Interior Design Business

How to Create a Business Plan for Your Interior Design Business

Creating a business plan is the first step to setting a solid foundation for your interior design firm. However, it’s easy to downplay the utility of a business plan. To some, a business plan seems overly formal or unnecessary. However, a business plan is not only crucial to your success, it’s a useful tool for self-analysis. In this guide, we’ll discuss everything you need to know to create a smart business plan for your interior design firm.

Here are 10 reasons why you need to develop a business plan for your interior design business.

What is the Purpose of Creating a Business Plan?

Why should you even go to the trouble of developing your own business plan?

A business plan is a map that shows where you’re headed. At any point in your business journey, you should be able to refer back to your business plan and get a sense of where you are in relation to where you’re headed.

Your business plan should look at both your plans for growth and the ways that you’ll mitigate any of your shortcomings.

Your business plan should look at your plans for growth and how you’ll mitigate shortcomings. Click To Tweet

While a business plan is not legally required, it may be necessary if you’re seeking funding. It also gives you and all of the key stakeholders in your business a clear path to success. You can refer back to your business plan in the future to mark your progress.

Here’s what a business plan is not: A business plan is not filled with legalese. It’s also not filled with complicated ideas and lofty, unreachable goals. The core of any business plan is that it’s realistic and doable. It doesn’t need to be fancy, and it doesn’t need to be shared with others (unless you’re using it to secure a loan).

Here’s What to Include in Your Interior Design Business Plan

Let’s discuss how to create a simple but effective business plan. Business plans are broken into the following sections:

An Executive Summary

The executive summary is the big picture of your interior design business. In this section, you’ll look at your business as a whole and summarize everything you’ve included in your business plan. For this reason, it’s best to write the executive summary last.

The executive summary sets expectations of what to expect in the rest of the document. You’ll focus on your unique talents and what your business offers that sets you apart from your competitors.

You should also use this section to briefly explain how you’ll be successful given the current climate of your local interior design market. Point to your plans for the future, but also discuss your overall mission.

The executive summary should be limited to two pages at the most.

A Description of Your Company

Describe your interior design business as concisely as possible by answering the following questions:

  • What do you offer?
  • What’s unique about your offerings?
  • What type of niche industry (if any) do you work within? Tiny houses, beach properties, condos, etc.
  • What problem are you solving?
  • What is the opportunity that you’ll exploit in the marketplace?
  • Why will people use you?
  • What problem do you solve for them?

When answering these questions, be as specific as possible.

An Analysis of the Market and Your Place Within It

The next section to include in your business plan is a S.W.O.T. analysis on your place within the market. This is what a S.W.O.T. analysis stands for:

Strengths
(Answer the following questions:)

  • What resources will you use to grow your business?
  • What is your knowledge or skill set?
  • What other resources do you have access to? (i.e. line of credit, strong funding, etc.)
  • How will your service be unique compared with what’s currently available in the market?
  • How will your business compete with those in your market?
  • What is your unique value proposition?
  • Does your staff help set you apart in some way?

Weaknesses
(Answer the following questions:)

  • What elements of your business do you need to work on?
  • Do you feel that you need to work on differentiating what you offer? If so, how?
  • Do you help prospective clients in your area understand the need for interior design services?
  • How can you remain competitive in the event that others come into the market?

Opportunities
(Answer the following questions:)

  • Why will your business flourish in this environment?
  • What are the some realistic and/or current opportunities that you can use to make your business more attractive and profitable?

Threats
(Answer the following questions:)

  • What will you do if the market doesn’t grow or if it actually becomes smaller?
  • How will you weather that storm?
  • What can affect your company’s future success?
  • What is the current state of the local design industry?
  • What is size and/ or nature of the local market?
  • What is your share in the market?
  • How many competitors do you have?
  • Who are your chief competitors?
  • What are the strengths and weakness of your competitors?
  • How can you exploit their weaknesses to your advantage?
  • Is your market predicted to expand or contract in the future?
  • How will your firm survive either eventuality that you’ve predicted?

A Look at Your Management and Organization

Interior design business plan

Describe how you and your team members will contribute to the future success of your business:

  • What roles will you hire for and why?
  • How will each staff member help you compete successfully?
  • Who works for you?
  • What are your/their qualifications, certifications, and interior design-related skills?
  • What does each key team player bring to your organization?
  • Will you rely on outside help (accountants, IT staff, lawyers, etc.)?

A Look at What Services You Offer

Here’s where you go in depth about what services you offer. To create this section, answer the following questions:

  • What do you offer (staging, conceptual design, sourcing, installation, furniture design, etc.)?
  • What about your offering is unique?

Your Plan for Marketing Your Business and Unique Services

Marketing allows you to grow your interior design business by reaching prospective customers. Answer the following questions:

  • Who will you target and why?
  • What do you know about this target client’s demographic (age, locations, interests, and behavior, etc.)?
  • Where does your target client go for inspiration or to learn about interior design? (websites, magazines, social media influencers, etc.)?
  • How will you advertise your business (website, business cards, social media marketing, network opportunities throughout the year, etc.)?
  • What types of marketing channels do you think would work best and why? (Facebook, Instagram, Pinterest, direct mail, cold calling, etc.)
  • What are your individual strategies for each of your preferred marketing channels?
  • How do you competitors market to your target clients?
  • How will you convert interested prospects into actual clients in step-by-step detail?
  • How will you continue to build on your initial sales with the same client?

Your Financial Outlook

Interior design business plan

Your budget and other financial information plays a crucial role in your interior design business plan. To create your financial outlook, answer the following questions:

  • How will you make money?
  • How much do you need to make each month to remain solvent?
  • What are your expenses (marketing, office operation, utility bills, employee salaries, insurance, business equipment, etc.)?
  • How much will you charge for each of your services?
  • What are your sales forecasts?
  • How much will you expect to pay for goods?
  • What type of startup will you need?
  • How long can that startup money fund your business?
  • Will you look for funding in future opportunities?
  • What are your potential referrals (furniture stores, paint stores, home improvement companies, home builder associations, architects, developers, home builders, florists, etc.)?

If you’re looking to get funding, your investors will want to see realistic projections for what you expect to accomplish within the next year, three years, and five years. You can break down your financials monthly for the first year and then annually for every subsequent year that you include in your business plan.

Appendices

Last, but not least, consider including an appendix with tables, charts, and other notes that support the information presented in your business plan. Visualizing data can help you interpret and compare abstract concepts.

Keys to Remember

When creating your business plan, remember the following:

  • Your business plan isn’t one and done. It’s a living document that should be re-evaluated and updated accordingly every year at the very least.
  • A business plan is not just a formality for funding, but rather, a resource to rely on when you need to re-focus on the needs of your business.
Don’t forget to check out this list of the top 10 reasons to create a business plan for your interior design business.