Clients more frequently are seeking design consultations and advice, rather than hiring designers to design and manage projects, often resulting in lower fees and fewer billable hours for the designer. This is making it tough for sole practitioners and smaller firms to remain profitable. In the past, when designers wanted to increase their revenues, they would focus on selling clients more products. Those opportunities are becoming harder to come by now, as more and more clients choose to go online and do their own purchasing. Designers need to be looking for other sources of revenue to sustain their businesses and maintain their incomes.
Some designers have sought to enhance their revenues by creating products to sell to clients and others. As I advised in a recent blog, however, without ample contacts and an aggressive marketing effort, diversifying into product design or manufacturing is not likely to substantially increase revenues and could end up adding to expenses with little or no return.
In recent conversations with clients struggling with the changes going on in our industry, I have been counseling them to consider pursuing alternative sources of income to supplement their design revenues. By alternative, I mean sources outside of the interior design industry. Depending on where you reside, there are, for example, at present many good real estate investment opportunities. Since designers frequently have good contacts with residential and/or commercial real estate developers or sellers, this seems to me a fruitful avenue for designers to pursue. Of course, as with all investments, there is a certain amount of risk. You need to decide how much risk you are able and willing to afford, and do your homework thoroughly before investing.
If you’re contemplating what you should be doing to grow your business or enhance your revenues, please contact me. I’ve helped many designers to develop strategies and plans that have allowed them to transition to their next level of success.