Letter of Agreement Question
May 13
Question:
Terri, as I continue to read though the documents I received in the Design Biz Tool Box package I purchased I have come across some verbiage in the Letter of Agreement I would like to make you aware of in regards to our state laws in CA when it comes to contractor law.
Are you aware of statements such as what is in your suggested sample Letter of Agreement book page 13 stating:
“Four onsite visits are included to observe the accuracy of contractors’ work”. Unless designers in this state are licensed contractors, we cannot make statements about “observing the accuracy of contractor’ work.”
I believe that according to the state, this is practicing general contracting without a license and is actually a felony. I had a good friend get turned in by a disgruntled contractor, (they had a falling out over fees with him feeling he wasn’t getting paid enough for a job even after signing a contract with her), and she was brought up on felony charges that were of course later dropped but scared the **** out of her.
In my agreement I state, “Four onsite visits are included to observe design intent of contracted labor.” This allows me to check in without stating I am validating accuracy. I explain to my clients the law in my state and that this is the way I have to word it in the Agreement, but that I will be dropping by unannounced during these four times to ensure they are following my plans accurately.
Fortunately I work with some great GCs and I have never had a problem, but it’s something that in your book you might want to consider noting in the event other states have the same laws. If you have any other information that would invalidate this for me, please by all means let me know. But this “event” for my friend happened about 9 years ago and I am not aware of this law changing since.
Answer:
Thank you for looking out for me and the DBB Letter of Agreement. This is a very good point to make.
I think that you know that I am a contractor in AZ I am very aware of how contracting laws in Arizona work. I am aware that California and many other states that has these protective laws as well, and they affect our work as designers.
The reason that your girlfriend got in trouble was that she WAS actually contracting without a license.
That is, according to your story… that SHE hired the contractor, supervised him, signed a contract with him, paid him and charged the client for the work. Any one of these or all of these acts are indeed contracting without a license and it is a felony in most states.The problem is that many designers create this situation unknowingly.
The DBB Letter of Agreement that you are reading is an agreement between the designer and the client and says that the designer will observe the contractors work.
What happens here is that a designer may legally observe and tell the CLIENT about the accuracy and quality of the work being performed by the contractor who has been HIRED BY THE CLIENT.
The designer MAY NOT hire, tell, direct or supervise the contractor DIRECTLY because that could be construed as contracting.
It is my belief that the wording in your Letter of Agreement is fine, and so is the DBB one. Both observe the intent of the law…that our agreement is with the client and that we are NOT performing any of the above contracting services.
This is a serious issue. I heard that recently that a designer in the Bakersfield, CA area was arrested and jailed (not for long I hope) for contracting without a license.
The other side of this situation is that you can get a contractor’s license and do these kinds of installations legally. You need to qualify for and take the test (not so hard), post bond and have the proper insurances.
I will share a secret …the job profitability is considerably higher with a contractors license.
Are you running a charity instead of a design business?
If you look in the dictionary you will find that the definition of a business is “an enterprise that makes money”
Do you find yourself working hard, long hours but not getting paid what you are worth?
If you are not making a good living in your interior design business you may be running a charity …or perhaps you just have a hobby.
Here are some questions to ask yourself. TRUE or FALSE
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You don’t have a separate checking account for your business.
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You don’t have liability and errors and omissions insurance.
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You do not use contracts, purchase agreements and purchase orders on your transactions.
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You do not pay yourself a salary on a regular basis.
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You regularly give clients far more time and attention than they are paying for.
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You charge less mark up or no mark at all on “expensive” items because you want the client to have it.
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You reduce your monthly design time bill before you send it because you believe that the client will not pay it.
If you answered TRUE to most of these questions than you are running a your own personal design charity…
Are you ready to stop this behavior and have a real design business with good clients who love your work and want to pay you?
Are you ready to make good money for your creative genius?
Tip #1 Make a clear and firm decision that interior design is not just you, but a totally separate thriving, profitable business organization. Then set the intention that you deserve to be paid well by the business for your time, talent and product.
Tip#2 Come to realize and accept in your heart that you have been given a divine gift, the gift of creating amazing beauty and comfort in people’s lives. The extent that you are touching people and sharing your gift with the world is evidenced by the money (energy) you create.
Tip#3 Consciously change your relationship with money to one that is caring, nurturing and attentive. Money loves attention and thrives under care. Acknowledge and celebrate every bit of money that flows into your life regardless of where it came from.
Tip#4 Begin by taking action now to set up a business format with “good practice” rules that set limits you will follow about billing for time, charging for and buying product and handling client requests.
Changing the way you think about your business will promote more business opportunities, finding better clients, more creative jobs and getting paid what you are worth.
Be sure to sign up and attend my FREE call “The 5 Critical Factors to Having a Successful Design Business” for more in depth information about how you can have the design business that you want.
Save the date, Thursday, April 19th at 4:00 PM PST and watch your inbox for your invitation.
