EP #58 | 2 Metrics Every Designer Should be Tracking

Welcome to the Designers Oasis podcast. I'm your host, Kate Bendewald. If you're tired of one-size-fits-all all advice to running your interior design business, you're in the right place. Join me each week as we dive into topics to help you run a thriving interior design business. Without the hustle. We'll talk about the business of design, but also mindset and mental health because I know when you thrive, so will your life and business. It wasn't that long ago that I stepped away from my corporate interior design job to build my own design business so that I could realize my own creative dreams, have more time with the people I love, and serve my clients at the highest level, while making more money than I ever could have working for someone else. It wasn't always easy, and I made my share of mistakes along the way. Fast forward to today. And I've learned a thing or two. Since then I've built multiple six-figure interior design businesses on authentic word-of-mouth referrals with many repeat clients. And I want to share it all with you the ambitious, inspired, and I get it occasionally overwhelmed interior designer who shares this dream of transforming lives through the art of interior design, You can do this. Thank you for letting me spend part of this day with you. Let's get to it.

Hello, there and welcome back to the Designers Oasis podcast. I'm your host, Kate Bendewald. And I am thrilled to be hanging out with you today. So today we are going to talk about numbers metrics, What are the two metrics that I think are the most important numbers for you to know in your business? We're gonna get to it here in a moment.

But first, I have a couple of quick announcements. First, on September 21, only inside the interior designers business blueprint program, I will be doing my hiring for success masterclass live, it's the three steps to building a dream team. And we're going to talk about all things hiring, focusing especially on who you should hire helping you to figure out what's the right role. Is it a design assistant? Is it a senior designer? Is it an administrative assistant, local, virtual, we'll get through all that. We'll also talk about writing a job description that is compelling, but it's also grounded in reality. And also, of course, how to onboard your new employee or a third independent contractor. Whatever your staff member ends up being, we're going to help you think through how to onboard them so that they have the information they need to be able to really hit the ground running and work independently. And with trust because, well, that's the whole idea. So that's September 1. It's only inside the interior designers business blueprint. If you're curious about our program, I'd love for you to join us. We have a lot of fun inside, you can go to designers oasis.com Ford slash blueprint. To learn more, we have a guest expert every month if we don't have a guest expert, I come and do a deep dive on on a subject. We also have our live q&a, we have our resource library, our community, it's good. It's a fun time, I hope to see you there.

Also in October, we're going to do a high point meetup. So if you are going to high point, I'd love to catch up with you. What we're going to do is we're gonna put together a private chat, either on WhatsApp or discord, not sure yet, but what I want you to do is go to designers oasis.com, forward slash High Point. And there you will find just a quick little form, put in your name, your phone number, and I think we're gonna also ask you what city you're in, because what we want to do is to help you be able to connect with other designers, voices, podcast listeners, other interior designers, and what we'd love to do is to not only help build community but if you need to find somebody to bunk with or to travel with or you just don't want to go it alone. You want somebody to walk around the showrooms with we'll help you do that. Hopefully you can meet some people in your area so that after high point you guys can take your new budding friendship back to whatever town you came from. And I'd love to just be able to say hi and see you hang out, it'll be a good time. super casual, super informal. And I'm just looking forward to seeing some faces. So that is in October. So again, go to designers devices.com forward slash high points, send us your information. And as soon as we get our act together on our end, we'll send you a quick email and say, Hey, this is where you can join us. For a private group chat. We'll we'll keep the chat open, probably a couple of weeks before high point, of course, during high point and probably the week after, before we retire that group, that it should be a fun time. I'm looking forward to it.

Okay, what else? November mark your calendars we have our annual master planning workshop for interior designers. This is the fourth year I believe, and that is on November 16. Okay, the annual master planning workshop is a paid workshop. Unless you are a inside our blueprint program, it is free for free for our students. It is a fun time, it is a lot of information last year, I think it was a solid two hours this is we go through a lot, right. But we look I'm gonna help you look at your past year, what's been working, what's working well, and how do we double down on that? What's not working? What what needs? What has room for improvement? And how do we create some action steps moving forward, what sort of mindset traps have do we need to check so that we can really unlock some of those things that might be keeping us back. And then of course, I really want to help you get clear on your financial goals for the next year, and help you back in your services so that you have a game plan. And you can really kick off 2024 in style. All right, and most of all, with clarity, because let's be honest, clarity is really what we're after. Anytime you feel confused or lost, that is really where creativity starts to dwindle, we're create it's a Creativity killer. So we want to help you get some clarity and excited for the new year. So again, we don't have registration app for that yet. But Mark your calendars. It's on November. What did I say? 16th, November 16. And of course, if you're on our mailing list, it goes out each week, you will be sure to hear about it.

