EP #62 | 3 Commitments You Need to Make to Build A Profitable Interior Design Business
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.
Katie Gutierrez
Okay, you and I are going to have a deep enriching, amazing, valuable conversation as it relates to three commitments you need to make for building a profitable interior design business. What I love about this conversation that we're going to have is it, it brings up in me a memory of, of when I first started out, I'm talking like very early year one when I was like, on my own. I remember that my husband and I, my husband, by the way, if you don't know is my business partner. And so he and I were invited for by some friends to a Mexican restaurant. And what we all know of Mexican restaurants is generally there on the like, less expensive side of restaurant experiences, right? You generally get like a $4 burrito kind of a thing, you know. And we were invited out to a Mexican restaurant with a bunch of our friends, everybody was going and we were not sure we would be able to afford it. We literally were like, I think we maybe should not go out to this Mexican restaurant with our friends. And what in that moment, I remember feeling is this like, I'm gonna call it depression. There was like this depression moment of like, Wow, I can't even enjoy friendships because of money. And oh my gosh. And you know what, there's a room. Remember, also, when we were at that Mexican restaurant, the restaurant messed up my food or whatever, the manager came out and apologized. It's everybody had their food except me. And the manager came out and apologized. And he's like, You know what, don't worry, we're going to comp your lunch. And the comping of that lunch on that day when I was going through so much of this, like, oh my gosh, I don't even know if I can afford this. And, you know, was such an eye opening experience for me. And it really made me feel like I gotta figure this shit out. Is it okay if I say shit Smile, smile Summit? I can say it is if you're with
Kate Bendewald
me. Any of my members who I've seen a few of them chatting in here, they they know.
Katie Gutierrez
Yeah, so I was like, I gotta figure this shit out. And you know what? I figured it out. And it is figure out double. And Kate, what I love about you. And by the way, I know you have raving fans here in the audience with us. And if you don't know, Kate, I will be surprised. And if you don't know Kate, though, you should hand and Kate has. I'm trying to say I brought her in because she's an expert in profitability. She's an expert in it. She's built for herself to two, six figure businesses in different parts of the country. So she really knows profitability. So I hand selected her all say to be the person who talks about and teaches us profitability. In this in this in this summit, she's an interior designer herself, turned business mentor for designers at her company. She calls designers Oasis and I know because she's told me that she calls it Oasis because she knows that sometimes Being in business can feel like you're in a desert with nothing, no resources, no people know nothing. And it's hot and your skin is crusty and burned by the sun. And then there's this oasis in the middle of the desert with palm trees in the spring of water and ice cold glass of tea. And that's the image that she knows she wants you to have as it relates to being in business and her designers oasis. Yeah, because after a successful career, as a full service interior designer, she has transitioned her focus to helping other designers build authentic, sustainable and why she's here, profitable businesses, excuse me, that in particular, also support their lifestyle goals. And those two things are so important to have. Together, she adheres to the philosophy that there is no one size fits all approach. There isn't one she doesn't believe this. And that's why I have her because I don't believe that either. To how you run your business, right? So you got to get clear, you got to get clear on the outcomes you do want. From there, she helps you build a customized business plan inside her program called the designers that sorry, the interior designers business blueprint, like that cute play on words. Yeah, and like I said, she's coming at this from having created to repeat myself to six figure businesses. One Colorado, one in Texas as a full service, interior designer. I mean, I feel like I could say 100 million things about you, Kate, I'm a fan of yours myself. I think that you're an incredible human being from business to you know, coaching and life and all the things and there's one particular thing about you that I find very fascinating. Do you want to tell everybody what that is?
Kate Bendewald
Oh, the little the little fun fact.
Katie Gutierrez
Just that little tiny little deal. Fun fact.
Kate Bendewald
I used to do trapeze. I mind every time I have to find this video of me almost having a head to head crash with my instructor. It was epic. I won't show any of the good stuff. Just that one because it's it's funny now. But anyway,
Katie Gutierrez
it probably wasn't funny then though, right? I love that I every time I hear you say that I am equally as blown away. Like here's this like professional six figure two time, you know. And then in trapeze. Like what a little bit about you. Alright, Kate, let's go ahead and dive in. Because we have a good amount of time. And I want to make sure that we really get all the juice that we can squeeze out of this. Um, so can you let's start like back up a second. First of all, you have you built two, six figure interior design firms in different parts of the country to have them to six figures.
Kate Bendewald
Yes. It wasn't easy. It wasn't easy. I'm not gonna say that.
Katie Gutierrez
I'm sure not. And I think it would be amazing if we had like a little backstory to that like, first of all, why to why'd you close? Why'd you open hon. But no, no, no. Please tell us go.
