Professional Practice for Interior Designers / Christine M. Piotrowski

1. Remember that profit and revenue are not the same thing. Even the sole practitioner working from home has operating expenses, and these expenses must be considered before realizing a profit. Profit occurs after business expenses for operations, such as salaries, rent, and travel are deducted from charges to the client. These operating expenses reduce profitability, just as not charging for shipment and delivery charges on any goods sold to clients. Thus, revenue is the amount of funds brought in via fees and sales of goods. That revenue by itself is NOT profit.

2. Never begin design work without a contract signed by the client. More than ever, clients today are looking for free advice. Offering design ideas before a contract has been executed can mean doing design for a client that goes to someone else for the completion of a project. Talk to the client about their needs, as it is the only way you can determine what the project is all about and how much to charge. Refrain from offering substantive design ideas until after a contract has been signed. If the client is reluctant to sign an agreement, they might also be reluctant to go forward with any design work.

3. Use a clear scope of services. The scope of services defines what you will do for the client. It determines how much you will charge and even how you might charge. It also creates the limits as to what will not be done, although these extra services can be included for an extra charge. The scope of services should be detailed in the order in which you will perform the work. This helps the client understand how the project will be done. Of course, you must be prepared to perform all the services you include in the scope discussion, or hire someone who can perhaps as a consultant.

4. Prepare an Annual Plan. An annual plan helps a design firm see clearly where it wants to go and what it wants to achieve during the coming year. Having direction helps the business owner make decisions on items such as: what jobs to take and which to pass up; appropriate fees for each job; marketing expenses and approaches; and to help make hiring decisions.

5. Keep accurate time records. Even if you don t charge by the hour, keep accurate time records. Recording time helps determine how long each type of project takes. This will help determine fees and other charges for similar projects. Time recording can also assist in determining if there are certain kinds of projects that take too much time for the amount of revenue earned. Many clients, especially those charged by the hour, will want to see time records when billed. Commit to record work for non-billable time as well, which will help you clearly see if you are wasting time on tasks that could be better accomplished by an assistant.