Business plan for opening an interior design studio with calculations

Business relevance

In recent decades, interior design by turning to professional designers has become increasingly popular. More and more individual projects in this area are appearing on the territory of the Russian Federation. An interior design business studio will remain relevant due to the constant growth in demand for its services. In addition to the fact that the commissioning of housing is increasing, the income of the population is also growing. At the same time, people are beginning to live in increasingly comfortable conditions. Design services are therefore a promising industry.

Among the main advantages of opening a design studio are high profitability and low payback periods. In addition, this activity can be organized at home. It is also quite easy to open a business of this kind.

To implement such a project, you need to acquire one office. Only 15 square meters are enough, while the rental price is about 30,000 rubles. The office will need to be equipped with furniture.

Equipment

Any activity, be it trade or an office selling services, requires equipment. This is the most expensive part, but you can’t save on it . You can only limit yourself to the minimum for the first time.

So, you will need:

Graphics station;
Graphics tablet;
Photo printer;
Black and white printer.

A graphics station means a powerful computer. In particular, attention is paid to the monitor, video card and RAM.

Now on the shelves of specialized stores you can find not the most expensive solutions that can solve this problem.

A graphics tablet, in principle, is not included in the list of required equipment. But it is generally accepted that a good designer is capable of creating masterpieces with his own hands.

This means we are looking for a good designer and giving him the opportunity to create. By the way, employees play an equally important role. More about them later.

Payback

The most important step when opening a design studio is calculating the return on investment of the business. As a rule, in this case we are talking about three years. It is believed that it is during this time that the need to expand the business will arise.

That is, the initial investment will pay off within 6 months from the start of the studio’s operation. The required sales volume will be achieved by the end of the first year of operation. The planned net profit is 300,000 rubles per month. In a year, according to a ready-made business plan for an interior design studio, such a business will bring in more than 1,500,000 rubles. Profitability in the first year will be approximately 43%.

Costs and profits

I'm not ashamed to admit that we are not 100% successful. Our experience is painful, but now we know what not to do. After the 2020 crisis, we still have debts, which we are gradually paying off. Moreover, the costs go towards the cost of projects - this is Anya’s and my salaries and payments to designers. We have an accountant who prepares reports and also receives a salary, as well as internal needs, such as communication expenses.

It is quite difficult to say the exact profit, because projects are always different and so are the amounts. The approximate turnover for last year was about 8 million.

Description of the enterprise

It is necessary to take into account the fact that this industry began to gain popularity only a couple of decades ago. At the moment, almost every person who purchases real estate is interested in arranging the premises taking into account all their needs. And here people often turn to professionals in this field. At the same time, most customers want an individualized project. It is this factor that makes opening a design studio a relevant undertaking.

At the moment, design services represent the most important segment in the economy. Every year its turnover is about $15,000,000. At the same time, the market in this area remains closed. Approximately 35% is located in the informal sector of the economy. After all, there are a lot of freelancers in this area.

According to official data, more than 120,000 people are designers. Because the market is closed, true trends in this area are difficult to assess. They are tracked by related areas: for example, by the volume of purchases of finishing materials.

When planning to draw up a business plan for a design studio with calculations, it is necessary to take into account that for the most part, owners of new buildings and those wishing to redevelop a Khrushchev-era building will apply for services in this area. According to official statistics, more and more new buildings will be introduced. And this is an excellent foundation for an interior design business.

Official studies state that more than 65% of sales of finishing materials come from specialists in the field of architecture and interior design. The higher the demand for design, the more decorative elements are purchased. In fact, specialists in this industry act as intermediaries between home owners and sellers of building materials.

Every year the market for these products grew by approximately 20%, but since 2020 the growth has slowed down and is now about 3%. But the market for interior design services is growing by approximately 30%. Before opening an interior design studio, you need to analyze the demand for such services in your region. And the results of these analyzes will most likely be very positive: services of this kind are in demand.

New team and principles of work

In 2020, everything fell into place because we listened to smart people and optimized costs. Now we do not have an actual office - only a legal address attached to the rented premises. There is a core team, but some designers regularly work with us as freelancers. There are no managers left at all; their duties are performed by me and Anya. We have been on the market for so many years that we do not need additional advertising or sales. People turn to us because they know and trust.

