, as she broke away from the period room styles of the time. She enjoyed designing public spaces, and many still exist to this day, such as her work with the restaurant at The Metropolitan Museum of Art® in New York.

Ms. Draper used vibrant colors and combinations, and one of her favorite combinations —and there are many famous ones — was dull white and glossy black. Her signature cabbage rose chintz fabric is still popular today. Ms. Draper wrote a design advice column for Good Housekeeping® magazine, designed custom fabrics and furniture, and decorated restaurants, theaters, department stores, hotels, and private homes. You can see some of her work at The Carlyle in New York and at the Greenbrier in West Virginia, where she designed a room called The Victorian Writing Room, called one of the most photographed rooms in America. She was truly a pioneer of our modern design business.

Exploring Your Passion for Interior Design

Are you constantly redecorating your home? Do your friends and family ask you to help them redecorate rooms in their home? Do you watch HGTV® constantly and think, I could do that? These are just a few indicators that you might be a designer.

I suggest that you read about the different design styles and try to determine what your design style is. Do you like to create? Are you the type who sees potential in an old piece of furniture at a garage sale? Have you ever painted an antique piece of furniture? Do you have a creative flair? If you surf the Internet, you might consider signing up for some design blogs and reading them. There is so much involved in the actual talent of design that you will not get bored. Whether it is learning about furniture scale, how lighting in a room contributes to or takes away from the design of the room, or how paint colors interact with each other, read and study as much as you can. You might want to find designers whose style you identify with and study their work — you could work as a design assistant part-time for another designer or even as an intern to see the daily workings of what it takes to own your own design business.

If you have a definite favorite style of your own, will you be able to design a room for a client who wants the exact opposite of your style? Do you want to be considered a designer who only designs in your chosen style, or do you want to be a designer who works with clients’ tastes and can offer whatever style they want? Often, a designer will start out designing for their clients’ tastes, and as he or she becomes more known and successful, that particular style is recognized, and the people who want that style gravitate toward them and become their clients. At that point, the designer has enough of a following that he or she can specialize in their own specific design choice.

A Current Market Overview

Employment is growing in this area, driven by U.S. households and small businesses. It is estimated that there will be a 4.5 percent growth rate for this industry through 2012. A large part of this market will come from hospitality, which includes restaurants, hotels, motels, and resorts that need someone to design or redesign already-existing establishments. Many tourism areas with hotels have to constantly remodel and reinvent their properties to keep tourists coming back. Corporate clients want to expand or improve their offices, or create new retail stores and leisure facilities for families.

As people work more from home and altogether stay home more often, home offices are a growing trend, as are home media rooms. Similarly, another trend is larger bathrooms with saunas, whirlpools, and large walk-in closets. The green design movement is also strong and will continue to grow.

Whether you need formal education to work in interior design depends on whether you work in contract or residential design and what state you live in. Residential design often does not require a formal degree, while contract design can be more limited. There are many successful residential designers who do not have any higher education, however; many work long hours and have good sales skills and an eye for design.

In most states, you will find many accredited interior design programs to choose from. The Foundation for Interior Design Research posts a list of accredited schools on its Web site at www.accredit-id.org. Depending on the size of the state, the number of accredited programs may vary. About 50 percent of designers practicing in the United States who have post-secondary education have two or more years of college, and another 40 percent have a four-year college degree in interior design. The remaining 10 percent have their degrees in fine arts, liberal arts, industrial design, or other majors. There are many designers who have an innate talent and ability and have taught themselves the art of decorating or have interned with someone.

Trends in Interior Design

• Eco-friendly design using natural products is quite popular. Clients can appreciate a designer who is able to present them with natural, sustainable products, such as bamboo flooring, cork wall covering or flooring, and many more options as this field continues to grow. Clients are savvy in this area and want products that help them conserve energy and protect the environment. More solar water heaters are being installed than ever before, and also popular are ovens that cut cooking time in half.

• Customized and spacious bathrooms are highly in-demand.

• Especially in warm-weather states, outdoor living spaces are designed in lush style, including outdoor kitchens and bars, outdoor living room furniture, and outdoor fabric drapery.

• Faux painting is still in-vogue in many areas, and wallpaper is making a strong comeback. The trend is strong in Europe and catching on in the states. The new wallpapers have designs with texture and depth, as well as easy-to-remove backings. Large geometric shapes and tone-on-tone patterns are also popular.

• Remodeling of kitchens into luxury kitchens is another strong trend. As other areas are slowing, the baby boomers are spending money on luxury kitchen re-designs that include state-of-the-art appliances, induction cooking, the latest hardware,