General Contractor Referrals
Apr 10
Question:
I am having a hard time getting the General Contractor that I know and have worked with before to refer business to me. He acts like I am a bother to him and appears to be disinterested.
I feel like I have been trying to get this to work for a long time, what should I do?
Answer:
Move on! Find another contactor that “gets it.”
If this guy doesn’t understand the value of a referral relationship then it is time to move on. There are many contractors who are ready to develop their business and would welcome having a designer on their team to help them.
This contactor does not have to be someone that you have worked with before. It could be someone that you met in a networking meeting or a referral from a client who has used him.
Don’t forget that your favorite vendors could be a great source of referrals as well.
Can you design a space without knowing the budget? Sounds like a waste of time to me.
One of the most important pieces of information that you need to collect in the beginning or programming portion of a design job is an accurate budget.
In order to come up with an appropriate design you need to know if you are designing a Volkswagen or a Mercedes…there is a big difference in the quality and price of products and finishes used in a high-end job versus a tight budget job. There is also a huge difference in the amount of time you will spend designing details in a high-end job versus a low investment “make it look good fast ” job.
The problem you often find is that it seems next to impossible to get the client to give you a budget to work with because,
1) You did not clearly ask them for a budget number.
2) You did ask about the budget but they honestly don’t have a clue what it will cost.
3) You asked about the budget and you sense that they do have a number in mind but won’t tell you….the client seems to be afraid that if they tell you how much they are thinking, you will spend it all. Somehow they think that the total could be less if they don’t tell you and then they won’t miss out on potential savings. (very strange logic)
4) When you asked abut the budget they told you a number…but it is totally unrealistic with the goals that they have put forth. In fact it is silly.
5) The client says that they don’t have a budget. They want you to know that they have plenty of money… when they see something they like, they will just buy it! This usually is not quite the truth either.
6) The client actually has reasonable and educated number in mind and openly shares it with you. This seems to be rare, but it can happen. In this case you can happily get started designing immediately.
So, what do you do 5 times out of 6, when the client won’t give you a budget is or truly doesn’t have a clue what it will cost
Don’t despair there are some clever ways to get the information that you need.
You can help them create a budget right on the spot. And it only takes a few minutes.
First, be sure to ask permission…
“Would you like me to help you develop a realistic budget? It will only take a few minutes and then you will know what to expect.”
“Sure, that would be great.”
Tip #1 You need to speak frankly about the importance of knowing a budget before spending your time and the client’s money on designing something that might not be appropriate. Remember the client who can afford anything they want? You could say…“I would be really embarrassed if I showed you an $30,000 area rug when you were actually looking for a $4500.00 area rug.”
I guarantee you will get a reaction on that one!
Tip #2 Pick out an item that you know will have to be purchased for the space that they want to work on. For instance, it could be the sofa if you are talking about a living room or it could be the refrigerator if you are working on a kitchen.
Call out a price that you think might be reasonable and see if you client agrees. Use retail prices because that is what she knows best and find out what she is comfortable with. You say that she needs a sofa and it could cost $6500. 00. She says she saw a nice one on sale for $3995.
OK, that is fine. You will write down, sofa $3995 in your notes.
Now choose another item she will need and call out a price to find out what she will agree to. You are looking for her agreement; you want her to say, “yes” to you as often as possible.
It is easy to sense the direction that the budget will take by her responses. Keep going and one by one get a price agreement on all the things that she probably will need.
Tip#3 Add all the numbers up that you have collected and you have a budget.
Share the sheet that you collected the numbers on with the client so that she sees and understands how it all adds up. Then suggest that she share it with her spouse.
There are several powerful things happening here:
You have connected with her by giving her a valuable gift (the budget) and you did not give away any design and decorating ideas.
You did something no other designer did for her and you established yourself as a professional and an expert in your field.
This “gift” helps you as well because it tells you if this is a real job or something that you need to pass on.
Establishing an agreed upon budget right from the start is an essential part of being able to design quickly and efficiently so you make good money on your interior design jobs.
I teach all the details of this important budget process, step by step with all the worksheets in Designing for Dollars, the home study version of my Design Biz Boot camp 2011.
Watch for the announcement of the SALE of the last few copies of Design Biz Boot Camp coming to your inbox soon.
Question:
What do I do when the client has given me a budget and I am trying to stick to it but she keeps picking out things that are way too expensive?
I am afraid the when I present the final costs I will be so far over the budget that she won’t give me the job…
Answer:
This is actually a good problem! You can use this to your advantage quite easily.
Think of this as a budget on 2 levels, one that is on target and one that includes all of her “I love its.”
You are obligated as a professional to produce a good design for the agreed upon budget so make sure you have a good specification for every item that is price appropriate. Then on you budget sheet (we use an excel sheet, see Purchasing for Profit in out Design Biz Tool Box for “how to” info.) add an option for the item or items that she loves that are over budget.
This allows her to make the choice (and you can encourage her) to go over budget and have what she really wants.