When we were just planning to get into design, there was a chance to become the same - just one of the players. Now I can say, not without pride, that Alalai, although it does not occupy a place in the ratings, is known in its own way on the market. We work in our niche: we have a recognizable face and a certain creative competence. Our projects fit together like puzzles and create a single picture.

Photo courtesy of Alexander Dolzhikov

"Alalai" is a very informal word. Some clients say: “Well, your name is not serious.” Some people see something vulgar, some see it as childish, and some even see a line from a song. For us, this word is a litmus test. It is as unusual as we are. I dye my hair different colors and never wear a shirt and jacket to meetings. Anya is the same, and this is our principled position. If someone doesn’t like the way we look, I’m sorry.

The same goes for the name. It clearly filters clients into ours and not quite. Some come and say: “Damn, guys, cool word.” Most often, we succeed with such people, because our position and the projects that we implement are close to them. If someone wants to make a boring logo for an iron factory, they don’t come to us.

Advantages and disadvantages

Using the example of a business plan for an interior design studio, the advantages and disadvantages of an enterprise in this industry are clearly visible. So, it pays off quite quickly, this is not a seasonal market, there will be no need for large expenses, the profitability is high and it is possible to conduct several projects in parallel. Even during a crisis, interior design services remain in demand. Disadvantages include high competition, the need for constant contact with clients, and the attraction of highly qualified workers. Also, demand may be inconsistent.

By and large, those who are interested in how to open a design studio from scratch should count on an attractive business. There will not be many difficulties at the opening stage; it will be much more difficult to turn an enterprise of this kind into a profitable one. The main task here will be to occupy your niche in the industry; you will need to highlight competitive advantages.

There is no doubt that the implementation of a business plan for opening a design studio should be undertaken by a person who has professional skills in this area. Having formed a portfolio and developed a client base, it will not be difficult to achieve success.

Revival of the project and rebranding

Despite the closure, orders continued to come through the Optimal Solutions Bureau because former clients shared our contacts with other people. We completed some tasks, and abandoned others.

At one point, a request arrived from a fast food chain, and the amount of the transaction was very similar to the amount of our debt - 3 million rubles. Anya and I discussed for some time that we could pay off the debt and feel like free people, but in the end we decided to take into account past mistakes and invest the money we earned in a new business. True, now choose a narrower direction: a design studio.

For 75,000 rubles a month, we rented a room that already had tables, internet, a cooler and even a reception for receiving documents. All that remained was to acquire the equipment. We bought two iMac computers for 150,000 rubles. This time they were looking for employees through HeadHunter - they simply posted two advertisements looking for managers and designers. So we hired four guys and started working.

The girl Nastya, whom we hired as a designer, quickly rose to art director because she is very talented. Her level turned out to be 10 goals higher than what we expected at that time. I want to say a huge thank you to her, because it was thanks to her efforts that “Alalai” became what many people know it to be.

Photo courtesy of Alexander Dolzhikov

Services

This business plan for opening a design studio involves the provision of space design services. The list may include: layout design, interior sketches with furniture arrangement, using the latest 3D visualization technologies.

Sanctions and failure

For two years we existed quite well. This time was spent creating the portfolio I had in mind. Many design companies specialize in only one type of work, such as logos or printing. I always wanted Alalai to be able to develop any design for a client, be it presentation or packaging. Now we are a studio that can do everything, and this is our specialty.

In the summer of 2020, a new crisis stage began. Design work has become significantly less, because another round of American sanctions prohibited our clients from working with small companies like ours. They had to choose certain contractors that fit within the constraints.

We approached the summer of 2020 with absolutely no orders. Despite the lack of work, we didn’t want to disperse the team with the words “Guys, sorry, we didn’t succeed.” However, employees began to leave on their own. Art director Nastya was invited to work on a more interesting project, and the others also gradually began to leave us.

By the fall of 2020, we found ourselves without a team.

Finding a designer was not difficult, but we could no longer achieve the level that we ourselves had stated in the portfolio. As a result, we missed the advertising season and again fell into the abyss of debt. At this moment, Anya and I were in slight shock and did not understand what to do. Everything seemed to be in order, but for some reason it didn’t work out again.

