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Author
Akram Kiyegga

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Wondering how to start a small business? Follow this step-by-step guide for interior designers on how to launch your own firm

If you’re wondering how to start a small business, maybe you’ve just graduated from design school, or perhaps you’ve worked at other firms and learned what not to do to succeed in the design industry. Or you’ve already paid your dues in another, unrelated field, and are branching into design now. Regardless of how you’ve arrived, you’re here because it’s time to start your own interior design firm. AD PRO’s overview of how to start a small business will help you avoid the pitfalls, prepare for success, and embrace the learning experiences that will come with this exciting journey. Read on to learn how to start a small design firm in 13 steps.

1. Organize your ideas You have a business goal: launching your own design firm. First, you’ll need to collect your thoughts and get organized. Some initial considerations:

• Do some research. Size up the competition. Gauge what other designers who are similar to you—in focus, scope, location, and demographic—are already doing.
• Determine what sets your design firm apart from the plethora of others. What services distinguish you from the rest, and what makes your approach exceptional?
• Consider your degree of commitment to the idea of launching your own design firm. Start your own small business only if you are truly passionate about what you are doing.
• Evaluate your own personal area of expertise, and figure out where you’ll need support. You’ll have the best chance of succeeding as an entrepreneur if you do what you do best and find people you trust to help do the rest.
• Discern your ability to attain clients. Start with at least one client or project confirmed, on the horizon, or in mind.
• Set specific goals. For example, give yourself a set amount of time to get off the ground with a set number of clients. Then establish a plan for attaining your objectives: What’s your revenue goal for the next year? What can you do over the next month, three months, and six months to get there?

2. Devise a business plan

You have already loosely outlined your plan of attack—but now it’s time to write a business plan. Having a traditional business plan is a necessity if you plan on seeking financial support, as a bank will need to review it when assessing whether you’re a desirable candidate for a loan. If you do not need financial support, then a simple business plan will suffice. Your plan should spell out what you hope to accomplish with your firm and how you plan to do it.

According to Joel Klein, founder and CEO of Brooklyn-based BizTank “A business plan is absolutely vital as it navigates your business on the road to success. Only by setting a plan that outlines where you want to go, along with a plan of action on how you are going to get there, will a business owner know if they are heading in the right direction and how far they are from their final destination.”

However, just because you’re an interior design genius with a solid business concept does not mean that you’ll feel ready to write a business plan. And that’s OK. When starting your own business, focus on what you do best and call in support from trusted others to help with the other tasks. Consult with friends, mentors, and advisors who might be able to offer assistance, check out online resources, or consider hiring an expert to write it. For a step-by-step guide to writing a business plan, follow our detailed outline.

3. Solicit advice Speaking of trusting others, seek out advice and criticism from those in your inner circle on your business concept. Present what you plan to offer—details of the design services provided by your firm—and solicit comments and opinions. Reach out to your network of associates, colleagues, professors, and bosses who can give you solid advice and informed opinions. Be sure to ask specific questions to attain the answers you need: Is there something that isn’t clear about your plan or services? Can they suggest how you might rework your offerings? Negative feedback can be just as constructive as positive reinforcement. Use this opportunity to build a strong foundation that will help you kick-start your small business.

4. Plan out your finances

How much money do you need to start a small business? You can launch a business without a lot of money, but an initial investment is required, and you’ll need to be able to cover your expenses before you can start actually earning money. What expenses? Start by listing the basics: Office space and all that goes with it (electricity, Internet access, printers, etc.), design-management software, employee headcount, and web design are all good ones to account for. Now, how do you finance a start-up? There are myriad ways to receive capital to start a small business; you’ll need to evaluate your situation to decide which method works for you. Consider these options:

• Self-finance. Self-financing is the most common way of funding a small business. This means using personal savings, credit cards, bank loans, cashing out retirement accounts, and selling personal assets. Do research and see what financing options are available to you. Designer Lori Weitzner recalls that when she set out to launch her own textile and wall coverings company in 2004, she went to J.P. Morgan and found out the bank was promoting a special financing plan to help women in business. “Overnight, I was able to get a $100,000 revolving credit loan,” she says. “That was incredible to me, and that is how I began Weitzner Limited.” Consult our guide on how to get a loan before you get started on your self-financing journey.
• Call on friends and family. Consider tapping them as investors. While it can be difficult to mix personal relationships and money, it’s smart to make the most of the resources closest to you. Make a formal pitch to friends and family; if they believe in you and are able to help financially, many will. You can download a free template for a promissory note or family loan agreement so that you have a legal document that states the terms of your personal loan, schedule for repayment, and interest rates.
• Get an advance. Convince a strategic partner or customer to help you fund your business by giving you an advance. See how serious the party in question is about working with you. It might end up being just the right opportunity for both of you.
• Request a small-business grant. Visit grants.gov to take advantage of a searchable database of more than 1,000 federal grant programs.
• Crowdfunding. Start a crowdsourcing campaign through a platform like Kickstarter or Fundable.
• Join a startup incubator or accelerator. You’ve probably heard of Y Combinator, which is one of the most popular options, but check out 30 Weeks, which is a program specifically targeted to the design community.
• Apply to angel investor groups. Search gust.com to find local investors who are interested in financing design endeavors.
• Consider soliciting venture capital investors. Keep in mind, VCs are often seeking a big investment (think $1 million or more), so this might not be the right avenue for a small business.
• Barter services. You can trade interior design services for another business’s services. For example, offer to design a client’s office in exchange for free desk space in that office. Or provide renderings for an accountant’s office redesign in exchange for an overview of accounting basics. Think creatively here—what do you have, and what do you need?