By the way, our email list just got a glow up. So make sure you're on it. It's called the brief and it comes out every Thursday. Unless we're taking a break, we did just take a little quick break for the summer. But inside the brief, not only are you getting the earliest announcement of podcast drops whenever we drop a new podcast, but I am dropping in there. Anytime I find all kinds of stuff really tips, tricks that are only found inside the blueprints, little technology tricks that I find I like to throw those in there. Anytime I find a really cool new line furniture, lighting, rugs, whatever, I want to share that with you. And so there's a little section for that. It's always a little bit different, but they're just really bite sized informational nuggets that we've been getting really great feedback, you guys are loving it. And it's nowhere else except in the brief. So make sure you join the brief. It goes out every Thursday. And it's a fun time. And that's where you'll make sure to get all the announcements for what's going on inside the interior centers business blueprint program.

Oh, actually, we have one last announcement, our new segment, dear Kate is going to be starting soon. And this is our new advice segment. And what's gonna happen is I'm going to take listener submitted questions, and I'm going to answer them on the show, oftentimes with a guest, because we do have some guests planned for the Fall coming up interior designers. And so you'll not only get my spin on your question, but you'll also get the spin from another interior designer. And so if you have a question that you want us to answer, whether that's a mindset question, whether it's dealing with something sticky or challenging in your business, go ahead and send it to us. And you'll do that at designers. oasis.com. Forward slash, dear Kate. All right. Links to everything that I just talked about are in the show notes on your podcast player below. I hope to see you and hear from you, and chat with you soon.

All right. Let's get to it. So today we're talking about metrics when it comes to running your business. Have you ever wondered, what numbers what information is really important to know? Because let's be honest, there are a lot of numbers in our business. All you have to do is look at your last p&l or balance sheet to know there's lots of numbers. Look, I did not decide to become a professional interior designer because I wanted to crunch numbers all day. And that's not what I'm telling you either. However, numbers tell a story. They provide insights. And I will just tell you that most designers unless they have a business background, they don't know what numbers matter. And in fact, it took me a really long time to figure this out. But once I did, I realized, gosh, this is the information that is really cool. Call and it really helps me pinpoint what we need to work on. Okay, so we're gonna talk about that today. So what I want you to know is not only to know what numbers matter, but how do you make sense of them? How do you put them all together? You know, you may look at things like your p&l or your balance sheet, and it's only going to give you the big picture. And yes, you need to be looking at those things too. But if that's the only thing you're looking at, it's like looking at the cover of a book. And maybe reading this at NASA said, Not y'all I cannot talk today. Synopsis on the front flap, but not actually reading the book and thinking you know what the story is about, okay. So you may look at your social media, following followers and numbers. And that's somewhat helpful. Obviously, the more followers you have, maybe the more likely you are to have traffic to your website, I don't know. But that's really only the beginning. And that's only if those followers are actually engaged followers and your ideal client, you get the picture, it's not going to give you any insights into your actual customer behaviors, or what's working inside your own business.

So I wanted to just share with you the two metrics that I think are the absolute most important numbers you need to know in your business. Okay, so the first number is your conversion rate. This number tells you how well you're able to move someone to become your client. How good are you at moving somebody to become your client? It's that simple. And how, how cool would it be just to know that number know that percentage, like, it's, it'd be pretty helpful. In yet, it's kind of not just one number, it's a combination of a number, a few numbers. So let's talk about it. First, I want you to think about what a typical client journey looks like. I'm gonna give you a pretty typical example.