This is a win-win situation because you completed the job on budget, you made the design better by allowing her to have what she really wanted and you made more profit on the more expensive item.
Do you get fearful when you need to quote your design fee because it seems like a crazy big number?
Do you find yourself in a panic when you are presenting a project that is way more expensive than you have ever done before? Like $100,000.00 more…
Do you hear a little voice in yourself saying “I wouldn’t pay her that much.”
Don’t worry, you are not alone in this feeling, it is a very common problem that we all deal with. Most of this can be traced back to our family money histories. The majority of designers that I coach come from comfortable middle class families where often they were praised and lauded for creating a great “look” for next to nothing. This is indeed a talent… but it causes big problems in design jobs.
One, it is often not what their upscale client is asking for.
Two, if they do it “on the cheap” it would take so much of their billable design time it would not be a bargain for the client anymore. Besides, HGTV is full of that stuff, we don’t need any more.
You need to know that you are not alone; ‘Pricing Panic’ has happened to every designer, at one time or another. A little edgy case of the nerves is not a problem, you can work through that, but watch out for becoming so terrified that you completely avoid talking about your fees or what this product will cost. Not talking about money will severely damage your business and your cash flow.
Another challenge happens when the cost of the project you are working on is so high that you sabotage your success by listening to your inner voice telling you “this room costs more than my house. This is crazy, my client isn’t going to go for this.” So you diminish the job, make it less, so that you are more comfortable with the number. Never mind that it used to be exactly what the client asked us for…
You do not have to be stuck here; there are ways to solve this problem.
Here are 3 great tips to help you conquer “Pricing Panic” and learn how to present your fees and pricing with grace and ease.
Tip#1 – Practice saying the “big number” out loud, over and over again until you can say it with conviction and total comfort. Practice while you are driving your car, while you are in the shower, anywhere you can you can speak out loud and people won’t think you are crazy. Practice until saying that number is no big deal. Remember when you are totally comfortable with that number your clients will be too.
Tip#2 – Try to remember that your own values and family history about money don’t belong in your clients design job. Our clients are often very wealthy and their ideas of value and price are very different from ours.
For example, just because you would probably not spend $400.00 per square foot for tile in your home, doesn’t mean that the client feels that way. If they are asking you for something special, exclusive and expensive, let them have it! They will be happy with their purchase and you will be happy with the profit.
Tip#3 – When you are speaking to potential clients about your design fees, emphasize the result of the service you have to offer rather than the process that you use. People buy results, not process.
Take the time to understand what the real design problem that they are trying to solve. Remember, they would not have called you if they could fix it themselves and affluent people are used to spending money to fix a problem. When you become the valuable solution to resolving this problem, you become the hero and are paid accordingly.
Remember, the more you get clear about the value you bring to a design job and talk about this on a regular basis the more you begin to realize and believe in what you are really worth.
Question:
I do pretty well doing my design jobs on a fee basis until it comes to accessories. Then it just eats up my time and I feel like I am working for $10.00 per hour.
I often must shop at retail stores that don’t give me a discount. I don’t have a choice… there are no wholesale accessory showrooms in my area. How do I get a payday for me when I have to shop at Home Goods?
Answer:
Very good question, here is what you do and what you don’t do.
First of all, you must exclude accessory shopping from your fee for services in your Letter of Agreement. This is where you bill hourly and add a sentence to your Letter of Agreement that looks like this…
Accessory shopping is available by separate agreement. This service will be billed at the Designers prevailing hourly rate, purchases will be billed at actual cost plus 25% (or whatever your purchasing fee is) and will require $1,000.00 (or what you will think you will need) seed money deposit.
Yes, you do charge a purchasing fee on top of the retail. It takes the same amount of work to buy it at retail that it does to buy it at wholesale. You take a deposit because you are not “the bank. ” This could get expensive and you must work off of the clients money, not yours.
You and the client, prior to you spending your time shopping must agree upon this arrangement. The best time to get this agreement is right in the beginning, in your Letter of Agreement.
If the client does not agree to this arrangement then don’t shop for them…
STOP…
DO NOT work for free, or say it is a gift to the client because I “should” have done more for them. This sort of behavior de-values your worth in the client’s eyes and keeps you from moving up into higher end jobs and clients.
Do You Work Alone?
Feb 15
Are you a one woman design studio?
Do you work out of your office at home?
This is actually a great business model; you have low overhead expenses and the freedom to make your own schedule. You can easily choose to be home for the kids in the afternoon or take off for a few weeks of vacation.
When you are working out of your home you can price yourself competitively and still make a good profit. Today many clients believe that a designer working out of her home will be a better value than a big firm… a definite advantage.
However there are some downsides to working alone…sometimes it is difficult to set boundaries and get your family to respect your working time. Some designers have told me that they feel unprofessional because their space is inappropriate for meeting with clients or product reps.
Do you know what is the biggest problem that single practitioner designers have that stops their businesses from being successful and profitable?