Photo courtesy of Alexander Dolzhikov

Concept

In this business plan for a design studio, it is recommended to combine 2 directions at once. Firstly, this is the interior design itself, and secondly, services for coordinating changes. This guarantees the largest audience reach. Offering only project development makes sense to those who already have their own client base and have established themselves as professionals in this industry.

Each stage of work must be formalized in a separate agreement. Thanks to this format of work, it will be easier to understand what results are to be expected. The customer will also be able to contact a professional regarding a specific type of work.

What needs to be done to get the most profit?

Obtaining optimal profit directly depends on the quality of the created business plan, since it is precisely this that must be followed in the process of managing an enterprise. It is also assumed that not only individuals, but also all kinds of institutions and enterprises can become clients, which is also important to take into account. It is necessary to highlight several stages of creating a business plan, which must be completed to create a truly competent organization. A high-quality business plan should contain each of the points included in these stages.

Sales and advertising

In this business plan for a design studio, both individuals and corporate clients are considered as the target audience. The most important element in promoting a company is its own website. Here you need to place a portfolio of work, thanks to which attracting clients will happen much faster. This will also improve the reputation of the establishment. The Internet resource facilitates interaction with the client. It is important to indicate on the website a list of services, prices for work, and provide contact information. It is allowed to publish articles that might be of interest to customers. The cost of creating such a website will be about 40,000 rubles. To gain more clients, you will need to bring it to the TOP of requests. You will need to involve SMM specialists, the cost of this will be from 20,000 rubles.

The next advertising promotion tool will be social networks. It is recommended to create a separate page on Instagram. Photos of projects with useful tips, customer reviews, and so on will be published here. Including this step in your design studio business plan will help you attract potential clients. Once they see such a page, people will subsequently know where to go regarding room design issues.

The company is also advertised in specialized publications. A large number of magazines on interior design are currently being published. The price of promotion will depend on the magazine's reach of the target audience. So, approximately the cost of this item will be 25,000 rubles.

In addition, participation in design conferences can serve as a promotion channel.

The next popular way of promotion is through word of mouth. Typically, people turn to interior design professionals based on recommendations. It is important for clients to see the results of the work of the designer they contact.

This design studio business plan provides for about 80,000 rubles to be spent on promoting the company. For the most part, they will be spent during the first time of work. In this case, it is not recommended to save on marketing.

In advertising promotion, it is imperative to highlight competitive advantages. For example, a large number of reviews and a rich portfolio will help you attract more clients. You also need to implement a well-structured system of working with customers. The studio should focus on budget projects, which will initially attract as many clients as possible. As a rule, a designer processes about 150 square meters per month. The price will be about 1300 rubles. At first, you need at least 3 specialists, and then the revenue will be about 400,000 rubles.

Promotion of interior design studio

First of all, you need to correctly fill out, optimize and launch your website. Correcting errors made at launch will be difficult and expensive.

To promote your design studio, use contextual, banner advertising and targeted advertising on social networks. Maintaining profiles on social networks is a powerful auxiliary promotion tool. You can get traffic to your website from there or direct orders from people who visit your page. Moreover, interior design is an area where a beautiful visual component is important. High-quality pictures and competent promotion of your Instagram account can bring your first clients in just a few months.

To promote on social networks, you will need an SMM specialist and a targetologist. If you want to set up contextual advertising on the Internet, you need a contextual advertising specialist.

Opening plan

The implementation of the design studio business plan will begin with the registration of the enterprise as an LLC or individual entrepreneur. Then you will need to equip the already selected office space, hire employees, and purchase equipment.

Registration of an enterprise will be a fairly simple step for the reason that a license is not required for design activities. To run this company most efficiently, it is recommended to choose the LLC form, a simplified tax system. To register a legal entity, you need to make a payment of 3,000 rubles. Separate costs at this stage will include printing and setting up a separate bank account.

The search for office space will be aimed at renting a small office - 15 square meters is enough. But it is important that it is in a convenient location and has parking. It will need to be located next to adjacent businesses. It is best to choose a room that is already equipped with furniture. The rental price will be from 30,000 rubles. It is quite acceptable to carry out the same work at home.

