Financial Based Decision-Making

Does this sound like you??

You own an interior design firm.

You are unique, creative, ambitious, friendly, supportive, kind, and passionate.?

You work days (and sometimes nights and weekends, too) just to keep your business moving forward.?

You love what you do, but you dread the meeting with your accountant each month.?

You trust your bookkeeper, but actually feel overwhelmed by the thought of your business finances.?

You hire a new designer or purchase a new piece of software to support your firm on a whim instead of based on your financial goals.

Guess what? You are not alone.?

Actually, tons of creative business owners (interior designers, stagers, workrooms, etc.)? feel just like you do. They spend time supporting clients, marketing, designing, and managing their team, but don’t want to consider their finances.?

Why? Because it feels overwhelming and who needs one more thing to do! Right?

It’s not that they don’t think about them, but more that they don’t want to think about them!

They have no way to know which money in their account is waiting to be used for payroll or purchase orders and no way to know if they are making any profit at all.?

Even worse, some creative business owners have no idea when the next invoice will be paid or how much it will be for.

But it doesn’t have to be that way!

I am going to share 3 tips to change the way you view money in your business that will support your growth and your strategy. These tips can be used across industries to better understand your business finances and ensure your business is built on a solid foundation.

1. Create a Strategic Plan.

A plan that spans years, not months, not weeks, not minutes. Determine where you want your business to go before you make decisions on how you will use your money. This might seem backwards, but without knowing where your business is headed - how can you determine how to spend your money?

2. Allocate money appropriately.

When you receive a large invoice payment, do you put money aside to purchase furniture, accessories, and window treatments? Or do you put the money in a big bucket with the rest of your cash and spend it as you need it? The most profitable design businesses allocate funds so they can clearly see what belongs to them versus what they will owe for other things in their business.

3. Track your time.

I have spoken with well over 2,000 designers/business owners in my life and less than half track their time effectively. Time tracking might feel tedious when you’re in the middle of the day, but when it’s time to look back to see if you were profitable on a project, it’s necessary! Just because you build in profit on product sales and labor, doesn’t mean you will have a profit by the time the work is done. Time tracking is essential for understanding project cost and profitability.

Now, I want to put the ball in your court for a minute. Which of those 3 do you have/do well in your business??

If it’s all 3, congratulations! You’re well on your way to making financial based decisions in your business. If it’s less than 3, don’t try to take on too much at once. Choose one of the ones you're missing and start developing a plan around how you can get it done in your business.?

If you need a little help, click HERE. I love doing strategy calls with designers who are ready to understand their financials!