Not having anyone to talk to about their business.
They have no one to answer their questions, no one to help strategise how to profit from a particular kind of design job and no one to run their ideas by… no support at all. They have no way to find out if they have the right answer, so they do the trial and error method. Come up with an idea and see what happens.
The problem is, if they guess wrong, they lose the client. More often, they keep the client, make next to no money on the job and end up feeling used and grumpy. Either way, it is not a happy ending.
The truth is that this trial and error method results in frustration and very slow business growth. So how do single practitioner designers find someone knowledgeable to talk to?
Tip #1 Join a Professional Organization There are many professional organizations for interior designers, ASID, IIDA, IDS, to name a few. In order to connect with like-minded professionals, designers need to attend the local meetings so that they meet new people and expand their contacts. Many of these organizations have regular groups that that are easy to join, that meet over coffee or lunch to exchange ideas and share best practices.
TIP #2 Create Your Own Mastermind Group. Call a few designer friends, explain what you want to do and start your own group. Ask your designer friends to each invite one or two other designers and set a standard monthly time and place you will meet. Attracting Designers to your group that are at different levels of experience will make your Mastermind group rich with information and sharing.
TIP#3 Negative Energy? Leave Now! If everyone in the group is whining and complaining about their businesses, my recommendation is to leave immediately. Remember you and your business are the sum total of the 5 people that you are closest to. You don’t need to sit and listen to negativity; it will only bring you and your business down to their level.
Open up the space and another opportunity to connect to the right people will present it’s self soon.
Look Outside for Inspiration. You already know that rapid business growth doesn’t happen in a vacuum.
Design Biz Blueprint can keep you connected and get your questions answered so that you can grow your business. My Designers Success Circle, which is open to all Design Biz product owners, meets live every Fourth Friday afternoon for a lively discussion of what is happening in designer’s businesses across the country.
I do this call live, answering questions, resolving challenges and strategizing job opportunities for my members. This call is always recorded and sent out to all of our DSC members, so if you can’t make a call, you don’t miss a thing!
Question:
How do you monitor yourself to follow the 80/20 Rule if you are alone? I find that I like doing the 20% stuff more.
Note: The 80/20 rule says that 80% of your time should be spent on income generating tasks and 20% for other stuff.
Answer:
I think that we all like the 20% stuff more! However, if you need to make some money in your working hours you need to re focus your energy into productive tasks.
Learning to plan and spend your time wisely is a personal journey, something that you go after on your own.
The way to begin is to write down all the things that you did in a day and how much time you spent doing it. There is a great little form for this in the Forms and Facts Study Guide; you just keep it on your desk and pause twice a day and to jot down what your time is being spent on.
The action of writing begins to make us more aware of where our time is going.
Do this for 2 weeks and then take the time to have a little meeting with yourself. Leave the studio, go out for coffee with your notes and analyze what you are doing. Now you can make some informed decisions about what you want to eliminate, change or plan better.
Think of this as “baby steps” toward the 80/20 goal. When we start making conscious decisions about how we spend our working time we end up with more freedom in our lives to do the things that we really want to do.
The answer to that question depends upon what kind of first appointment the potential client wants and is asking for.
Any potential client need to be pre-qualified on the phone prior to setting that first appointment and using up your valuable time.
You will find many clues when you pay attention to the wording the client uses when making the appointment request.
Here are two typical but very different requests for a first appointment.
#1) The phone rings and you discover that this might be a potential client and she says to you …
“Will you came over and see my house? I want to hear your ideas.”
#2) The second potential client rings you up and says…
“I am considering redecorating my living room and I would like to talk to you about helping me with it.”
Instead of jumping in your car and running over there immediately, stop and ask a question or two first. You must clarify those statements, establish your boundaries and explain how you work before you set the appointment.
#1) is asking you to give away design advice.
#2) is asking you to interview for a job.
This is what you say…
Start by explaining how you work.
“I can meet you at your home (office) for a first appointment in 2 ways…”
“If you are considering hiring me on for your Living Room project, I would be happy to come to your home, get a feel for the scope of the job and see if we like each other at no charge.”
“Or, if you asking me to come to your home and give you design ideas and solutions, I can accommodate that request. Get your yellow pad out and start listing your questions, because we can cover a lot in an hour. I charge $350.00 (or what ever you choose) for this session.”
“Then ask point blank, which way would you like to work with me?”
In option #1, you will be meeting to discover the scope of the job so that you can set an appointment to come back with your Letter of Agreement the next day and sign up the job.
In option #2, you will spend an hour doing a “brain dump” with someone that might turn into a client. I recommend charging about three times your hourly rate for this particular service, depending on the travel time involved.
It would be wise to include one follow up phone call with this client so that you stay connected. I also recommend offering to the client a credit for the amount paid on this service if she hires you for a substantial job later on.
It is vitally important to establish your boundaries early and not give away your valuable design advise to potential clients. It is equally important to make clear offers for your services to potential clients so that they understand how you work.