Kate Bendewald
Yep, I'll give it to you. First of all, thank you so much for having me. And I had no idea I've got I'm, I'm I'm seeing a bunch of friends in the chat. Hi, everybody. So a lot of names that I know and people that I've worked with. And so it feels feels good to be hanging out with some friends today. And your story about going out to eat at the Mexican food restaurant. We've all been there. And thank you for sharing that. Because I think we just need to normalize it. We've we've all been there. And so you know, and I've been there too. So I will
Katie Gutierrez
say that I do operate it $2 million now. So just to be clear, it is figured out double.
Kate Bendewald
Totally, totally look at you now. I love that. I love that. Yeah, so I'm gonna back up to 2013 I had been working at a corporate architecture firm here in Denver. And I left to start my own residential Interior Design Studio. This is the very abbreviated version. One might say right out of the gate, I had success as you if if you only define success as the ability to make money. The problem was I gained so many projects so quickly. And I said yes to everything that came my way that I hadn't made time to create really sustainable systems in my business. And the result was I was overworked. I was overwhelmed. I was overworked. I was underpaid. And honestly, I didn't have a whole lot to show for it when you looked at the bottom line. And so fast forward. Bout 2017 Just before my husband came to me and said he had a really cool job opportunity in Texas. And I had family back in Texas. That's where I gone to design school. And so I said well, let's just give it a shot and secretly on the inside. I was like this is the golden ticket to get out from underneath this hot mess. And so reluctant Only I said yes. And we moved. And I had some time have a little bit of a break to refigure things out, I had worked for a high end residential designer before I'd worked for a big architecture firm. So I had both sort of the spectrum of experiences there. But what I didn't have was that business background. And that's what I really needed to figure out. I was really good at creating systems, but I needed to at the time, and so I spent a good amount of time, you know, a number of months, just really kind of reorganizing everything from the inside out. And I am so grateful for that opportunity that I had. And I realized, not everybody here could just stop what they're doing and go start over from scratch. And you don't have to, I want to be clear about that. But a couple of months in I said, you know, the money was running out and I was like, Okay, it's time to start getting out there again, and start showing up and finding clients. And I cannot describe to you the difference in doing business in this new way was motivating. It felt I felt like I had my creativity back. I was attracting really cool clients, people that I consider friends to this day, I had some really fun projects, big projects, I really wanted to meet these projects that I can really sink my teeth in. And so it was working, what I had done had worked. And within that first year of business, I was already at six figures it was and it was this moment where I was like, the end of the year, I was a little bit tired, because we had been working our tails off, but it was it was a good kind of tired, you know, and you know, looked at the the history of the year and I was like, I cannot believe this just happened. It just sort of happened. background. So I'm much better at keeping tabs on where things are today. But anyway, this was my first sort of foray into this new way of operating and being really specific about you know, who I wanted to work with what kinds of projects I wanted rebranding, restructuring from the inside out. And, and I did this in a town where I knew no one, I'd had no connections. I you know, the word of mouth referrals is what got me far here in Denver, that immediate success, you know, the first go round, but I had to do this without knowing anybody. So I was really proud of myself to be honest. And, and I thought, you know, I can do this. So anyway, fast forward. And two years in, we decided we were ready to move back to Denver, we missed our friends, we missed the mountains, we missed the cool nights, and move back. And I did not advertise my business, I did not tell people that I was looking for client work because I was already focusing on designers Oasis was starting to like become a thing. And lo and behold, I started getting phone calls from friends and past clients. And the thing took off again, and we worked our little patooties off, but we we just were getting ready to photograph three really exciting projects. And it's just been fun, you know, to be able to like, kind of feel like you know what you're doing. And it doesn't all feel like you're starting from scratch. And so my point in sharing all of this was you can do this, and you don't have to move across country and start from scratch. And in today, you know, I share the systems, I share the mindset shifts that can help you go from feeling overwhelmed, which is very unsustainable to having a thriving business, one that supports you financially and satisfies you creatively, creatively. And I want to really emphasize that piece. Because if your only metric is making money, anybody can make money. But I want you to think about all the metrics of what a success look like for you. Feeling like I can express myself creatively is a metric for me of success. Ease is a metric of success. So that's my backstory. And that's what I'm doing now. And it's so much fun.
Katie Gutierrez
I think we need a pom pom moment to celebrate all of your success.
Kate Bendewald
Ah, oh my gosh, you're so cute. I love that. Okay,
Katie Gutierrez
go okay. Um, yeah, and I love what you're modeling for us here, which is what I'm seeing and guys post in the chat. If you're feeling something that I'm missing, I'm noticing your modeling perseverance. I'm noticing your modeling belief in yourself. I don't know the word for this is like not giving up notice. Yeah, right. Like leaning into expertise SNESs leaning into I can do this leaning into what's the balance leaning into whole person this as the way that you approach your work. Like it's not enough that it's just money. It's not enough that it's just creativity. It's not enough that it's like work but it's got to be work life balance. It's got to be money plus creativity and leaning into all of that at the same time. It's a beautiful Okay, dusty resilience. Yes, yeah, dutiful. And Shawn saying it's great to hear that all three are possible. They absolutely are. They absolutely are. So I'm so Kate In I
Kate Bendewald
want to I want to just, I just thought of one quick comment to tap into that Hellas when I didn't come up with this and I wish I could remember off the top of my head who said this, but it resonated so much with me. I've got a sticky note on my board, just be on my monitor. Confidence doesn't come first. What comes first is commitment. Commitment first, and then competence. And then the confidence comes so confidence doesn't come overnight. You just gotta push through those uncomfortable feelings. Push through the mistakes. Try stuff, throw stuff at the wall, see what works and keep moving. Keep moving.