5. Establish a business location

Whether you’re starting your small business at home or going with a coworking space, a desk in a client’s place of business, a shared office, or your very own private office, your next step is setting up shop. Stephanie Somogyi Miller says that when she was a twentysomething trying to launch SPREAD PR, her 15-year old New York PR firm that focuses on interior design clientele, she knew one of the first necessities was having an office and phone number. “I took a small office on 33rd Street and Madison Avenue, which wasn’t a glam area at the time, but I knew that people would see the Madison Avenue address and not know where on Madison it was,” she recalls. “And I started making calls and hustled my butt off until I had enough clients to justify my office space.”

6. Set up your structure

As a small-business owner, you have the option of being a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation—and the business type that you choose influences how you file your taxes, among other factors. Typically entrepreneurs with small businesses opt to establish an LLC rather than a corporation because it offers greater flexibility in management, plus fewer structured bookkeeping requirements and reporting obligations for taxes. Not exactly sure how to establish an LLC? Consider outsourcing the operational aspects. It’s wise to consult an attorney or CPA to be sure you’re correctly setting up your business for success.

7. Name your business—and tackle the legal paperwork

Choosing a business name creates an identity for your company. You’ll want to carefully think it over, and then do the following:

• Consider its meaning, connotation, and any potentially negative associations with it.
• Confirm that the name is not already taken by checking to see if it’s been trademarked.
• Register your small-business name.
• Register your domain name for your website.

Once your name is established and registered, you’ll have to consider the legal requirements for starting a small business. You’ll also have to apply for a federal tax ID number and a state ID numbers. You can apply via the IRS online or by calling the IRS small-business helpline at 1-800-829-4933; you’ll receive your tax ID number by the end of the call. You’ll also need to obtain a license in the city where you plan on doing business. The U.S. Small Business Administration can be a great resource to help you obtain the proper licenses and permits for your design firm. Dealing with this legal paperwork is likely another aspect of starting your own small business that might not fall under your area of expertise, so it would behoove you to consult a lawyer to be sure you’re not forgetting anything.

8. Set up your bank account and accounting system

Work with an accountant to set up the accounting system for your company. Want to DIY this part? Research what types of accounting software are available for your type of small business. It’s critical to have a system in place early on so that you can create and manage your budget, set rates, send and pay invoices, and file taxes. Also, let apps be your friend. There are a host of business apps that designers use to help simplify operations, particularly accounting functions. Check out apps like Ivy, a software tool made specifically for designers, or general accounting and project-management tools like Xero and Honeybook that will help streamline business functions and make your life a whole lot easier.

9. Brand your business

You need to distinguish your brand from the competition. You may already be adept at branding, but if not, get help. Hire an expert who can visually convey the personality and message of your company. Provide a branding designer with a brief synopsis of your company, and distill the essence of your firm down to five specific keywords that reflect the heart of what you do. Work with the expert to create a logo and a visual language that will be used consistently on all forms of communication (email, letterhead, business cards), marketing materials, online outlets, and social media platforms.

10. Create an online presence

It’s no longer a question of if you need a website and social media account for your small business, but of how dynamic your website and presence on social media platforms can be. You may not know how to create a website for your small business, but you can rely on easy-to-use website builders such as WordPress, Squarespace, Yola, SiteBuilder, Wix, or Weebly. Once you’ve established your business name, registered its domain name, and created your logo and branding, you have all the components you need to build your small business website in a few simple steps. Develop your digital portfolio and consider posting that on your site as well; you can also set up a password so that potential clients can log in to access more of your work. Along with your website, you should tackle the tasks of creating a Facebook business page and business Instagram account.

11. Accrue your team

You might not have the funds off the bat to hire support staff. However, you’ll still need to figure out how to outsource certain functions. It makes sense to pay for the services of a legal counsel, an accountant, and a branding designer. Beyond that, you’ll need support for day-to-day functions. You may not be in a position to hire a team of full-time employees, but you can hire as needed on a project basis, rely on a trusted freelancer or interns, or find one hard and reliable worker until your business grows. Make sure anyone who is working with you understands your company culture and the goals for your organization.

12. Attract clients and promote your business

A tip that’s often shared by entrepreneurs is to never stop building meaningful relationships. Networking is the key to success in any industry. So reach out to all of your A&D industry contacts and let them know you’re launching your own design firm. As you’re figuring out how to be an entrepreneur, seek out support from the network of associates that you’ve developed through the years. Chris Abbate, founder and CEO of Novità, a New York–based media relations company that caters to the A&D community, started her small business 22 years ago with part-time employees and some interns. “One thing I would recommend is to start with at least one piece of business or client,” she says. “Things will naturally grow from there.” Success begets success, so having one satisfied client will help your business grow.

13. Develop your service and grow your business

Preparation is integral to success, and by this point you’ve established a solid foundation and a plan for your design firm. You’ve followed all the steps for how to set up a small business, and you’re working on how to manage it effectively. The next step is growth. Focus on promoting your design services: Develop a marketing plan or hire a specialist to help you advertise your business, rely on social media, and be sure to satisfy and retain your current client base. Remember that the easiest customer to sell to is the one you already have—satisfied clientele can also help promote your business.

Don’t get discouraged if success doesn’t happen as quickly as you’d like. As Somogyi Miller puts it: “Believe in what you are doing. If you are solving a problem, believe in your solution or method. If you are selling something, make sure it’s the best version it can be and always be improving it. Never fly blindly because you think you know more. Always assume you are missing something and do the reading, research, and work. Trust your advisors. Honoring the people who came before you and using their advice is key to your success.”

After following these steps, you’ll be on the path to creating a sustainable and profitable business. Check out our guide for how to succeed in your small business to keep the momentum going after your launch.