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When it comes to running a business, there are lots of ways to improve profits without having to cut costs. Here is a collection of some of our top tips for being more profitable.
1. Raise Your Prices
I know this one seems like such an obvious tip, but a lot of businesses barely break even because they simply don’t charge enough. When you quote for a project, you aren’t just quoting for the time it’ll take you to do something, but also for the expertise you bring, the material cost, and the savings you bring to your client.
We’ve seen it many times, a new business will charge just slightly more than its own cost in an effort to win over a lead. This practice not only leads to undercutting in your business area but also means your business won’t be able to expand in the future. Just think about it, how will you hire another designer so you can take on more clients when you don’t have the funds to pay that designer?
A good way to help with your pricing strategy is to go to networking events in your city, whether it be a meet and greet, charity event, or just coffee with people in your industry. Networking is a great way to find out what people price their services at, and why.
2. Speed Up Your Process
Taking the time to get to know your client and spending time working with them is a good thing, but too much of a good thing can also be bad. When you schedule a 30-minute consultation for a client, try your best to keep it to 30 minutes without having the client feel like you’re rushing them. This is definitely a skill that you develop over time, and the best example I can provide is my family doctor.
When I visit my doctor, it feels like we’re having a conversation and he listens to all my concerns. I tell him everything and he asks me the questions that are most relevant to my visit, but when I leave and check the time, I’m always surprised to see that the appointment only took 10-15 minutes! That’s the type of feeling you want your client to have when you finish.
The above is just one example, you can optimize your design process so that there aren’t many days spent waiting for approval after approval by just having all of the work quoted and designed so that the client only has one approval to give you.
Upselling has always been used in the business industry in order to increase profits. When you upsell, not only do you make more money, but you’ve just made another sale without having to pay for leads or advertising. If your client hires to do interior design for their living room, let them know that you have a packaged deal for a living room and washroom for a discount. You can even wait for your first in-person consultation with the client at their house so you can give them a package deal on the rooms that you think need work.
Another way to upsell is by telling your client that you can purchase furniture for them since you can get it for a discount (read more about setting up trade accounts here) and offering to split the savings with them. This is a practice used by many interior designers and it’s a great way to give your client more benefits while also increasing your profit.
4. Build a Team (Yes, it makes you more profitable)
When you first start out, it’s not required to hire staff and a renovation team. Start by reaching out to local contractors that you like the work of, and offer to send them leads in exchange for a percentage of the sale. This way, when a client hires you for interior design but they need to get their flooring done before you can start, you can tell them about your tile person. This is a great way to make more money because not only will you get a percentage of the contractor’s profit, there’s a high chance that the contractor will recommend you when their clients need an interior designer.
5. Buy in Bulk
No, we don’t mean run to Costco. As you run your business, you’ll start to notice that some products are requested by clients more than others, yes we mean you Carrara Marble tile. When you come across these products, most sellers will have discounts if you purchase in bulk. The negative to this is that you’ll need a storage room to keep your products, but the savings add up quickly.