Katie Gutierrez
Yes, yes. It's like fear, but do it anyway. Yeah. Oh, my gosh, I love this so much. Okay. Okay. So today we are wisdom dumping. Okay, like, Okay, you and I have had prior conversations to today. And we made a commitment to like wisdom, jump, and vulnerability, like, in for our people here today. And so I know that the people that are in here right now are like, I want to be profitable. Yeah. So we're going to focus on profitability today. Um, Sean says, Great quote, yeah. And you show yeah, you have to have a growth mindset. That's absolutely right. The thing that calls you forward, I love this. Look at all this like bundle of wisdom we have.
Kate Bendewald
Well, I know Nisha, personally, and she definitely has a growth mindset.
Katie Gutierrez
Sure, I'm sure. Um, yeah, Katie is saying have stronger courage than fear has been been my mindset. Yeah. And if I'm scared, push on and refuse to quit. My bad. Wow, we are some empowered people here. This. I love this. All right. So Kate. So today we're talking about like profitability. And I know that in the past, first of all, I think we got to get over this thing that people might be feeling that's like profitability means I gotta be about numbers. I'm not a numbers, person spending time. hunched over numbers, like takes away my creativity. I hate it. It's draining, but gross. I avoided a hate numbers altogether. So one, is it possible to be profitable and not do numbers at all? One is that is that possible? And to what would you say? What would you say to that event?
Kate Bendewald
Yeah, no, I'm afraid not. You can't escape numbers. But you don't need to be a mathematician. Does that help?
Katie Gutierrez
Yeah, I think it's like, it's like kind of like fifth grade math. We need like about fifth grade math.
Kate Bendewald
Okay, got it. Well, it might even be less than that. But well, I have a fifth grader. And I've seen the math that she's bringing home and I'm like, Oh, they made a game show about this called Are You Smarter Than a fifth grader? Okay. Yeah. Okay. So here's, here's my feeling about that. By the way, Kelly's comment, commitment, first, competence, and then confidence. Yeah, I hope that helps. Cool. Here's the reality when you're not profitable, you are likely feeling some of the things I mentioned earlier, overworked, because you're trying to do it all yourself. Overwhelmed, because you're scrambling for clients. undervaluing your time under estimating your time. It feels hard to take risks when you're in that place. And you feel like you can't hire help. You feel like you can't invest in yourself and your business or your staff or your clients. Guess what? There's no room to play, when that's what's going on. And that obliterates creativity. So
Katie Gutierrez
hold on, hold on, hold on, let that sink in for a second. Because that's big. That's big. You may be thinking that dealing with money like sucks your creativity, but actually having no money is the bigger sucker of creativity. And that is so huge, so huge. All right. Let me know in the chat, like, did that hit you in the stomach? About like, Sucker Punch? Let me know in the chat. You're like, Yeah, I'm a sucker punch. Yeah. Tamizh like yes, yeah. clean canvas. Yeah. Yeah. Virginia shot Yeah. Everybody's like, yeah.
Kate Bendewald
Oh,
Katie Gutierrez
yeah. Yeah, no, yeah. Reubens Oh, yeah, yeah. Okay. That's,
Kate Bendewald
we want room to play, right? The truth is, in order to have a financially sound business, you need to get comfortable with numbers. But again, by no means does this mean you need to be a mathematician, we're talking about some simple basic business math. First, you need a bookkeeper. That is the absolute first person I would hire in business. Ideally, someone who understands the design industry. And that doesn't mean that because they're doing the books for you and reconciling everything that you're hands off, and you just get the reports and call it a day. Let them do that. And then we're going to talk about, we're going to look at some numbers and be able to kind of figure out what to make of it. So I say ideally, you need to have a bookkeeper. Because that's just the first step and I'm surprised I've met some designers who are really far along into their business before they hire that out and so on. As soon as you feel ready, financially get that person on the books, okay? But I want to be clear, here's what I'm not talking about. I'm not talking about crunching numbers all day. And I'm not talking, I'm not saying that in order to be profitable. You it has to do with the volume of projects, you can have one project and be profitable. And you can have 20 projects and be in the red. So what I am talking about is I'm talking about understanding the ecosystem of your business and your projects. And so I want to share today I want to talk to you guys about the ecosystems and then I want to share those three commitments because you got to kind of understand the ecosystems in order for those three commitments to really sink in.