So first, let's say somebody lands on your website. How many of those people turn into somebody that books a discovery call with you? Okay, that's one conversion rate, right? Of those people who book discovery calls with you, and you actually get on the phone with them? How many of them were quality leads, meaning, these are projects and people that you really would be excited to work with. All right, of those people. How many of them turn into in person consultations of the people that you have consultations with? How many of them say, Hey, I'd really love to work more with you. Can I get a proposal? So there's a request for proposal? And then finally, how many of those requested proposals are accepted? Okay, so that's six different conversions. We go from the website to discovery call. Understanding if that's a quality lead, turning them to a consultation, having them request a proposal and then accepting the proposal. Okay, you have, you have six opportunities to pull them along with you, before you lose them.

Hey designer, I see you, you're working hard building your interior design business, and you're doing okay, but things could be better. Am I right? Maybe you're struggling to clarify what makes you different, you know, that onus factor that sets you apart from other designers in your area. Maybe you have leads, but you're squeamish when it comes to selling and you can't seem to move them from a prospect to a happily paying client. Perhaps every project feels like you're reinventing the wheel because your design processes aren't dialed in. Maybe you're eager to take on the big projects, but you're not sure how to implement full service projects without a team. So you keep playing small. Look, I get it. Running an interior design business, especially on your own isn't for the faint of heart. But it's totally doable and the rewards creatively, personally, professionally and financially are so worth it. If you're ready for a fresh perspective on what it takes to grow without the burnout and overwhelm, I have a special invitation for you. For a limited time, you can catch my new masterclass the six part framework for a thriving interior design business, or I'm laying it all out for you, including the top three mistakes so many designers make and why they're stealing your time, your money and your joy. The secret to getting the best free marketing in your design business. And of course, I'll share my signature framework to building a profitable design business without constantly hustling for new clients. Here's the thing. When I say I don't believe in a one size fits all approach to how you run your design business. I really mean it. It doesn't matter if you want to run a business doing exclusively virtual design, or you want to build a business on a part time schedule. Or you really want to make a name for yourself working with high profile individuals with a buzzing team that supports you. Whatever your end goal may look like my friend and where it can help you look at your business with a fresh set of eyes so you can get the clarity you need to know what to focus on right now. And here's the best part. This masterclass is free. Yeah, free, head over to designers oasis.com, forward slash thrive and register now, I'll see you there.

So what can you learn when you start to track and monitor your conversion rates, it can really help you to isolate problem areas that you need to focus on or improve. Let me give you a few examples. Let's say your problem is that the phone's not ringing. Now, maybe you don't literally have a phone that rings but somebody books a phone call with you. That's the 21st century version of the phone ringing, let's say the phone is not ringing and nobody's calling you're not getting leads? Well, this is this can help you isolate one of two challenges. One, either, it means you have really low website traffic. And so that means you need to get out there and start talking about your business. Or, if your traffic is really good, then you want to look at the quality of your website, call to action, your design and your web copy, it means maybe it's not compelling enough, and that needs an overhaul. So that is one example of how well if you can isolate that you're just not getting discovery calls, you can isolate it to one of two issues, and then look into it more from there and fix that. And then keep going and see what else can happen.

So then let's say the phone, the phone starts ringing, okay, you did those things, and the phone starts ringing and you're getting leads. But the leads aren't quality, they're just not the kind of projects or people that light you up that you want to be working with. And when I say people, I don't mean, male, female, that kind of thing. I just mean, the kind of people that value, the kind of services that you provide, want to be real clear on that. So if quality of leads is a challenge, the NAT says to me, that's a web copy issue, what you're saying on your website is saying the wrong thing to the wrong people, and making them think you've got something that can help them. And so then, you know, okay, I need to overhaul my web copy, so that it's really doing a better job of attracting my ideal client, and they see themselves here, or they see themselves working with me. And then you can start to see a change in the kind of quality clients that you're getting that that's a better fit a better alignment. I'll give you one last example. Let's say all that's working for you, and you're getting all the way to the consultation with the client and you feel like it goes well. But the kind of end there, that's kind of where the end of the road stops More times than not, you've got what feels like quality leads, but then your consultation falls flat. That likely says your consultation itself needs to be improved. And I cannot under emphasize how important nailing your consultation is. There is an art and a science to it. I go into this inside one of my master classes inside the interior service business blueprint program, I outlined exactly how to structure them what to say what not to say when to say it and how to be flexible all those things, but all that to say there is an art and science to how you run a consultation so that you can really draw them in and they see you as the solution for what they're looking for. So just a couple of examples. But if you are tracking your conversion rates at each of those points, now maybe your ideal onboarding journey looks a little different. That's okay, you can always adjust it and change it. But that's a pretty typical one. And so I wanted to give that as an example. But once you see like, Oh, I'm getting traffic here, but then it's falling off there, then that says okay, this is where I need to focus my time and my energy. And this is something that you want to look at on a at least a weekly basis.

