Are you making profitable choices?
Go ahead, take a moment to mull that one over.
I bet there are a few things that come to mind that you realize maybe aren’t helping your business be “profitable”.
What is Profit?
As a business, you deserve to be profitable. Running a business is a challenge and too often we settle for “just getting by”. We shouldn’t settle. We shouldn’t compromise on profitability. We shouldn’t allow ourselves to forget that we’re running a business and the goal of any business is to make money.
Otherwise we’re not running a business, we just have a hobby.
If you have an interior design business you deserve to be profitable. The goal is to make money. (And if that thought makes you uncomfortable you may need to work on your beliefs around money.)
Profit is the money above and beyond your business expenses (rent, office supplies, taxes, your salary & others, equipment, marketing, etc).
You don’t want to be living paycheck to paycheck.
To grow your business, to invest in your businesses future, to invest in your retirement, you need profit.
What’s Not Profitable
As I asked at the beginning of this article: What are you doing that is not profitable?
So those things that are not profitable are probably also detrimental to your business.
They may actually be hurting you and your business.
Here are some things that could be hurting your business and profitability.
Buying primarily (or only) retail.
Not charging enough.
Not charging for all your time.
Giving time away.
Making design “accessible” to everyone. (Psst. everyone can’t afford an interior designer and that’s okay, they still have other options.)
Lack of confidence.
Lack of proper business foundation. (Check out The Golden Blueprint!)
Not billing regularly.
Allow clients to dictate your business terms.
Working with the wrong clients.
Not having consistent billing policies, not adhering to them or not following up on late invoices.
Profitability is Your Responsibility
If you can check off any of the above, I bet some excuses come to mind. Take note. What are they?
Profitability is your responsibility.
Client’s care about their bottom line and you have to care about your business’s. No one else can do that for you.
Okay, back to those excuses. What can you do about them?
Stick to your business policies and procedures.
Stop making (and believing) excuses.
Act as an authority.
Have project minimums.
Run your business as professional.
Know how to manage your money. How can you manage your client’s money if you can’t manage your own? Look at your financial reports. Keep good records. Hire an accountant. Reconcile your books. Bill regularly. Know your expenses.
Understand what you're doing that is preventing you from being profitable.
It’s Not About Your Pricing Model
I know what you may be thinking, if I could charge better, have a more profitable pricing model. If I knew the secret I’d be profitable. I can tell you with certainty you can be profitable with almost any pricing model. A change a pricing model isn't what is going to make you profitable.
If you give away hours, don’t know how much you work, don’t make quick decisions, second-guess yourself, do too many “favors” for clients, charge too little, or don’t have concrete billing practices no pricing model will work.
If your business isn’t turning a profit, you have a choice. You can continue the status quo OR you can examine and fix the ways you are undermining your profitability. Start by sharing what you need to do in the comments below.
Profitability is possible.
Further Reading: #1 Mistake That Hurts Profitability