Katie Gutierrez
Love it, I was just about to interrupt you and be like, I'm sorry, can you hold on one second? We need some explanation around the ecosystem business. What are what are ecosystems of a business? Yeah,
Kate Bendewald
I think I have the story that I think can help you sort of visualize this, but I was on a walk with my kiddo in an open space Park, and we came across this pond, and next to the pond, they had roped it off. And there was a sign that said meadow restoration in progress. And they roped it off, because too many people had walked in that area. And so they needed to rope it off. Because that area needed to restore itself, it needed to repair itself. You can think of your business as an ecosystem, your clients, your projects, your website, your marketing strategies, your systems, your tools, technology, your staff, all of this makes up your ecosystem. And just like in nature, when one of those systems is sick, or unhealthy, or dysfunctional or isn't nurtured isn't given attention, it can impact the rest of the system as a whole. And so I want, I wanted you to think of that visual because just like that meadow and that open space park where we weren't needed time to restore, you may need to take some time in your business to restore areas that are sick or unhealthy or out of balance so that the whole system, the whole business has a chance to thrive. And so what I'm going to teach you today will hopefully help you have a better pulse on the different systems in your business so that you can start to diagnose and repair what isn't working. And it really starts with the three commandments that we're going to talk about today. So does that sort of help? Lay the groundwork?
Katie Gutierrez
Totally. Yeah. And let us know in the chat. Did that help? Give us a yes or no? Okay. And he was like, yes, Virginia's Yes. Okay. Coleen. Okay. Yes, yes, yes, yes, yes, yes. Okay, we're going to yesterday.
Kate Bendewald
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Kate Bendewald
Alright, so we're gonna start talking about the three commandments. I'm going to share the three And then we'll dive into each one in a little bit more detail. So before, actually, before I show the three commitments, I want you guys to remember, as you're listening to this today, there's so much power in making in the act of making a commitment. You don't have to have it all figured out today, or by the end of this week, or the end of the Senate, or this month, or heck, even this year. But if you can just say to yourself, I am committed to this because I know it's on the other side, I will start to feel more confident, competent and confident, and have room to play room to let my creativity really blossom. So today, we're just talking about the act of making a commitment, even though you don't have it all figured out yet. Okay. So keep that in mind. So three things, one is making a commitment deciding that you are going to run your business like a CEO. Okay. And this really starts with your mindset shifts. Number two, knowing what metrics to track, beyond your p&l and your balance sheet, and making a commitment to start to track them. And number three is committing to building better habits in your business. So those are the three commitments and whenever you're ready, we can we can dive right into them.
Katie Gutierrez
All right. Are we ever ready? Let me know when are you ready? Right. Ready in the chat room ready? Okay. Yeah. Okay, Sandy, ready? Okay, Virginia. Okay, yeah, we're ready. Okay,
Kate Bendewald
so deciding to run your business, what does it look like? When you're running a business like a CEO. The goal of a CEO and a business is to be thinking about the long term strategy of your business, the long term goals of your business. And so often we get stuck working in the business. The client work really specifically. And it's fun, right? Because that's what we ultimately why we started this work, why we want to be doing this work, it's creative, it's fulfilling, it lights you up. But if you never make time to work on the business, and knowing what to work on, then you'll continue to stay in a feast or famine cycle. If you guys have ever experienced the feast or famine cycle, say yes, or give me a thumbs up, I know I have where it's like, you're busy doing the things and working for the clients. And all of a sudden, you're like, Oh, crap, we're wrapping up, and they don't know where my next clients gonna come from. So it's about consistently maintaining that pipeline and having having your next clients geared up and ready to go. So we want to try to get out of that feast or famine cycle. So what does it look like to start to run your business?
Katie Gutierrez
I would like to point out, look at how many yeses in the chat. Yeah. Like, this is a real thing. This is a real surging problem. And if you're feeling this way, I want you to also notice like you're like, definitely not alone. Yeah, yeah. Nothing. I'm currently cooking dinner to prepare for the feast. Yeah,
Kate Bendewald
yeah. I love that. Yeah, look, I have a design degree. They don't, I had one business class in school, they don't teach this stuff to you. And so it's stuff that, you know, you guys are all here because you're committed to working on your business. So you're, you're already there. So what does it look like to start to run your business like a CEO, number one, it's managing your time. Building in time to work on your business, and building in time for play creativity, rest, rejuvenation, continuing education. And I like to use the 8020 rule where you know, no matter whether you're working part time, or whether you can have 20 hours a week to commit to your business, or 40 hours, whatever it is, try to keep the 8020 rule and in mind 80% of the time is doing the work that gets you paid, and 20% of the time running the business, working on the business, improving your systems, finding your next clients, that kind of thing. Also, not leaving money on the table. We leave so much money on the table. It's ridiculous and I know because I've done all the things I'm about to share with you these examples.