Okay, so what's the other metric that is so important for you to know in your business? This is your average project profitability. And I'm going to call it a PP for short because I don't want to have to repeat average project profitability 500 times because my mouth will fall apart. Okay. So average project profitability. That's the last thing I'm going to say or a p p tells you on average, how much money do you make on different project types? Let's get into it. So HPP looks at both services and sale of products. If that's something you do in your business, you might choose to be a virtual designer where you're not selling product or just do design only I have lots of designers that choose that path and that's totally fine. But many if not most, Have my designers that I work with are in full service, they offer full service with procurement. So we want to make sure that you're not only looking at how much money you're making off of your services, but your sales as well. And you can you can look at both. Okay, so first services time, it APA takes into account how much time you anticipated spending on a project versus how much time you billed for. Okay, so how much time you anticipated spending on a project versus how much time you actually spent on it, and how much time you built for because there is, but both of those are figured.

So for example, if you sent out a proposal, and maybe it was flat fee, but that flat fee was based on an anticipated 100 hours, but then on the back end, you did the math, because you track your time and you say well, on these types of project, we're typically spending 20 to 30% more on them than we than we anticipate, then that helps you realize, we really need to either raise our our rates, what we you know, our proposals, or we need to look at becoming more efficient in these certain areas. So that's one thing, it's looking at your services, how much time did you anticipate spending on the project? How much time did it actually take? And how much time did you actually bill your client for you for? And I'll be honest, the first couple of times you do this, it's going to be pretty shocking, you're going to see who I'm spending way more time on a project than I actually think the truth is, we have a warped sense of time, our brains are not good at keeping time, the only way to actually know how much time you're spending on a project is to actually track your time. I've talked about this at nauseam, I've got lots of podcast episodes, we'll link to a couple of them below. But I'm very, very adamant about that. And it's it's a hill I will die on you have to track your time. So it's not only looking at your services and your time, but it's also looking at how much product you sold versus how much you spent on it. That's another factor in understanding your a PP. And it also looks at your out of pocket expenses. Every project has out of pocket expenses, whether that's maybe you bought a gift for a client, a welcome gift, maybe you maybe you made a mistake on something and you had to spend time or your assistant had to spend time going back and fixing a mistake that you guys made. Obviously, you're not going to bill your client for that. But you need to be tracking that time so that it is accounted for. Okay, other expenses. If you bought something for your client that just wasn't a part of there anything that you might have paid for that your client didn't either reimburse you for pay for directly. These things happen from time to time, usually they're pretty nominal. But when you know if they add up over time, you just want to be tracking them. So there's sort of this indirect expenses.

So again, just to recap, it's taking not only your time, so how much money how much time you anticipated spending versus how much time you actually spent, and how much you build your client for looking at products, how much you spent on products versus how much you your client paid you for. And then accounting for any indirect out of pocket expenses, such as gifts, time spent fixing errors, that sort of thing. Okay, how often are you looking? Are you tracking your aipp, I tell designers that you need to every major milestone within a project, you need to be looking at how you're tracking on time. So as you're working through projects, keeping tabs on your time, so major milestones, and some examples of that would be after you deliver the concept design package. After you deliver the design presentation, and a couple of Midway checkpoints through your implementation, if you're doing full service with procurement, that sort of thing, you'd want to check in on that as well. Again, I go full, it fully in depth into the project, process and timeline and that kind of thing inside inside our master classes inside the interior designers business blueprint. So if some of those words are feeling a little bit there, there's their industry standard terms, but if they're feeling vague to you or are or not familiar terms, come join us in the interior designers business blueprint. I'll lay it all out for you. But thinking about what milestones are important and when to look at this major milestones couple of times during implementation at least once a month if it's an ongoing project, but then at the end of a project, you want to do a full blown audit, where you're looking at okay, we're all done. All in how much time do we spend on this project? How much time do we anticipate spending on it and what's the difference? Okay, think about How you might operate differently if you had this kind of Intel in your business.

