Home is where the heart is, and everyone wants their place to feel comfortable and welcoming — especially nowadays, when many of us are spending more time at home. Interior design enables you to use your creative talents and help clients achieve the home of their dreams, and you can do it whether you have a degree in design or not. The US interior design industry is worth $17 billion and seeing strong growth, so the opportunity is there for a bold entrepreneur.
With hard work and patience, you can tap into that market and build your own business. But having the right information will be crucial. Fortunately, you’ve come to the right place, as this step-by-step guide will help you design your entrepreneurial future.
Step 1: Decide if the Business Is Right for You
Pros and cons
An interior design business has pros and cons that you should consider before you decide if starting your own business is the right path for you.
- Creativity – Help people design the home of their dreams
- Profit Potential – Strong profit margins in design
- Low Startup Costs – Limited initial investment
- Demanding Clients – Pressure to please exacting home-owners
- Building Brand – Acquiring clients will be difficult initially
Interior design industry trends
The latest trends in interior design include a shift to bolder, more maximalist styles, rather than the minimalist, Scandinavian sensibility that had long been popular. Bright primary colors and sculptural furniture are also trending, as are bold wallpapers and sustainable design choices with environment-friendly materials.
Industry size and growth
Trends and challenges
Trends in interior design include:
- An uptick in construction activities presents opportunities for interior designers
- Increasing use of digital technologies in interior design
- Growing preference for sustainable and wellness-focused designs
Challenges in interior design include:
- Many regulatory requirements
- Building your brand and finding clients
What kind of people work in interior design?
How much does it cost to start an interior design business?
The startup costs for an interior design business range from about $4,000 to $15,000, with an average of about $9,500. The high end includes renting an office space, so if you work from home when you start, your costs will be lower.
If you have no training or experience in interior design, it’s probably a good idea to enroll in a course or two at a nearby university or community college. This will cost $1,000-$2,000.
|Startup Costs||Ballpark Range||Average
|Setting up a business name and corporation||$150 - $200||$175
|Licenses and permits||$200 - $300||$250
|Insurance ||$100 - $300||$200
|Business cards and brochures||$200 - $300||$250
|Website setup ||$1,000 - $3,000||$2,000
|Office security deposit||$0 - $5,000||$2,500
|Initial marketing budget||$2,500 - $5,000||$3,750
|Interior design courses||$0 - $1,000||$500
|Total||$4,150 - $15,100||$9,625
How much can you earn from an interior design business?
The average interior designer charges about $1,000 per room, depending on the client and the size of the room. Profit margins usually range from 25% to 40%, though if you start with a home office your margin could be as high as 80%.
So, if you work from home and design 50 rooms in a year that would mean $50,000 in annual revenue and $40,000 in profit. As your brand gains recognition, you might design as many as 500 rooms in a year, which would also require you to rent out an office and hire staff, reducing your margin to 30%. From annual revenue of $500,000, you’d have a pre-tax profit of about $150,000.
What barriers to entry are there?
There are a few barriers to entry for an interior design business. Your biggest challenges will be:
- It will take time and marketing expense to become profitable
- You’ll likely need some interior design experience/training to draw clients
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Step 2: Hone Your Idea
Now that you know what’s involved in starting an interior design business, it’s a good idea to hone your idea in preparation to enter a competitive market.
Why? Identify an opportunity
Research other interior designers in your area to see what they offer. Do they do residential design, commercial properties, or both? See what specific services they offer as well. You’re looking for a market gap to fill or a way to differentiate your business.
What? Determine your products or services
Consider what services you will offer your clients. You might:
- Have furniture and other items delivered
- Bring in your own contractors to paint, restructure
- Offer full installation, or simply provide the design
How much should you charge for interior design?
The client’s price for the interior design of a single room runs from $400 to thousands of dollars, with the average around $1,000. Keep in mind, this total is only for the design. The purchase and installation of any relevant items — paint, wallpaper, furniture, accessories, etc. — represent additional costs for the client.
Once you have established your business, you should aim for a profit margin between 25% and 40%. Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market will depend on the services you offer. If you decide to offer full-service design, you’ll target a higher-end demographic of older and more established professionals. You’re more likely to find such people on sites like LinkedIn or Facebook, rather than Instagram or TikTok.
Where? Choose your business premises
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on Craigslist, Crexi, and Commercial Cafe.