Katie Gutierrez
Hey, I would like to just back up real quick second, I think yes. times people think like oh, let me only nurture the pipeline when I'm in famine. Mm hmm. And I think that that that curates in somebody this like needy kind of energy out there in the world. It's like this needy like, oh, quick, I need a project I'm gonna gotta and that needy energy doesn't create this empowering leader in sales. And so the key is to consistently generation over time, even when you're quote unquote busy.
Kate Bendewald
Yeah, absolutely. 100% And so, you know, that's a lot of what that's one thing we've been talking about a lot inside my program currently this is a real active conversation is what are marketing strategies that are are are working now and work for your personality type. And and those those conversations, but it's consistency is the consistency and the long game are really the two names of the game there.
Katie Gutierrez
It really is. And also, by the way, our next session with Ken Lewis, who is an expert at marketing strategy is going to be talking about marketing strategies to attract your ideal clients. So if you're interested in attracting your ideal client, definitely stay for the next session.
Kate Bendewald
Stick around. That sounds like a good one. I love that. So not leaving money on the table? Yes, examples are charging, not charging clients for change orders, not charging clients for additional services that pop up, not a real quick example. Your client, you're in the middle of a project, and they come to you and they say, Hey, I'm just wondering, I would I think we need a roman shade in this office, not in the scope of work. And you say, yeah, let me send you some some samples sounds like a quick thing, right? You're not taking into consideration the snowball effect of what goes into getting a Roman a custom window, treatment, selected, ordered, purchased, made installed and all of that. And if you don't take care of it right, then in there, you're gonna find yourself go, you know, but these are things that happen all the time. And I've definitely been guilty of doing these things. And you find yourself in like, Oh, my God, I just spent like 10 hours on this thing. And it didn't charge my client for, you know, so I'm billing for all of your time, how many of you have ever scraped off a few hours off of your invoices when you send them to clients, because you're worried about how it's gonna be? Perceived, perceived, thank you.
Katie Gutierrez
Elizabeth is saying, I do this all the time, Elizabeth craft, and I do this all the time. Yeah.
Kate Bendewald
upselling, to clients, sending timely invoices, these are all things that we do that are opportunities that we have to be keeping a pulse on, and stop leaving money on the table. And then the last one that comes to mind is having a clear marketing plan, and follow up the plan. And I know you guys are about to learn a whole lot more about that with your next guest. But this is a really important one is to have a marketing plan. And a follow up plan. And my 62nd Spiel spiel on this is pick marketing strategies that are in alignment with your personality and what feels like a good fit. Pick one to two, maybe what I always say is one in person, one online strategies that feel good double down on those maybe three strategies. You don't need to try to do at all two to three strategies, double down on them and do it consistently for 90 days and see what happens. That's my 60 seconds feel.
Katie Gutierrez
So yeah, you're like and see what happens. But what you really mean to say is like and watch this.
Kate Bendewald
Yeah, exactly, exactly. So yeah, so that that is a summary of what what life starts to look like when you start to run your business, like a CEO, you're managing your time, while you're not leaving money on the table, and you have a clear marketing strategy, and you're you're being consistent with him. Oh, that's a lot. We're just getting started. Alright. Number two, is we're gonna talk about metrics, knowing what metrics to track, you may know these as key performance indicators or KPIs as as they're often called. So your balance sheet and your p&l are reports that your bookkeeper will provide you or you can run through your own software, but
Katie Gutierrez
they're, they're useful. PNL is profit and loss just in case?
Kate Bendewald
Yes, yes, those are helpful for you to understand your business's overall financial health, but they don't often give the full picture of the health of your business and seeing some of those nuances. So there are two other key performance indicators that are often overlooked by designers, and I'm going to share those with you. And I'm gonna give you kind of a broad overview of how you might start to track these in your business number one, conversion rates. And number two, your average project profitability. Okay, so let's start with conversion rates. How good are you at moving clients to the next stage with you? If you were to start tracking this information on a consistent basis, you can start to see where breakdowns are happening in your business. And then you can diagnose and treat it. But if you're not tracking this information, you will have a very hard time to understand where things are falling off course. So let me give you an example. I'm going to I'm going to share with you guys a typical sales funnel for designer client relationships. So we start with the website, right you have website visitors, those typically fuel a discovery call. So how many of your website visitors are converting to booking a call with you, or downloading a lead magnet if that's something that you have, of those discovery calls, what percentage of them are qualified? Add clients because that's a really important thing to consider is the quality, not just quantity of, of discovery calls of those qualified clients? How many of them at the end of a discovery call are saying, Yes, I want to do a consultation with you to start, kickstart this relationship off. Okay, so you book a consultation, at the consultation? How many of those at the end of your consultation, you've got clients saying, this has been lovely? I would love to continue this partnership. Can you provide me with a proposal? So a request for proposal has been asked for? And then the proposal has once it's delivered, how many of them accept your proposals and become a full fledged client? Right. So that's a pretty typical workflow. So if you start to see that your that your conversion rates are, for example, ending after the consultation, and clients are not wanting to move ahead with you, then you can start to look at things more closely. Like, am I delivering a high quality high value consultation experience? And if not, how can I improve that? Or are you attracting the kind of the right kinds of clients that are actually wanting to go that full distance with you, somebody that's going to hire you to take the reins and move a project forward. So there's a couple of things that you could start to look at. But when you start to track those conversion rates, then it's much easier to see where things are kind of breaking down. Okay. Does that make sense?