I teach this strategy in detail in my Design Biz Blueprint training and coaching programs. I help Designers learn these kinds of strategies so that they can enjoy empowered and profitable design businesses. Check out the Design for Success Platinum Group Coaching Program here.
Question:
I enjoyed your call this evening and wanted to ask some questions.
In what circumstances would you recommend that I use an hourly rate versus a design fee?
Would you suggest offering hourly rate or a design fee both, at 3 price levels?
Answer:
My recommendation is to use a fee in all situations. Potential clients want to know what you cost and quoting hourly rate doesn’t answer that question. You will be hired more often when you quote a clear price attached to a very clear scope of services.
Your hourly rate is the baseline that you use to calculate your fee. It does not change because I don’t want you to offer your services at lesser rate. What I recommend is to offer the client choices that take different amounts of time.
Think of good, better and best. Good has the basics, better has most of what they need and best is you doing it all, start to finish. You figure out the time it takes to do each of these options and present the choices.
Happy New Year! Here we are at the beginning of 2012 and if you are like me you are thinking about what you want to accomplish in this New Year.
It is a time for fresh beginnings and new ideas. For my personal life, intend to get 3 yoga classes in each week, no matter what. On a business level I have my plan for my businesses pretty well mapped out for the year. Having written goals and a plan of action is the most important thing that you can do to ensure that your business goes where you want and creates how much you want for next year.
Sometimes designers skip over this important step because they don’t know how to go about creating a plan or they think it will be very difficult and take a long time. None of this is really true.
If you don’t have your plan “put together” or you are unsure about how to do it here are some simple steps to get you started.
Tip #1 Set a Big Money Goal. How much do you want to earn this year? Writing it down it down on paper starts to make it real and turn it into a commitment. This amount should be enough to make you stretch but not so big as to make it the amount unreal or not possible. Once you have your Big Money Goal number, sit down and figure out how many design jobs you will have to do to reach your goal.
Be sure to include some smaller jobs along with the big ones to keep your cash flow balanced.
Tip #2 Who is your Target Client? Do your research, know your target client is and how and where you can get yourself in front of them. Aiming your sights on a specific type of client with a particular sort of job will get you the business that you want. Feeling desperate and wanting to work for anyone who will hire you is a short-term strategy that doesn’t turn into a good business model.
Tip #3 Create a marketing plan. Make a list of all the things that you could do to bring yourself to the attention of your target market. Remember that your best clients come from referrals so plan out how you are going to get next to these clients or the people who they trust.
Extra Tip: Remember that in order to get a referral you need to ask for it, don’t just assume that a favorite client knows that you want them to refer their friends. Tell them!
If you want to know more about planning your design business year and are interested in getting more in depth detail about these steps then sign up for my
3 Strategies for Planning Your Best Year Ever FREE CALL on Wednesday, January 11, 2012 at 4:00 pm PST, 5:00pm MST, 6:00pm CST, 7:00 pm EST.
I will be teaching in depth information and detail about building your design business plan for 2012.
Sign up here for the FREE CALL
Question:
I understand what you mean about about being clear on who I want as a client, but what if those people just are not calling me?
All I seem to get are the same old clients or their friends who just want another window job or want me to help them change the bathroom wallpaper. I know that I should say no to them, but I really I really need the income now.
Answer:
Most of us, due to the current challenging economy, do need to pick up and complete all the jobs that come our way, whether or not they are our desired target market.It is important to take care of the “money side” of your life first. So if you need the income, grab the job, but don’t make those little jobs your life. Beware of filling up your available time with little stuff just to feel busy.
Spend the appropriate amount of time to complete those little jobs. That means spending only the amount of time you are actually being paid for, then move on.
Keep your eye and your energy on your target and the opportunity for what you want will present itself.
Designers often spin their wheels trying to figure out who will buy their design services. They often spend their time trying to market their services to people who don’t want help, or don’t think they need design services (even when we see that they obviously do.) Worse yet, there is a big group of people who want design services but cannot afford to pay. None of these situations will get your design business going and trying to build your business this way is an example of “thinking backwards.”
Consider this…
Instead of “who wants what I have?”, think about looking around you and finding out where there is a design based problem that you know how to solve. Here are some examples:
I know that in some areas empty-nesters, both professionals are moving back to the city and need help creating their new urban lifestyle. They have the desire for an all new environment, they have a double income so they can afford what they want and they have no time to do it themselves. They need help…you could solve this problem.
Here is another one; in suburban areas there are homes built in the 1970’s, 1980’s and even the 1990’s that are in need of remodeling. Homeowners are not selling their property now and buying a new; they are waiting for the market to get better. However they are tired of their old stuff and want new construction details and finishes in their homes. They know that the work must get done at some point and they are long time homeowners so there is plenty of equity in their property. These people want to enjoy their homes now. They need your help…You could solve this problem for them and have a good business too.
These examples each have 3 three things in common.
