10 Things I Wish Someone Had Told Me When I Started a Design Business

By Tobi Fairley

Starting your own design firm is such an exciting adventure.  I set out with my design business ahead of the curve as I have both an accounting degree and an MBA to pair with my design degree.  But even with all this education, there are some key things that you just don’t learn in school.

After 12 years of owning my own firm, there are a few obvious lessons that would have been so much easier not to have learned the hard way. Here is my list of the 10 things I wish someone had told me when starting my own firm that would have saved me tons of time and money.  I hope they help you do just that.

1. Just because you are good at your craft doesn’t mean you should own your own business.  This is the basis for the book The E-Myth Revisited, and I wish someone had told me to read it before taking out on my own.  I probably would have still started my firm since I do have a strong business education, but I would have known early on that creating systems for our processes and procedures can make a person who is good at their craft, have success in growing a business and maintaining a high-level of customer service.
2. Delegation, not abdication, is the only way you can keep your sanity. Delegation is a process for handing over a task or job to someone else with a specific list of criteria, so there is little room for error.  Delegation requires supervision and guidance.  Abdication on the other hand, is “dumping” tasks in others laps with little information or feedback. Unfortunately, if you have no business systems in place, and you are feeling over-whelmed, dumping is exactly what you do as a business owner. The results you get in return will be less than you expected and extremely frustrating.  Giving those on your team a chance to succeed with proper delegation prevents hours of agony.  Yes, it might take a bit more of your time on the front end, but the results are worth every second.
3. Owning your own business means the freedom of setting your own hours.  Since being a business owner, I often say that being the boss means you can work any time you want. Yes, you get to decide which 12-14 hours a day that best fits your schedule.  Don’t get me wrong, there are some perks to being the boss- like getting to attend my daughter’s school functions. But thinking that as the boss you will work less than you did as an employee is a myth.  In fact, it is just the opposite. To have a successful firm, you are often working long after all your team has gone home to their families. Being the boss has as many sacrifices as it does perks.
4. Just because you are a good leader, doesn’t mean you are a good manager. I just assumed when I started my own business that I could be an inspirational manager of my team.  Boy was I wrong!  If I had been able to recognize early on that the characteristics that make a great entrepreneur and leader are not cohesive with those that make a great manager, I would have avoided years of frustration and disappointment.  I now know that I am much better as a visionary and I need to be operating at the 40,000 foot view, while having a savvy manager making sure that all the day-to-day operations run smoothly.  Yes, I am still highly involved in design, but from a daily operations standpoint, I don’t have to be involved in every single decision like which mover we use, or when we deliver a sofa to a client.  I have set the standards and systems in place and there are people that are much better than me to make sure that these systems are implemented with great attention to detail.
5. Think like your employees if you want them to stay and be happy. I grew up being exposed to our family telecommunications business that my great-great grandfather started. My dad has been the CEO for over 30 years.  It was a business where the employees were extremely loyal and many stayed for 30 or 40 years, sometimes more.  No one told me that those days were over when I started my firm. So it came as a great shock to me when I was lucky to have employees stay a year, maybe two max.  What I learned after having a revolving door of 20 and 30-somethings work for me over the years is that top-down management no longer works.  People no longer want to be told what to do, but rather want to be inspired to be great and want to be part of something meaningful.  So what I know now that I didn’t know even a year or two ago, is that to keep people happy, fulfilled and willing to give you 100%, you have to put yourself in their shoes. You have to think about what would motivate you if you were them, and you have to be flexible in how you structure both their position and their rewards.  Only then will you have the kind of loyalty that my dad’s employees had when I was a child.
6. There is such a thing as an ideal client.  Early on when I was just trying to pay the bills, I thought that I had to accept every client that came along.  It never occurred to me that certain clients were more of a fit for my firm than others.  Today, we are very adept at identifying our ideal customers and those are the ones who are ultimately happy with our services and prove to be profitable.  It is ok not to take on a client that doesn’t understand your style or your vision or your fees.  If you take on a client that isn’t a fit, even if you think you can’t afford not to, you will most often lose money and won’t be available when that right client comes along.  Last year in the midst of the economic downturn, we forgot this valuable lesson and once again took on a few “not ideal” clients feeling like we needed the cash.  And what did we learn? That it still wasn’t a good idea and that we still lose money on clients who are not a fit.  So what we really can’t afford to do is take on a client that is not right, no matter how low our bank account. They will do more harm than good.
