Interior Design Business Plan Template
If you want to start an Interior Design business or expand your current Interior Design business, you need a business plan.
The following Interior Design business plan template gives you the key elements to include in a winning Interior Design business plan.
Interior Design Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is an interior design firm in [location] that handles residential and commercial spaces within the city, but also works on projects nationwide. It specializes in modern and contemporary styles, but also provides customized design services for any type of project.
The company aims for beauty, functionality and excellence in every project. Thus, its team of designers are the best in their field, experienced and equipped with a high quality educational background in Interior Design and related fields. Most of all, client satisfaction is [Company Name]’s priority. It prides itself in achieving clients’ goals for their space without compromising design, quality and comfort.
Products Served
[Company Name] will be able to provide the following services to its clients:
- Interior design: Planning and designing of indoor spaces
- Design and build: Designing and supervision of a new space from start to finish
- Renovation: Space improvement and remodeling
- e-Design: Online interior design consultation that includes space design/plan, coordinating with client’s local suppliers for furniture and raw materials, and access to [Company Name]’s online space designing platform.
[Company Name] designs projects for residential and commercial properties, as well hospitality clients.
Customer Focus
[Company Name] will primarily serve the residents who live within the city. The demographics of these customers are as follows:
- 226,520 residents
- 20,541 businesses
- Average income of $58,100
- 44.6% married
- 39% in Management/Professional occupations
- Median age: 37.2 years
Management Team
[Company Name] management team is led by its owner, the entrepreneur-turned-interior-designer, [Founder’s Name]. [Founder] worked as a business consultant for [x] years at [Company Name] and later pursued a career in Interior Design. He passed the exam for the National Council for Interior Design with high remarks.
[Founder’s Name] will lead the company with his colleague, [Manager B], who is also an interior designer from [Location]. He will assist [Founder] with the entire operation of [Company Name].
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- [Company Name] is the first in [city] to have an online design planning platform for interior designers and clients to interact.
- The management team has a track record of success in the interior design business and hies designers with outstanding educational background and portfolio.
- Our location is in an economically progressing area where businesses are flourishing and expanding and residents are earning more income that they can use for home renovations.
Financial Highlights
[Company Name] is seeking a total funding of $220,000 of debt capital to open its interior design business. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Headquarters design/build: $100,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is an interior design firm in [location] that handles residential and commercial spaces within the city, but also works on projects nationwide. It specializes in modern and contemporary styles, but also provides customized design services for any type of project.
With the integration of advanced technology, [Company Name] allows its clients to make design amendments through the eDesign service. With this technology, the clients have access to an online space designing platform that they can view to see how their actual space would look like. This also has an edit feature where they can make changes to the designer’s layout to show what they need for their space.
The company aims for beauty, functionality and excellence in every project. Thus, its team of designers are the best in their field, experienced and equipped with a high quality educational background in Interior Design and related fields. Most of all, client satisfaction is [Company Name]’s priority. It prides itself in achieving clients’ goals for their space without compromising design, quality and comfort.
[Company Name]’s History
[Company Name] was established by the entrepreneur-turned-interior-designer, [Founder’s Name].
In [year], [Founder’s Name] earned a degree in Interior Design and started accepting pro bono projects for his friends to test if he can pursue a career in the design field. His first two projects earned him high praise and future recommendations. He then went on to take the exam for the National Council for Interior Design and when he passed it with high marks, he decided to start his own Interior Design company, [Company Name].
Since incorporation, [Company Name] was able to achieve the following milestones:
- Found a business location and signed Letter of Intent to lease it
- Developed the company’s name, logo and website located at [website]
- Determined equipment and fixture requirements
- Began recruiting key employees
[Company Name]’s Products/Services
Below is [Company Name]’s initial services list:
- Interior design: Planning and designing of indoor spaces
- Design and build: Designing and supervision of a new space from start to finish
- Renovation: Space improvement and remodeling
- e-Design: Online interior design consultation that includes space design/plan, coordinating with client’s local suppliers for furniture and raw materials, and access to [Company Name]’s online space designing platform.
[Company Name] designs projects for residential and commercial properties, as well hospitality clients.
III. Industry Analysis
The Interior Design industry has been supported by periods of growth in residential construction and nonresidential construction. The largest market for the Interior Design industry consists of individuals seeking residential design services. Therefore, growth in housing starts, existing home sales and other residential construction projects generally helps drive revenue growth. As a result, years in which residential construction has grown have been beneficial to the industry.
Per capita disposable income and the number of households earning more than $100K have also played a determining role, since industry services are highly discretionary. Periods of higher consumer confidence, per capita disposable income and corporate profit further drive demand since industry services are generally considered a discretionary spending item.
Over the next five years, the Interior Design industry is forecasted to grow. A return to growth in corporate profit and in the value of nonresidential construction are expected to propel the industry moving forward. In addition, an expected surge in residential construction and growth in consumer confidence and disposable income will drive demand for industry services. An increase in the number of households earning $100K in annual income could pose a potential opportunity for the industry as well. These households are much more likely to spend their income on discretionary or luxury services, such as interior design.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents and businesses in [location] and will soon expand to the surrounding states. [Location] is mostly populated by middle to upper class families that can afford interior design services. The location is also a prime spot for hotels, resorts and restaurants that will need our services as well.