Step #1 Recognizing a Problem Exists. This potential client realizes that they have a problem that they cannot or don’t want to solve by themselves. They are actively looking for a solution to their problem.
Step #2 Presenting Yourself as the Solution. You know the answers to the problem and you can provide a convenient resolution and pleasant experience for the client.
Step#3 Receiving Payment. Affluent people are used to and comfortable with throwing money at a problem. They expect to and want to pay you for your design services and good solutions.
Look around you for design problems that need solutions. Check in with these 3 steps to see if you have found your niche market. Remember you must be able to answer yes to all three steps to have found your niche market.
Once you have found it, a niche market is a great way to profitably build your business.
Q. It seems like if I just go after potential clients who have a problem that I can solve, I won’t ever get to do the kind of design work that I want. What about that part where I am doing the work that I love with the client that I love?
A. There are two ways to go about this. First look at your target client group and apply the 3 steps: What is the problem? Can I fix it and will they pay me?
If all three are a fit you can get started on doing what you love right away.No worries.
If all three steps are not a fit with your target client, say they don’t know that they have a problem…
you can’t build a business on them.
Let’s face it, you need to generate some income. Consider this…
Find a design problem that you can solve for a group of (not exactly) target clients who pass all 3 steps so that you have what is known as a “cash cow” for your business.
Once the pressure of cash flow is off your back, you can spend time on developing how to serve the clients and the part of the business that you love the best.
Charge for Travel Time?
Dec 12
Hi Terri
I am working on how much to charge my client for my time on the Letter of Agreement and I am wondering about travel time…
This client’s property is about 1½ hours away from me and I will have to go there multiple times to complete the job.
Should I calculate a time charge for the time it takes to travel to and from her house?
Would it be the same rate that I charge when I am designing for her?Susan
Hi Susan,
The answer is yes, you should charge for travel time.
This is valuable time that you could be using to design for someone else and you would be paid for that time.
I find that most designers charge a lesser rate for travel time, often half the designer’s regular rate.
When adding travel time to a Letter of Agreement it is important to be specific about the number of on site trips you have included in your agreement. Think through the job and project out the critical points that you need to be there to present or make sure that the work is completed correctly.
If it looks like you are going to run out of on site trips before the project is done you must have a conversation with the client before all your time is used up to see if she wants you to continue.Terri
Hi Terri,
I have a quick question. I am starting up my business again after 6 years or so and I am in the process of getting a web site. Unfortunately another designer has taken my domain name. Because of that, I am re-thinking the name of my business and considering all options. I feel that having my name in the business is important, as that is how people will remember me but I want your opinion. I am hoping to have new logo and stationary done before the next Designers Success Circle call, so can you answer this question?
Thank you!
Linda Supron
A. Dear Linda,
It is absolutely a great idea to use your name in the name of your business. You want people to be able to easily find you on the web. What better way than to use your name?
Having said that, there are many ways to use your name in a business names. Linda Supron Interior Design, Linda Supron Design, Linda Supron and Associates, Supron Design Group and on and on.
I would suggest a few days of brainstorming a big list to choose from, and then see which of those are available as a domain name. Try for a .com name rather than the other versions because it is the most widely recognized and used.
Out of that batch of names, choose the one that feels like the most authentic description of you, after all, this is the beginning of your personal brand.
Beauty and Success,
Terri
Q. Hi Terri,
I was just wondering if a Letter of Agreement and a Proposal could be one? I guess what I am trying to ask is; can I combine the two documents?
Karen
A. Dear Karen,
I would not recommend trying to combine the two; I think your clients would be confused. The public and your new clients don’t understand how we work or exactly what it is that we do. The more we can clearly educate them as to our services and benefits, the better off we all will be.
It is important to clearly separate and define the design portion of your work. This is the part that utilizes your creative genius, develops a “one of a kind” space for the client and takes lots of time to work out all the details. The time that it takes to develop all the purchasing specifications is part of the Letter of Agreement. That means that everything that needs be purchased, who it will be purchased from and how much it costs is provided by you as part of your scope in the Letter of Agreement.
The Proposal to purchase merchandise comes after the design work has been completed. This is just the agreement to buy the merchandise that has been specified in the Letter of Agreement above. A purchasing/procurement fee may be added to the merchandise to cover the administrative work to produce the purchase order, track the incoming order and set up delivery.
When you clearly separate the two tasks your pricing remains transparent and your clients are well informed and happy.
Beauty and Success,
Terri
Q. This question is from the last Design Success Circle call. Unfortunately the recording was flawed so here it is in print:
“I can’t seem to find a source for plumbing fixtures that gives me much of a discount or a wholesale price. Is there such a thing or am I just looking in the wrong place?”
A. You are looking in the right place; this is just a kind or category of product that you can only purchase at a discounted price but not at a deep wholesale price.
There are a couple of good reasons for this situation.
First, plumbing dealers provide some very important support services for us. We rely on their expertise to know their product lines and make informed recommendations to us. The most important thing to me is that they know what all those little parts are to make my fancy shower valves to work properly.