7. Leave retail to the experts! It was so much fun shopping for inventory early in my business.  At the time, I had a retail store and I got a little carried away with purchasing things that I thought my customers would like.  What I soon learned is that there are companies and big box stores who are much better at retail than I and that it was very difficult to compete in the retail sector as a small business.  It is never a good idea as a designer and small business owner to buy a lot of inventory. Most of the things I purchased sat on my showroom floor until they were either damaged or went on sale, which usually equaled breaking even at best and often worse…a loss.  I think tying up my much-needed cash was one of my biggest mistakes to date and one that took years to recover from.  I have no regrets since the best lessons are often the hardest learned, but leaving retail to those who focus all their efforts there is a good idea.  It was a distraction for my firm most days, and was a second full-time job for me buying, merchandising, and selling retail goods.  Yes, having a showroom seems glamorous, but I now know that it is rarely profitable and as hard as I work, I prefer to have the profits to show for it.
8. Hire slowly, fire quickly. Hiring and firing are two of the hardest parts of being the boss.  It is such a stressful situation to go through the interview process, especially because by the time you decide to hire, you are probably in great need of additional help and desperate to get someone trained and relieving some of your workload.  But what I have found is even harder than hiring, is letting someone go.  Most people have a hard time terminating an employee that isn’t meeting the requirements and expectations of their position and often keep a less than effective employee on the team way too long.  This results in lost profits, and damages the morale and efficiencies of the rest of the team.  So as insensitive as it may sound to those non-business owners, making sure those you hire are a really good fit and being quick to move on from those who are not, is key to being successful in business.  I use a 90 day probationary process for all new hires with great success.  This allows you to test-drive potential employees for 3 months at a reduced rate, in an intern role, to ensure they are a perfect fit for your firm. Then when you know they are just right, you can offer them a permanent position, increase their wage and start their benefits
9. Don’t put all your eggs in one basket… Diversification equals cash flow.  It took the economy going into the tank to help me understand the need for diversification in our income streams.  For years, I was only focused on high-end design.  And though I am a fan of sticking to what you do best instead of doing several things mediocre, I never realized that if your key area of business diminished, it could be very challenging to stay afloat.  I am now a big fan of “making money while I sleep, and this is something that I would have loved to understand early in my business.  Identifying income streams that build on your core competencies and are a complement to your main area of expertise can pay the bills while waiting for that next “ideal client” to arrive.  I have now become an expert in identifying these opportunities for my own firm and for other designers, so we never feel the pains of a recession in quite the same way again.
10. Big is over-rated. I was focused on growing my firm for a decade.  I thought that being big was a sign of success. But what I learned is that it is the way to an empty bank account.  Staying lean and mean can be a good thing.  Outsourcing can be instrumental in keeping your fixed costs in check.  And though my firm is pretty large at 10 employees, a 6000 square foot building, and a 10 year lease-had I known then what I know now, I likely would have made different choices. Since I am a fan of making lemons out of lemonade, I am now in the business of helping other firms stay lean and mean, which I think is brilliant business in this economy.  We contract with other designers using our expert team as a virtual staff for firms who understand that being lean means being flexible and that having a big payroll isn’t easy to support.  An added benefit to virtual staffing is that you will spend little time managing employees and more time doing what you love…design. I think virtual staffing is one of the best ways to weather this economy and be able to adapt and change your business as opportunity arises.

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Tobi Fairley is a nationally-acclaimed interior designer based in Little Rock, Arkansas. Named by Traditional Home Magazine as one of the Top 20 Young designers in America in 2009, Tobi’s work has graced the cover of House Beautiful and been published in Traditional Home, Southern Living, and At Home in Arkansas numerous times.  Tobi recently launched her own fabric line and will release several other products lines in 2012.  Her DIY design service InBox Interiors and her Design Camps have been wildly successful.  Tobi recently launched Tobi Fairley and Associates, a consulting group dedicated to helping firms with the business of design. She also blogs at Tobi's Blog.