The precise demographics of the town in which our location resides is as follows:
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
The company targets the following customer segments:
- Homeowners: The majority of the population in (location) lives in houses and have disposable income that they are willing to spend in renovations and home or room makeovers.
- Businesses: This includes offices, stores, and shops that are looking to improve their working space for customer appeal.
- Hospitality spaces: The city is home to a number of hotels and restaurants that attract visitors with their updated design and ambiance. This is something that [Company Name] specializes in.
V. Competitive Analysis
Direct & Indirect Competitors
Ambiance
Ambiance is an interior design company that offers design and plant services to businesses. Specifically, the company uses real as well as artificial plants to create interior landscaping displays within an office/commercial business setting, offers plant rental services to its clients, and may also provide services to companies asking for customized requests. Ambiance Ambius offers indoor as well as outdoor landscape and holiday decoration services that can include holiday trees, displays, wreaths, garland, poinsettias. Ambiance can serve companies across the US and Canada with its network of branches throughout these two countries.
Designer Online
Designer Online is a product management platform for commercial interior designers. Designer Online is a platform for commercial interior-construction professionals to connect with their clients, virtually. Designer Online has a directory of ~350,000 products listed by over 5,500 product manufacturers. The company charges a subscription fee, but the core revenue comes from affiliate fees for products purchased on their platform.
Creative Interiors
Creative Interiors is an interior design company that has been serving homeowners since 1991. The company assists homeowners to update and refresh their homes whether they prefer traditional decor or modern design. Services include working alongside architectural designers as well as assisting clients in the selection of custom furniture, window treatments, as well as home accessories for every room in the house. Specific projects the company has been involved in include kitchen remodels, outdoor living spaces, bathroom and powder rooms, ceiling designs, and many others.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s business is located in an area that has a robust business and residential community. It can also expand this reach by working with clients remotely through its eDesign service.
- Expert designers: The company was founded by an expert interior designer with a team of highly qualified interior designers with vast experience in the industry and outstanding portfolios.
- Management: [Founder’s Name] has been extremely successful working in the interior design field and will be able to use his previous experience to provide the best output and service to his clients.
- Relationships: [Founder’s Name] knows many of the local leaders, newspapers and other influences within [location]. With his [x] years of experience and good relationships with construction suppliers, designers, and curators in the area, he will be able to develop an initial client base.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Expert interior design services
- Interactive online design planning platform
- Client-focused services that takes into consideration all the clients’ requests and specifications
Promotions Strategy
[The Company’s] promotions strategy to reach its target market includes:
Social Media Marketing
With the majority of Americans active on social media, the company will invest resources in social media ads. We will create ads that will yield positive conversions.
Online Marketing
A company website will be developed with the goal of targeting search engine traffic. In order to do this, the company will use highly-focused, specific keywords to draw traffic to its website, where potential clients will find a content-rich site that presents [Company Name] as the trustworthy, well-qualified interior design company.
Publications
[Company name] will place print advertisements in key local publications, including newspapers, area magazines, and local sport programs. Additionally, the Company will print brochures and place them in specific locations frequented by target individuals, such as supermarkets and real estate offices.
Major Publications
We will make careful use of advertising in selected larger publications. [Publication or newspaper name] has a circulation of xyz, and we can expect to reach a wider geographic region of customers on a limited basis. Advertisements with major publications will be used selectively, based on cost-effectiveness.
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], as well as promotional information.
VII. Operations Plan
Functional Roles
The Company intends to employ [X] interior designers, [Y] administrative assistants, and [Z] marketing team.
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company name] anticipates using the services of X employees, divided into the following roles:
Service Functions
- Interior Designer
- Administrative Assistant
- Maintenance personnel
Administrative Functions
- General & administrative functions including marketing, bookkeeping, etc.
- Marketing team includes customer representatives to answer general inquiries, social media manager, salesperson
- IT personnel for online platform maintenance
Milestones
[Company name]’s long term goal is to become the most renowned interior design firm in the area. It seeks to be the standard by which other providers are judged.
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]’s management team is led by its owner, the entrepreneur-turned-interior-designer, [Founder’s Name]. [Founder] worked as a business consultant for [x] years at [Company Name] and later pursued a career in Interior Design. He passed the exam for the National Council for Interior Design with high remarks.
[Founder’s Name] will lead the company with his colleague, [Manager B], who is also an interior designer from [Location]. He will assist [Founder] with the entire operations of [Company Name].
Hiring Plan
[Founder] will serve as the Manager of [Company Name]. In order to launch, it needs to hire the following personnel:
- Interior Designers: 2 full-time employees to handle all design projects
- Administrative Assistant: One person to manage the day-to-day client appointments and schedule
- Maintenance Personnel: In charge of keeping the office clean and in order all the time
- Marketing team: 2 full-time employees
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from interior design services from residential properties and hospitality clients.
The office lease, labor expenses, and ongoing marketing expenditures are the key cost drivers of [Company Name].
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $220,000 of debt capital to open its interior design business. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Headquarters design/build: $100,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of clients per month | |
|---|---|
| Year 1 | 5 |
| Year 2 | 7 |
| Year 3 | 9 |
| Year 4 | 11 |
| Year 5 | 12 |
| Average project price | $5000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