I don’t want to learn how to do that, I want to pay them to do it for me.
The second reason is that the plumbing dealer made a substantial investment in product and showroom in order to be able to sell these particular product lines. We buy one or two pieces of this or that so we pay more for the privilege of purchasing that way.
Beauty and Success,
Terri
If you have been doing design jobs for awhile you know that to find the appropriate accessories for a design job can take forever to complete. Often the accessories come from retailers who do not discount to the trade, which makes profiting from mark ups difficult or impossible.
This process of accessorizing can take up as much time as selecting the finishes, fabrics and furnishings for the job and often results in you not being paid for the time that you are spending. So, why do we do it?
Because we want to see the design job completed as we envisioned it, just as beautiful as we imagined it to be. It is unfortunate that we want it to be right so badly that we are willing to work for free to see it completed. This of course is a bad idea, it just results in clients not respecting our time.
Short of doubling the amount of your Letter of Agreement design fee to the client, what are you supposed to do? I know that doubling your fee will be a hard sell. So here is how you protect your exposure and still get the job finished the way that you want it. This is not too difficult, but it does start in the beginning when you write your Letter of Agreement. It just takes a little “pre-framing” with the client before you get to the shopping for accessories part.
Here are 3 simple strategies that will help you make accessorizing a profit center in your business.
Strategy #1 – When you write your Letter of Agreement be sure to include a paragraph about accessorizing. State that accessories are not a part of this agreement unless you accidentally stumble on them in the course to developing your design.
Strategy #2 – Then add to your Letter of Agreement, ‘accessory shopping and placement is available as an additional service at $ (your hourly rate) plus a (15? %) purchasing fee’. It doesn’t matter if you don’t end up doing accessories, your client now will know how it works.
Strategy #3 – Further, add to your Letter of Agreement, ‘an additional deposit of ($ 1,000.00? or more) will be required for seed money to get started on accessorizing a portion of this job. All accessories placed in the client’s home must be approved or declined within 24 hours of delivery and set up. All time charges for shopping services are due and payable whether or not accessories are approved’.
Use these simple strategies in your next Letter of Agreement to make accessorizing a profit center in your design business.
Every designer needs a team of good people behind her in order to create a successful business. The better trained and more efficient the team is, the more profitable the designer’s business is.
Unfortunately, what I hear most often is …
“I can’t afford to hire someone now; I am just getting by myself.”
While this may appear to be true, it is also true that you cannot grow your business if you keep trying to do everything yourself.
You will run out of hours…
And energy, and inspiration…
Here is the problem, you are able to complete your design work but there is no time left for marketing for new, good clients.
If you don’t consistently market your design services you will not get those bigger jobs and better clients.
What is worse is you are at risk for having long periods of time with few or no clients.
This is not a good situation to be in….
So how do you solve the “what comes first, the chicken or the egg” problem?
Unfortunately you don’t get to see the answer from where you are standing now. You just must take that leap of faith and just step into change.
For some simple strategies you can employ to grow your business by making the “leap” into hiring an assistant, read on…
Continue reading “Why You CAN Afford to Hire Help” »
Are you working too many long hours? Are you doing everything yourself? Are you the chief designer, bookkeeper, draftsperson, researcher and sample returner? Have you had enough of this?
You may be ready for the next step. It may be time for you to develop a team to support you and your design business…
I often hear, “I can’t afford to do that, I can’t afford to pay some one, not now.” It may be that you cannot afford not to do it…
Here is the truth; there are things that you do that you are highly paid for, like creating a design concept, presenting to and working with your client and marketing for new business.
Then there are things like CAD drafting, research, bookkeeping, follow-ups and pricing that are not highly paid. It would be more cost effective for your business to have a less expensive person to do these tasks so that you can do more of the highly paid time.
Remember that this less expensive time is billable to the job, generally at 2 ½ to 3 times what you are paying that person. The idea here is that your assistant’s billable time pays for their salary and leaves you valuable time to go out and get more business.
Sound good? Want to know how you make this change? It really isn’t hard.
Continue reading “Are You Working Too Much and Not Getting Anywhere?” »
I know that in this challenging economy firing a client seems like a ludicrous idea but there are times when it just needs to be done in order to let better clients and situations come into your life and work.
The question is: how do you know that you need to fire a client? There are several situations that require you to take action.
The first is the client who not paying their bills or paying only part of the bill and the balance is increasing every month. This is an obvious “red flag and it has a direct effect on your ability to contribute to your families income.
How to gracefully say NO
Aug 18
Many designers begin their careers by helping their friends with their homes or offices for free. This helps them build confidence in their craft and gives them something to photograph for their portfolios. This is all good.
The problem is that this practice can carry over into a habit of not charging clients enough and taking care of a group of friends that have come to expect a lifetime of free design service.
Here is the scenario; every time you see this friend socially she has another design question or problem for you to solve.