Here are examples of some insights that you might gain. If you knew your a PP, if you knew your average project profitability. See, I lied, y'all because earlier I said I wasn't gonna say that whole thing again, but I just did. So your a PP? What kind of insights can you gain when you know you're a PP? First of all, you can know what kinds of projects are working for you. So maybe you're still toying with? Do I want to do design only? Or do I really want to go whole hog and do full service with procurement, right? Because, you know, it takes the most work, but it has the most payoff financially, you can start to explore how well are those existing projects paying off for you? So yeah, you've got to have a few projects under your belt here to be able to do this, that is a for sure thing, that you can always you can aim to improve that every single time. Maybe you are taking Kitchen and Bath projects, but you're also taking another maybe full service with procurement projects. And you want to kind of compare how do you how does it shake out financially for you to do one or the other. And maybe you uncover Wow, I'm really doing I really do well, with Kitchen and Bath projects, I want to focus on that. Or maybe it's the other way around for you. I'm not making any assumptions here about one type of service being better than the other. Only, you can figure that out through doing some of this data mining that I'm talking about. Another example of insights you can gain, when you have this information, you can you can under start to understand what areas of work you are really good at versus what needs to improve. So for example, when you're tracking your time, and you're looking at the kinds of tasks that you're doing throughout a project, you might start to uncover while we're really good at drawings, like we can crank out drawings like nobody's business in and that that was us for a long time. But sourcing is where we really got to fall off the wagon where we find ourselves going down rabbit holes, we spend so much time on sourcing. But we're but we're coming in under time when it comes to drawing so you can start to see, okay, one of two things needs to happen. One, either, we need to estimate for more time, we need to give ourselves more time to do sourcing, because that's just what it takes. Or we need to say to ourselves, we have to find some ways to get more efficient at sourcing, whatever way that might be for you. So those are some insights that you can gain when you have your a PP. As a number you can look at bottom line is folks numbers tell stories, this doesn't mean you have to have your nose in the numbers all day long every day your your product profitability, that's usually that's, you know, couple of couple of numbers during a project and is assuming you're keeping track of these numbers during the project. At the end, you're doing an audit, you're looking at your conversion rates once a week. You know, this is this is easy stuff is but you have to make it a routine, you have to make it important part of your business routine in order for it to work. And once you do and you can start to tweak things in your business, you'll be amazed at how far you could go.

So I know that I've told you today what numbers are important and what kind of information it captures and what you can learn from it. And honestly, if you want it, you could go back and re listen to this episode and use this information to create your own spreadsheet. And if that's something you want to do godspeed you, you you should have most of the information to be able to do that. That was the goal. But I want to let you know that inside my program, the interior designers business blueprint, these two essential business tools are fully developed and ready for you as part of your program. These are plug and play templates with tutorials showing you exactly how to use them. Okay, so if you want to learn more about that, head over to designersoasis.com/blueprint where you can learn more. But I hope that today the takeaway is that you have clarity on what numbers are truly important. And understand that numbers tell stories. And that numbers in isolation are not useful. They're not that useful. They need to be viewed in context they need to be viewed from a bigger lens of well what does this all mean? So I hope that this is helpful and that you are feeling a lot more clarity around what numbers to be focusing on. Okay, so that's it don't forget we'll be starting our dear at Kate segment soon. So if you have an interior design business question you want me and a guest to answer head over to designersoasis.com/askkate I look forward to hearing from you. Bye for now. Hey, friend, thank you so much for letting me spend a part of this day with you. I'm so passionate about helping designers like you. And I believe in a rising tide that when one of us does well, we all do better. So if you share this attitude of abundance with me, I want you to do just one little thing. Please share this episode with someone using might love it. And if you're feeling extra generous today, go ahead and take just 30 seconds to open your podcast app and leave us a five-star rating and review. It's free for you to do and it helps me to be able to keep making more episodes and resources for you. However you choose to help please No, I appreciate you so very much. Thank you, my friend. Have a wonderful rest of your day. I'll see you soon.