So you’ve decided you’re going to start your own interior design business. Congratulations! But have you thought about putting together a business plan for your new venture?
Writing down what you’re trying to achieve, the services you’ll offer, and other important factors will help you streamline your business strategy, keep you focused on your goals, and (perhaps most importantly) make sure your idea makes sense.
It’s a good idea to create a business plan before investing money in your new business; that way, you’ll have a better understanding of how it’ll make money and whether it’s likely to be profitable.
Throughout this guide, I’m going to explain the importance of having a business plan for your interior design business and take you through what information to include.
Here’s to a well-planned and successful interior design business!
Why do I Need an Interior Design Business Plan?
There are various benefits of putting together an interior design business plan before going ahead with your new venture, but it really boils down to two factors:
- Helping you understand your business
- Helping you explain your business to others
Helping you Understand your Business
Before you do anything, you need to get your thoughts in order to ensure you have a viable business idea. Writing things down usually helps them make sense, and it’s no different with a business plan.
Your interior design business plan will help you:
- Summarise your business idea: What you’re trying to achieve, what services you’ll offer, how you’ll operate etc.
- Identify goals and potential problems: Set out goals and how you’ll achieve them, and identify any risks and how to overcome them.
- Plan your business operations: From sales and marketing to onboarding staff.
- Get your finances in order: Estimate your revenue, business expenses, and any financing you’ll require to get your business off the ground.
- Pinpoint your priorities and identify any gaps in the business
Helping you Explain your Business to Other People
A business plan can also help you convince other people to back your business. This includes:
- Financial assistance: If you’re planning on getting financial backing from investors or securing a bank loan for your interior design business, you’ll need to present a well-formed business plan.
- Employees and suppliers: Potential employees and suppliers are unlikely to work with a business if they don’t know what it does. A business plan will help you explain this so you can onboard staff and suppliers before getting started.
- Explaining your business: Writing down a business summary will help you better explain your business to other people, so next time you’re asked what your business does (or will do), you won’t fumble over your words.
Interior Design Business Plan Top Tips
Before writing your business plan, keep the following points in mind:
Write it for an Outsider
Write your business plan as if the person who’s reading it knows nothing about you, your business or the interior design industry. This will likely be the case when it comes to getting investment.
Keep it Concise
Don’t go into too much unnecessary detail. Keep it to the point and focus on the sections listed below. After all, you want people to read it!
Avoid skimming over potential risks and problems, and be honest and realistic about finances. Being over-optimistic might get you the loan you’re after, but it could lead to problems in the future.
Know your Market
Make sure to include market research, details on competitors, where your business fits into the interior design market and what makes it different to what’s already out there.
What to Include in your Interior Design Business Plan
When it comes to writing your business plan, try to use the following structure:
About the business owner
Products and services
The market: Customers, competitors and market overview
Sales and marketing strategy
Let’s go into a bit more detail on each section:
1. Executive Summary
An executive summary is essentially a summary of your interior design business plan, so it’s best to write this section last. It should include key points, so if someone were to only read this section, they’d still have an understanding of your business and what you’re trying to achieve.
Your executive summary should include:
- Business name and type of business (e.g. sole trader or LTD company)
- A summary of the services you’ll offer and/or products you intend to sell
- Mission statement: What is the aim of your business? (e.g. become the number one interior design service in your area)
- Goals and objectives: It’s good to include short, mid, and long-term goals. (e.g. generate [amount] of profit in the first year)
- Financial summary: Financial goals and any secured or required funding
- Keys to success: How will you achieve your objectives? (e.g. provide high-quality services and first-class communication)
2. Elevator Pitch
An elevator pitch is a short summary of your business. It’s what you’ll tell people when they ask what your business does. Writing down an elevator pitch will help ensure you have a clear idea of your business direction and enable you to give a concise, well-formed description when you explain your business to others.
It should include:
- What your business does
- Who your target audience is
- Your unique selling point (USP): What sets you apart from competitors?
3. About the Business Owner
Add a bit about yourself, why you want to start an interior design business, and any experience you have in the industry. Things to cover include:
- Who are you?
- Why do you want to start this business?
- What experience do you have?
- Relevant qualifications and training
- Relevant hobbies and interests
4. Services you’ll Offer
How is your business going to make its money? Explain the different interior design services your business will offer and whether you’ll also sell any physical products.
- A list of services you’ll offer as an interior designer
- Any products you’ll sell
- Plans for future products and services
5. Business Structure
Will you work as a sole trader and hire contractors to help, or will you hire employees? Do you have a network of suppliers in place to help you carry out your projects? Include information on your employees, contractors, suppliers, and their roles in this section:
- Whether you’ll hire full-time employees or outsource to contractors
- Job roles and responsibilities
- List of suppliers needed to help fulfil projects
6. Market Summary
The market summary section of your business plan should include information about the current market and market trends, your target audience, and competitors. This section will not only help outsiders understand your target market, but it’ll also help you understand how best to advertise your products and services.
Your market summary can be split into a few sections:
- Target customer profile: Who are your target customers?
- Who are you selling to? (e.g. businesses or individuals, residential or commercial)
- Why do they/will they buy from you?
- Any already confirmed orders
- Who are your competitors?
- What’s your USP? What makes your business different?
- SWOT analysis: Strengths, Weaknesses, Opportunities and Threats
- Size of market
- Market trends
- Field research
(Ask prospective customers what they think about your business idea)
7. Sales and Marketing Strategy
How will you reach your target customers, and what channels will you sell your products through? What price point will you sell your services at? The sales and marketing strategy section should cover:
- Sources of income: How will you sell your products and services?
(E.g. online services, products, commercial and residential projects)
- Marketing channels: How will you advertise your products and services?
(E.g. word of mouth, social media, direct mail, trade shows)
- Pricing strategy: What price point and why?
- Are you likely to get repeat customers or retainer clients?
8. Business Operations
This section covers the day-to-day running of your business, what’s involved in each interior design project or the production of any products you sell, where your business will operate, what equipment and insurance you’ll need, etc.
- Production/projects: How long will it take, how much will it cost you?
- Payment: How will customers pay?
(e.g. upfront, deposit, payment plan)
- List of suppliers: Who are your suppliers?
- Business premises: Where will your business operate from?
- Equipment needed: What equipment do you need for your business to operate?
- Licenses and insurance: What licenses and insurance do you need for your business to operate?
- Business expenses
There are various expenses involved in running a business, so you’ll need to list these. Your expenses will include things like:
- Business premises
- Employee/contractor wages
- Merchandise production
- Loan repayments
- Financial Forecasts
Financial forecasts can be tricky if you’re just starting out, but try to put together a realistic calculation for the next three to five years. Essentially, you need to prove that your business will survive and become profitable. If you’re a small business or startup, speaking to an adviser at your bank may help with forecasting.
Your financial forecasts should include:
- Historical sales figures from the last three to five years (if applicable)
- Sales forecast: How much money you expect the business to take
- Profit forecast: How much profit you expect the business to make
- Monthly cash flow and business bank balance
- Balance sheet: Your business’ assets, liabilities and stockholders’ equity (smaller businesses may not require this
As you can see, a lot goes into starting your own interior design business. And while creating a business plan might seem like a long process, it’ll definitely help you in the long run.