These requests can come at the most awkward times. Looking at and giving advice about a bathroom when you are relaxing and trying to enjoy a party can be annoying at best.
So what do you do and say to these friends or acquaintances that don’t realize that design is your business and they have stepped over the line?
This is not a difficult problem to solve; here are 3 easy tips to follow to get your friends to respect your boundaries.
Tip #1 You need to realize that giving away your valuable time and advice may seem like you are being helping people but by doing so you are diminishing your self worth.
When you develop a habit of giving away your time and expertise it becomes hard to charge the appropriate amount when the good client opportunity arises.
Another problem is that free advice is often not valued nearly as much as “paid for” advice.
Tip #2 You must make a solid decision to stop this self-diminishing behavior.
Next write down on paper what your clear boundaries are around working for friends and acquaintances. Be totally clear about what you are willing to do and not do for friends.
Tip #3 Write out a script ahead of time and practice what you will say so that you are ready when the next occasion arises.
This could be as simple as “Call me at my office on Monday and we will set up an appointment.”
When she calls you in your business like setting it will be easy to treat her like a client. Tell her that you can not afford to work for free any more and this is how you charge for your design services.
Or when you are cornered at a party you could be bolder and say…
“ Sure, I would love to help you remodel your bathroom, it will only be 5 or 6 hours at $125.00 to get you started. Just call my office and we will book an appointment.”
Practice your script out loud until your body feels totally comfortable with your statement and you will be ready the next a friend or acquaintance asks for or expects free advice.
Has this ever happened to you?
A good Designer has created a plan that requires contractors and sub contractors to build and install interior cabinetry, tile or whatever is needed according to this designer’s drawings.
I
When the job was sold to the client the cost of the time to project manage this installation was not included. This could be because of oversight on the designer not including it in the fee or the Designer is billing by the hour and the client is tired of paying her or the client refused this portion of the design fee.
I
But here is the catch…
I
The designer goes out and manages the project anyway. She is there almost every day making sure that everyone is reading the drawings correctly and the job is done right.
I
The client is aware of this and realizes that he is getting all this support, knowledge and time for free. This client even calls her on a Friday night and expects to see her on site on Saturday morning and she shows up.
I
What a deal for the client!
I
The designer is stressed out because she is not getting paid for all this, upset that the client isn’t even acting grateful for this gift and she doesn’t have time to market for new business because she too busy managing an unpaid job and her checkbook shows it.
I
So, whose fault is this? The designer…
I
To her credit, she is working from a place in the heart where she cares so much about creating, designing and helping people that she is willing to do it for free.
I
While this big heart is an admirable trait, it does not serve her well in her business…
I
The result of this behavior is the exact opposite of what she thinks that will happen.
The client will not be happy and grateful that she has done this and then hire her at a higher fee for the next job.
I
No way…
I
Instead the client realizes that they don’t have to pay her at all…
I
They don’t value the work that she has done, don’t believe that she is an expert or follow her design advice. It is truly impossible for this designer to move her business “up-market” when she is behaving this way.
I
Sound familiar? Don’t worry, this can be resolved….
I
Here are 4 simple tips that will help you to end this self -defeating behavior and move you toward the design business that you want.
I
I am sure you have heard a lot of different opinions on this subject but here is the truth…
One of the most potent ways that we can influence those around us is through the rule of reciprocation. This rule says that we should try to repay, in kind, what another person has given us. If someone gives us a birthday gift we should remember their birthday with a gift of our own. If a couple invites us to a party we should be sure to invite them to one of our ours. By virtue of this human reciprocation rule we are obligated to the future repayment of gifts, favors, invitations etc.
So, the answer is…yes we should give something to them.
We give a potential client a gift because we want to utilize the law of reciprocation and have that client return the favor by hiring us.
The question then is…What do you give away to a potential client?
First, is what you DON’T GIVE AWAY… Continue reading “Should You Give Away Something on Your First On-Site Visit” »
Are You a Gucci or a Macy?
Nov 19
A designer recently asked me if driving a Toyota Camry was hurting her ability to sell high end jobs and preventing her from moving her business up into more high end clients. Should she splurge and buy a BMW?
In some communities and some client markets it is necessary to look that good. More importantly, if you feel awkward or embarrassed about the car that you drive, then it is likely you appear to your client to be less than confident. Lack of confidence will cause you to be unsuccessful when presenting high end concepts and products. Buying an expensive car will make you look good but will not solve your confidence problem.
Continue reading “Are You a Gucci or a Macy?” »
Is your own attitude and belief about the state of the interior design business and what your potential clients won’t or will not do, keeping business away from your door?
It is entirely possible and even likely that your “nobody’s buying anything, there aren’t any good clients, I don’t have any money” statements and mindset is keeping you from having a thriving design practice.
A negative attitude prevents you from seeing the opportunities that are all around you. It compares to wearing tinted sunglasses while you are doing color selections. Nothing you see will be the true color and your selections will be all wrong.