Katie Gutierrez
Yeah, let us know in the chat. If that, if that makes sense to you? Yeah. Yes. Okay, we're getting
Kate Bendewald
great. Yeah. So
Katie Gutierrez
is there a when he says totally makes sense? Okay. Um, is there a percentage number that you think
Kate Bendewald
there is, and I should have pulled that number, because I've got it in a spreadsheet, but it kind of depends on the conversion point. So I think start to look at your own baseline. You know, for me, this is, for me, a 50% conversion rate is a good place to start from getting them from discovery call to client. But when you're more experienced, and you've been doing this a little while, you you want to see that number be more like 80 to 90%. So I say give grace to folks who are just getting started. But you know, if it's below 50%, there's some work to be done. Don't Don't fuss over it, just know that this is an opportunity. And it's all fixable. So 50% is a great starting place. And as you get more experience that'll start to get honed and refined and better and better. And every discovery call is a qualified client that is eager to work with you. So I think it depends on experience.
Katie Gutierrez
Yeah, I love that. And something that I teach in my coaching program, too, is that once we're getting closer to 90%, it's probably an indicator of time to raise prices.
Kate Bendewald
100% Yes, yes. Okay, so that that's conversion rates, that's a high overview of tracking some key indicators. And the other one is looking at your average project profitability. So your p&l on your balance sheet, they're gonna give you overall profitability of your whole project. But I think it's important that you key in on specific data for each project, you need to understand how profitable every project is, this requires that you not only audit your projects, but that you keep tabs on them while you're working on them. So to start, I always suggest going back and auditing a few of your most recent projects, and that's going to help give you a baseline. When you're doing this, you're gonna want to look at three key metrics of each project. Number one is sales. So sales of product number two services, which is your time spent on a project, compared to how much time you estimated for, and then sundries and I'll get into those here in a second. But real quick, so services, this comes down to tracking your time, you must track your time, even if you charge flat fee on your clients, I will say this till I'm blue in the face, I'm going to give some little tough love here. If you aren't chucking time on your projects, you're not serious about your business period, and I will die on this hill. I know that a lot. There are some designers who just don't think they need to do that. And I really believe that you do and it doesn't have to be hard. That's that's the thing, and I'm gonna send you some stuff that's gonna help you do this really easily. But ultimately, you provided your clients with a proposal for services and it was likely based on a number of hours that you estimated a project's profitability can tank if you exceed that number by a lot. And I know going down rabbit holes when you're sourcing is a thing. It's a thing. It's a thing. So you see, this is the best little investment is the Time Timer. It's the visual timer that helps you see Are you on track and I need this because I'm add. Okay, so staying on track. And you really just need to know, appear to what you estimate how much you actually spent on your projects. And then the last one, sorry, no. And then there's products. So products is if you are selling products to your clients, you need to look at the relationship between your sales, what you charged your client and the cost of goods sold, what you purchased them for pretty, pretty basic math, my timer going off. So then the other little nuance thing I want you to think about is we often think of our costs is only our net price on products. But where do you track additional cost that affects your bottom line, for example, our last install, one of the team members accidentally dropped a lamp as they were bringing it inside and we had to pay to replace it, these things happen, it's okay, it's fine,
Katie Gutierrez
I had to replace the $5,000 TV.
Kate Bendewald
Fun stuff totally happens. This is why profitability is so important. Because if you don't have baked in margins, then when these things happen, it's a bigger deal than it really needs to be. And so
Katie Gutierrez
and also even be devastating financially in some cases.
Kate Bendewald
Exactly. And you don't want that kind of pressure on yourself in a business. So you know, you also just want to make sure that you track those things, you know, you can't build it to the client, you just got to pay for it to keeping track of that kind of numbers are important. And then sundries injuries are things like they're not reimbursable to the client, things like client gifts, photography, we spend a lot of money on flowers and fresh fruit. So anytime we do a photo shoot, so we just put that into the project's overall budget, you know, and and then that's how we come to calculate that. So it's not just looking at, you know, the, the top dollar and the bottom dollar. That's simple enough math. But if you really are tracking a few of these things, you can get hone in and get a little bit better picture of, you know, these types of projects are serving us way better than these types of projects. Maybe we want to want to stop doing these kinds of projects. So you'll only know that when you start to sort of Kia hone in on some of this, this data.