The next step is to find employees. From the very beginning, you will need to hire at least 4 professionals - 3 designers, including the business owner and manager. Accounting services will be outsourced. It is necessary to choose those who will be able to provide quality services in this area.

The fourth step will be the purchase of equipment. To ensure the activities of the company, it will be necessary to equip the office with the Internet, telephone communications, computers, professional software, and printers. If you use the entrepreneur's personal computer, you will be able to save money.

Meeting the partner and starting the project

Design did not appear in my life right away. First, I was educated as a sociologist, and then decided to master advertising and PR. When the time came to choose an internship, I ended up at the Moscow Psychological Assistance Service: I was hired as a part-time press secretary. It was here that I realized that PR in real life is very different from what is written in textbooks. Before graduating, I started looking for a job where I would want to stay not only for practice. An acquaintance recommended a small advertising agency, where they hired me for a manager position.

In a new place, I met Anya Ivannikova, who held the same position as me. We instantly became friends, started working on joint projects and realized that we understood each other perfectly. There were a lot of tasks, but we dealt with them professionally, so over time they began to entrust us with complex clients and projects with a deadline that “ended yesterday.” Once, in two weeks it was necessary to decorate 11 car showrooms for the New Year holidays. During the day we communicated beautifully with clients, and at night we unwound kilometers of pine needles and hung balloons.

Photo courtesy of Alexander Dolzhikov

At one point we realized that we had enough experience and desire to create something of our own. Anya planned to open a full-cycle advertising agency: doing printing and branded products for various companies. She invited me to become a partner, and I agreed.

We didn’t have a business plan, sponsors or a huge budget, but we had pure enthusiasm and about 100,000 rubles. We paid half of the amount to rent a room for two months from our partners, and with the remaining money we bought three laptops, a printer, several tables, chairs and office supplies.

Financial plan

In financial terms, the income and expenses of the enterprise are taken into account. The planning horizon in this case will be about three years. It is believed that after the expiration of this period it will be necessary to expand the enterprise.

The financial plan includes an initial investment of 415,000 rubles. 53% of the funds raised will be spent on equipment, 5% on rent, 23% on working capital, 17% on promotion, and the rest will be written off as unforeseen expenses. The studio will be financed directly from the entrepreneur’s pocket.

Fixed expenses include payment for premises, marketing, payment of wages, and other expenses. You will also need to pay taxes. Approximate monthly expenses will be 208,000 rubles.

Finding and retaining potential clients

Of course, when creating a business, it is important to think about finding future clients, but it is much more important to be able to retain them. It is important for the manager to make sure that people themselves want to use the services provided by the studio and want to contact it again.

In order to get what you want, you will need to demonstrate to your clients all your professionalism and skills in terms of creating interiors, and this can be done through several fictitiously created works (a kind of presentation). Such work can be shown to clients as an example that designers can cope with the task and create the desired design project, in accordance with the customer’s wishes.

Studio format

Painting studios can be divided into two types:

Studios where they teach academic painting. They are no different from educational institutions where students receive specialized secondary or even higher education. Classes are divided into theoretical and practical. The skill here is taught long and methodically. Students will have to spend a lot of time to perfect their skills.
Creative studios, here the learning process is carried out in a non-standard way. The main goal of teachers is not to sharpen students' skills, but to demonstrate that drawing is an exciting, fun activity. They practice crash courses for quick learning.

Each of these two formats has its own disadvantages and advantages. There won’t be long lines of people lining up at the studios where academic drawing is taught. More than half of the beginners will drop out after one or two months, when they realize that painting is tedious, hard work that requires patience and dedication. But the students who pass this selection will become regular customers for a long time.

Creative studios do not set out to develop great artists. The only thing that matters here is the fun of the process. They often practice unconventional ways of learning, turning it into a game. There is no such strict selection here as in studios teaching academic painting.

However, clients usually stop their lessons after several months of visits. The program becomes boring and the novelty effect is lost. Creative studios are constantly looking for new clients, but they do not experience a shortage of willing ones. It is this format that we will consider as the main idea for opening a painting studio.