When choosing a commercial space, you may want to follow these rules of thumb:
- Central location accessible via public transport
- Ventilated and spacious, with good natural light
- Flexible lease that can be extended as your business grows
- Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
- Short, unique, and catchy names tend to stand out
- Names that are easy to say and spell tend to do better
- The name should be relevant to your product or service offerings
- Ask around — family, friends, colleagues, social media — for suggestions
- Including keywords, such as “interior design” or “home design”, boosts SEO
- Choose a name that allows for expansion: “Jim’s Bakery” over “Jim’s Cookies”
- Avoid location-based names that might hinder future expansion
- Use online tools like the Step by Step business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
- Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
- Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
- Product and Services: Describe your interior design services in detail.
- Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
- Competitive Analysis: Analyze main competitors, assess their strengths and weaknesses, and create a list of the advantages of your services.
- Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
- Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
- Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
- Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
- Appendix: Include any additional financial or business-related documents.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states offer real advantages when it comes to an interior design business.((https://www.theaterseatstore.com/blog/best-worst-cities-interior-designers))
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your interior design business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
- Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
- General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
- Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
- C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
- S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Step 6: Register for Taxes
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
- Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
- SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
- Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
- Venture capital: Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
- Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
- Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
- Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best options, other than friends and family, for funding an interior design business. You might also try crowdfunding if you have an innovative concept.
Step 8: Apply for Licenses/Permits
Starting an interior design business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Step 9: Open a Business Bank Account
Before you start making money you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your interior design business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
- General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
- Business Property: Provides coverage for your equipment and supplies.
- Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
- Worker’s compensation: Provides compensation to employees injured on the job.
- Property: Covers your physical space, whether it is a cart, storefront, or office.
- Commercial auto: Protection for your company-owned vehicle.
- Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
- Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.
Step 11: Prepare to Launch
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Smart Designer, Houzz, and HoneyBook, to help you create proposals, manage billing, schedule appointments, and more.
- Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
- If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Some of your business will come from online visitors, but still, you should invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
- Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
- Instagram: Same benefits as Facebook but with different target audiences.
- Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Call Now”. This can sharply increase projects.
- Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
- Signage – Put up eye-catching signage at your office and website.
- Flyering – Distribute flyers in your neighborhood and at industry events.
- In-Person Sales – Offer your services to real estate agents and at trade shows.
- Sponsor events – You can pay to be a sponsor at events that are relevant to your target market
- Post a video – Post a video about your interior design services. Use humor and maybe it will go viral!
- Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
- Seek out referrals – Offer incentives to generate customer referrals to new clients.
- Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
- Pay–per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
- Make a podcast – This allows you to make a personal connection with your customers.
- Do a webinar – Share your interior design expertise online with a video seminar.
- Testimonials – Share customer testimonials about how your services helped them.
- Create infographics – Post infographics and include them in your content.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your interior design business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your interior design business could be:
- Design from beginning to end – you won’t lift a finger
- Home office expertise for the perfect life-work balance
- Soothing Feng Shui design for harmony and comfort
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an interior design business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working as an interior designer for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in interior design. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an interior design business would include:
- Designers – Assist with design, purchasing
- Movers, Painters, Builders
- Office Manager – scheduling, staff management
- Marketing Lead – SEO strategies, social media, other marketing
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Start Making Money!
Particularly today, everybody wants a home that is inviting and aesthetically pleasing. With your own interior design business, you can use your artistic talents to help customers design and build the home they’ve always wanted.
Interior design is a multi-billion-dollar industry that expects to see continued growth into the future. With proper research and an effective marketing campaign to create a strong brand, you can grow your company into a very lucrative one. You’re off to a good start already by gathering the best information. You’re now ready to design your future and start your entrepreneurial journey! Good luck!
Interior Design Business FAQs
How much does it cost to start an interior design business?
Costs to start an interior design business are relatively low if you work from home as a solopreneur. You should be able to start with around $4,000, most of which is for marketing yourself.
Do I need a business license to start an interior design business?
There is no specific interior design license. Your business license requirements will depend on your state and locality. You should check with your state and local government offices to find out what your business needs.
How do I start an interior design business without a degree?
A degree is not required, but it definitely adds to your credibility. You can take online courses to learn about design, or you could start by working for an interior design company to learn the ropes.
How much can I make with an interior design business?
Profit margins are relatively high for an interior design business. You should be able to charge about $1,000 per room, and if you hire a staff, the sky is the limit to how large and profitable you can grow your company.