Katie Gutierrez
Yeah, something that that was a huge wake up call for us when we were first starting out is how much profit we can make on selling furniture. We originally were thinking, Oh, it's all about fees. And now about 50% of our income comes from fees and 50% of our income comes from furniture sales. Last year, it was almost to the dollar at 50. Wow.
Kate Bendewald
Wow. Wow. That's incredible. Yeah. And
Katie Gutierrez
so having awareness on that gives you room to be able to navigate and move and move towards higher profits. And it can't happen unless you have the metrics that you're talking about.
Kate Bendewald
Absolutely. 100%. And, and I love furniture. So it's fun to self funded, source funded, funded and see it all work together. So it's a really big opportunity. If if, and there's a lot of designers are like, I just don't want to have to deal with purchasing and ordering and all of that and, and that's fine. But know that there's there's options out there to help streamline that process. But that's for another day, we're gonna get into the last commitment, which is about building better habits. Shall we do that?
Katie Gutierrez
We will do that. And then we will go into q&a.
Kate Bendewald
Okay, sounds good, quick sip of coffee.
Katie Gutierrez
We've already got some great cues coming into the q&a chat right now. Oh,
Kate Bendewald
yeah, you guys are so fun. I love this. Okay, so creating better habits. First of all, you have to believe that you can build better habits. If you find yourself saying things like, I can't check my time. It's too tedious, or I always forget or, you know, that inner monologue is going to set the tone, and it's going to call the shots. So you have to be willing to change your mindset if you want real and lasting results. So there is no one better to talk about how to building better than James clear, he is the habit building Guru, I highly recommend his book. And one of my favorite quotes that he says is every action you take is a vote for the person you wish to become.
Katie Gutierrez
Wait, wait, wait. You gotta you gotta give a minute for that wisdom. A little slower.
Kate Bendewald
All right, every action you take is a vote for the person you wish to become.
Katie Gutierrez
That's a writer diner guys. If you know on your computer right now, consider doing that. Yeah,
Kate Bendewald
great book. Highly recommend it. I've got it on Audible. I've listened to it twice. Okay. But in his book, one of the things he talks about, he just asked me for the name of the book, if somebody can Google that and put it in the chat because I'm like, it's something very simple, like how to build better atomic habits. Yes, thank you, Aaron. Oh, it's your Oh, I love you guys. Thank you a lot.
Katie Gutierrez
A lot of people have heard about atomic habits. Yeah, it's a great book.
Kate Bendewald
So I'm going to share with you what he says, are the Four Laws of behavior change. And then we're going to, I'm going to go through a quick example of each. So he says there's four laws of behavior change that are simple set of rules that you can use to build better habits. And here they are, number one, make it obvious. Number two, make it attractive. Number three, make it easy. And number four, make it satisfying. Okay, so let me go into an example. We've been talking about time tracking today, and you know how I feel about it. So I want to any, I'm gonna keep going with that example. So, personally, I love and use the software harvest for time tracking. Because it has the most, it's the most robust and most flexible. So whether you're charging hourly or flat fee, or my preferred method, which is a hybrid billing, I like Harvest, because it helps you accurately track your data. And I have a free gift that you guys are gonna get today. And inside, I include a tutorial on how to use harvest, if you want to try it out. I know a lot of the project management software systems out there have a time tracking feature. If that's what you want to use, great. As long as you're tracking something my prefer, I like Harvest, because it gives you more of that granular information that can help you understand your time in a more holistic way. So that's my plug, I'm not going to dog anybody else's tools, there's just saying what I like to use, okay. So make it obvious.
Katie Gutierrez
There's a link for it get harvest. Yep.