Ready-made business plan for an art studio

Creative studios are mainly found only in large cities, where people have higher incomes. This is rare for the periphery. The main advantage of this format is that students see the fruits of their efforts. For example, in studios where academic painting is taught, beginners can put in a lot of effort, but the result will appear after a long time. Many people quit courses because of this.

In creative studios everything is different. A standard lesson involves copying a famous painting.

Students simply gather in the classroom and begin drawing what they see, under the guidance of the teacher. He prompts and guides each of them, gives valuable advice.

The lesson is over, the painting is ready, the student is happy. Here it is, the result of the invested effort. What is needed to open a studio? This process can be divided into four stages.

Competitors and target audience

Before opening, you need to conduct a market analysis and determine your target audience. You can partially predict how successful your studio will be by hearing from potential students. To do this, you need to conduct a survey or sociological study to find out exactly what genre of drawing will interest your target audience, what price per lesson will be acceptable to them.

Advice When you decide on this issue, you need to find out about your competitors. Are they in this city, where are their studios located, how much do their lessons cost, what promotions do they offer to clients.

Registration

An entrepreneur will have to tinker with registration. If you plan to issue official certificates to your students, which will indicate that they have been trained under the strict guidance of professional teachers, then you will have to register a non-state educational institution. This will take a lot of time and involve a lot of money. Such expenses when opening a creative art studio are not always justified.

Think about your target audience. These are people who view painting as entertainment. Most of them have no plans to become professionals or go further along the thorny path of an artist. They need certificates solely to decorate the walls of the house. Is it worth spending so much money at the very beginning if it doesn't make sense? Register a regular individual entrepreneur. If your studio develops, the shape can always be changed.

Searching for premises and purchasing furniture

It is better to place a drawing school in a busy area of the city. The best option would be a room in the city center. If the prices for renting a square meter here are too high, then you can look for a place in a residential area. It is advisable to have transport links nearby that will provide you with a large flow of potential customers.

The room should be spacious and well lit. If you know even a little about painting, you should understand that artificial light will never replace natural light for an artist. Good ventilation is necessary. Paints and thinners emit strong, specific odors that need to be removed from the room.

For a studio, you need to correctly calculate the area of the room. As a basis, you need to take approximately 1-1.5 sq.m. for each student. This is enough to accommodate a chair and an easel. If you are opening an academic painting studio, in which, in addition to practical classes, theoretical classes will also be held, then you must also count on the placement of desks.

Attention Another important nuance is the presence of a washbasin. Students will regularly get their hands dirty during lessons. A washbasin is a necessity, not a luxury in painting school.

Now you can start purchasing furniture. Let's say right away that if your budget is limited, you can purchase used easels and chairs. This will be enough for a while, and a year or two after opening it will be possible to purchase new ones. The cost of one easel ranges from 2,000 to 5,000 rubles.

Employees

This is one of the most important aspects of a successful business. Your teaching staff must not only have a wealth of knowledge, but also be able to convey it to students and be creative.

The number of teachers must be calculated based on the number of student groups. Calculate in advance which “classes” (based on the number of students) you or your teachers can teach.

Advice: Groups of 6-9 people are considered optimal. Then the teacher will be able to pay enough attention to each of them.

Conducting an advertising campaign

The Internet is the main tool for attracting customers. People should know about the new studio. Creating your own website will cost a pretty penny, so while the school does not generate income, other advertising methods will do:

posting advertisements on free boards on the Internet;
advertising in public transport;
distributing flyers near educational institutions;
advertisements in local print media;
creating a group on a social network.

As soon as the opportunity arises, it is worth ordering the development of a one-page website. It will contain information about the studio, contacts, address, class schedule, photos of students’ work and their reviews.

Market research

Analytical work is an important stage in the formation of a business plan for an art school , since almost all further work is built on its results, including determining development prospects and calculating strategic goals for a certain period.

To ensure the required project performance, it is important to highlight those service qualities that will form the project’s competitive advantages:

convenient location and availability of transport links;
a large selection of areas for study;
own workshops with experienced teachers;
availability of benefits for socially vulnerable categories;
diversity of age groups of trainees.

The development of additional areas, such as music, will help you expand your sales and increase your revenue. A business plan for a private music school will help you launch this direction and achieve a high level of profitability and quick payback of the project.