As an interior designer, architect, landscaper, or decorator, you have several business models at your disposal to thrive in your industry, each tailored to different client needs, market niches, and your personal work style preferences. In this article, I’m going to answer the following…
- What are the best business models for designers?
- What do you need to think about when choosing your business model?
- What does it actually mean – the business model?
What Is a Business Model?
A business model defines the rationale of how your business creates, delivers, and captures value in economic, social, cultural, or other contexts. In simpler terms, it’s a plan or diagram that outlines how your company makes money, detailing the products or services, the target customer base, and the financial strategies it employs.
The choice of your business model is one of the key strategies we work on when building your Signature Business. While many strategies, and particularly tactics, can be copied from others, your business model isn’t one of those. It’s unique to you, and the more advanced you become in your business, the more you will be thinking about your business model. Here are the key components your business model consists of:
The business model includes several key components:
- Value Proposition: What makes the product or service attractive to customers? This aspect defines why customers would choose your offering over competitors’.
- Customer Segments: Who are the target customers? Identifying and understanding the specific groups of people or organizations that your business aims to serve is crucial.
- Channels: How are these products or services delivered to customers? This includes the various methods of communication, distribution, and sales channels that a business uses to engage with its customer base.
- Customer Relationships: How does the business interact with its customers? This includes the type of relationship you want to establish with your customers, which can range from personal to automated or self-service types of interactions.
- Revenue Streams: How does your business earn revenue? This details the specific ways the business makes money, which can include sales, subscriptions, leasing, or other methods.
- Key Resources: What unique strategic assets must the business have to compete? This can include physical assets, intellectual property, human resources, and financial resources.
- Key Activities: What uniquely strategic things does the business do to deliver its proposition? This includes the most important actions the company must take to operate successfully.
- Key Partnerships: Who are the partners and suppliers that help the business to operate and deliver value? These are the relationships that the business has forged with other organizations to help it function effectively.
- Cost Structure: What are the business’ major cost drivers, and what are the most expensive resources? This outlines the financial and economic structure required for the business model to be viable.
Best Business Models For Designers
What’s best? The question is: What’s the best model for you? But let’s cover some models, and you can start thinking about what would be your unique model and start implementing it!
Before you start implementing or making any changes, please consider the time you have available. You might be in a situation where focusing on just one or two models is the only way, at least for now. Or, you might want to scale your design business by implementing multiple revenue models! Either way; be mindful of your key resources: time & money!
Consultation-Based Model
You charge clients for your expertise and advice, providing them with design concepts, color schemes, and furniture recommendations that they can implement themselves. This approach allows you to focus on the creative aspect without getting involved in the implementation.
Read: How To Construct a Profitable Designer For A Day Offer
Product-Sales Model
By selling furniture, decor, textiles, or other products directly, you create an additional revenue stream. Whether these are items you’ve designed yourself or curated from various vendors, you benefit from each sale made to your clients.
Read: Launch a Product Line
Full-Service Design Model
This model sees you managing all project aspects from concept to completion, including design, procurement, subcontracting, and installation. Your compensation might be a flat fee, an hourly rate, or a percentage of the project’s total cost, providing a comprehensive service to your clients.
E-Design (Virtual Design) Model
Embrace technology by offering your services online, providing clients with design plans they can execute themselves. This approach expands your reach beyond local clientele, offering more flexibility in how and whom you serve.
Read: E-design For Designers
Freemium Model
You can attract a broader audience by offering basic design advice for free and then charging for more advanced services or detailed plans. This model helps you build a client base and generate leads for more significant projects.
Subscription Model
Ideal for recurring revenue, this model involves offering ongoing services for a regular fee. It suits corporate clients or individuals who desire continuous updates or want to refresh their spaces periodically.
Read: Recurring Revenue For Interior Designers
Design and Build Model
This model integrates the design and execution phases under one roof, offering a turnkey solution to clients. As an interior designer, you collaborate closely with contractors and builders, ensuring that the design vision is faithfully executed. This approach appeals to clients seeking a one-stop-shop experience for convenience and coherence.
Licensing Model
If you have created unique designs or product lines, you can license them to manufacturers or retailers, earning royalties on your designs. This model can provide a passive income stream while elevating your brand in the market.
Read: Licensing For Designers – How to Get Licensing Deals
Partnership Model
Collaborating with architects, builders, or even other designers can open up new project opportunities and client bases. Through partnerships, you can offer comprehensive packages that cover a broader range of client needs, from structural changes to final decorative touches.
Real Estate Staging
Specializing in home staging for real estate sales can be a lucrative niche. By enhancing the aesthetic appeal of properties for sale, you help realtors and homeowners maximize their property’s market value and sale potential.
Event Design
Branching out into event design allows you to apply your skills to temporary spaces like weddings, corporate events, or trade shows. This model can be particularly rewarding for those who enjoy variety and the challenge of transforming spaces for specific, short-term purposes.
Teaching and Workshops
Sharing your expertise through teaching courses, conducting workshops, or offering online tutorials can not only provide an additional revenue stream but also help establish you as an authority in your field.
Digital Content Creation
Develop your brand by creating digital content related to interior design, such as blogs, vlogs, or e-books. This can attract a following, open up sponsorship and advertising opportunities, and allow you to share your knowledge and insights with a broader audience.
Read: Affiliate Marketing For Designers
Membership Site
Offering a membership program can provide clients with exclusive access to your design resources, tutorials, consultations, or personalized advice, creating a community around your brand and a steady income.
Pop-up Design Services
Setting up temporary design consultations in various locations or in partnership with stores can attract impulse clients and provide them with instant advice or quick design solutions, broadening your client engagement.
How To Price Your Services?
Of course, the next question is: “How do I set prices for my services and products?” I have a great guide here:
Interior Design Pricing Guide
My Suggestions For The Business Model
I think services are the best models to get started with, and then expand to other models such as products, teaching, and licensing. Here’s how you might want to think about your services:
Create specific service packages and sell them. These packages can be divided into flat-fee products and hourly fees or percentages – often both. For example, if you handle purchasing for your clients, you might want to charge hourly for project management and a percentage of the total furniture budget.
In the beginning, you might not have many trade accounts at your favorite suppliers, but you can start applying for them to be able to purchase at trade discounts. Then, the difference between retail price (what your clients would pay without you) and your purchase price becomes your markup.
Ultimately, the business model you choose will depend on your goals, your experience, and the needs of your clients. Consider your strengths and weaknesses, as well as the needs of your target market, when deciding which model to use.