Kate Bendewald
So, um, make it obvious. So for example, I'm a Chrome user. And I'm sure you've used other browsers, you can probably do this. But in Chrome, you can set it up so that you have default website tabs that open every single time you launch a browser, I have mine set up to open harvest, my email and my calendar. So it's always there. It's the very first thing I see every single day. So as soon as I'm sitting down to start working on client stuff I put in, who am I working for? And what am I doing? So that is one simple way just to make it obvious. make it attractive. Not a lot here. But I say put, you can put, you can put your brand colors in your logo on it. I like things that are branded. So just do that. And it looks good. I know you guys are all people that like things to look good, right? Okay, make it easy. So harvest specifically also has a desktop app and a phone app. And I really love those for two reasons. One on the desktop app, there's a little icon that will appear at the top of your menu bar. So it's easy to pop it open and put in your information there. Or you can put it in a browser. But here's the best part. If I get up and I go for a walk with my dogs, and I come back and I forgot to start my timer. As soon as my mouse moves, it says, hey, you've been idle for the last 15 minutes. How do you want to treat this time? It doesn't know I went for a walk with my dogs. Maybe I was over here at my table looking at samples and pulling stuff together for the client. And I want to keep that. So it'll remind you, hey, you left a timer going? How do you want to treat that time. So that's one of those make it easy things that I like about that. And then with the phone app, same thing, you know, I've run to a project site or even going to the showrooms for a client, I can just plop in my my hours, and my mileage to if I want on the phone app. So that's a make it easy. That's the make it easy piece and then make it satisfying. I'm a little bit of a nerd. So I personally like looking at my time trackers. There's a dashboard when you open it up. So you can see how all of your projects are tracking for time and like a quick snapshot. And that's satisfying, you know, or if I see like who we are 80% through our hours, but we still have we're still two weeks away from presenting to this client, we need to really double down, get efficient, make some decisions and start to move on. So for me, that's very satisfying. Maybe for you, it's like hey, I'm gonna commit to tracking my time for one week. diligent, be diligent about it. And if I do a good job on Monday, I'm gonna go get myself a Starbucks, you know, whatever it might be for you. Those are just some examples, but I love James clear for four rules, which again, are make it obvious, make it attractive, make it easy, and make it satisfying. So one
Katie Gutierrez
thing I do to make it satisfying when I'm sitting at my desk is i i have i write down tasks on these little like post it notes that look like this. Oh yeah, like this. And then when I'm done with the task, I put it in my cup.
Kate Bendewald
Oh my god, that is so cute. You know, my cup
Katie Gutierrez
gets filled. I'm like I feel really accomplished. That is adorable. I really want to put a note in the in the cup.
Kate Bendewald
Yes. I love that. I love that. Oh, Sandy says I love the idea of rewarding myself. Me too. Girl. I'm in Enneagram seven. So those steps again somebody's asking for them are make it obvious. make it attractive. Make it easy and make it satisfying
Katie Gutierrez
buying.
Kate Bendewald
Yeah, the best part. Funny About I love post it notes I have a love affair with Office Supplies, specifically posted notes. And one year my assistant and I we use them all the time that when we were done, we stuck them on the wall. And at the end of the year, we had this whole wall full of sticky notes. You're like, this is what we just did this last year. You guys like my self portrait my kiddo made me or portrait of me, I should say.
Katie Gutierrez
I love it looks just like you. Yeah, so
Kate Bendewald
yeah, so that's it. I'm going to just gonna recap one more time. So number one, the three commitments are number one, commit to running a business like a CEO so that you have a long term strategy for your business that is sustainable, and helps you avoid burnout. Number two, committing to tracking your key performance indicators. So that you can start to identify what areas truly need to improve instead of just guessing. And number three, is committing to building better habits so that you can start to create a drumbeat for your business instead of flying by the seat of your pants. Okay. That's it guys. Like, there it is.
Katie Gutierrez
There it is. That's the blueprint for profit. If you've written down these three commitments, and by the way, like, what I love about this is there are three, right? There are three it's not she didn't say like write down these 165.7? No, it's like, there's three, if you can commit to these three, watch your profitability skyrocket through the roof. In the chat right now, you're gonna see a link to Kate's gift. Kate, do you want to tell us about that gift?
Kate Bendewald
Yes, absolutely. Okay, so we did a bundle, because we were like, well, we just want to give it all away. So inside, you'll find we've put together a custom playlist of podcast episodes and a few blog posts around this topic. So more on profitability, time tracking, better habits, those kinds of things, money routines, we also did a free download of our seven habits of highly profitable interior designers. So you can grab that too. And then I also stuck in there a video tutorial. Because I'm extra, I'm like, keep giving him stuff away. It's it's fun, on how to use harvest to manage your projects, time and budget. So all of that's in a little bundle.
Katie Gutierrez
Thank you so much for your generosity, and your wisdom. We all appreciate it so much, Kate, this has been really, really fantastic. And I know that this is for everybody. I know that Kate Yeah, Jen's like, thank you so much. fantastic presentation. Kate. Oh, wait, well, thank you, we want to thank our sponsor, my Gotcha app.com, an app created just for interior designers to be able to lead generate faster, bigger, better and stronger and easier. So if you haven't yet downloaded my Gotcha app.com specifically made for interior designers, you're definitely gonna want that. And by the way, it's free. So like, why wouldn't you use that, and it's an incredible tool for lead generation. Now, Kate, thank you so much.
Kate Bendewald
Thank you. Thank you so much. And thank you to everyone that was here. I had a blast. You guys. The summit is outstanding, and you guys are in the right spot. So be proud of yourselves for showing up and being here. It's, you're doing the work. You're doing the work.
Katie Gutierrez
I love that you said that. Because in my experience running my business, education is period, my key to success. And I love that you just pointed that out. 100% here. Yeah. Thanks. Thanks for having me.
Kate Bendewald
And thanks for putting this together. It's really it's really good. All right, y'all enjoy the summit. 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.
