Why Should You Start an Interior Design Business?

The demand for interior designers is currently sky-high. Interior design is a creative skill required in both residential and commercial spaces. It involves an artistic vision that can turn a boring place into a “WOW!”

Interior design offers flexibility—you can work independently, collaborate with firms, or specialize in niche markets like sustainable or luxury design. The financial growth potential is significant, especially as you build a strong portfolio and network. If managed well, interior design can be a promising business idea.

Benefits of starting an interior design business:

• High demand in residential and commercial sectors
• Potential for financial growth with experience
• Flexibility to work independently or expand into a full-scale firm
• Makes a real impact by enhancing people’s living and workspaces

Now that we have determined why you should start an interior design business, let’s discuss how to do so step-by-step!

How to Start an Interior Design Business Successfully?

1. Make a Business Plan

To create a business strategy, first investigate and analyze your competitors to identify your unique selling features. Outline the services you intend to offer, whether residential design, commercial spaces, or a specific niche.

You may examine and revise your strategy regularly to meet the changing demands of your business and the dynamic interior design market. A successful business interior design plan will help you create a growing firm.

For example, suppose you are initially planning on providing interior design services for commercial firms or restaurants, but, you say “YES” to a Kitchen interior design without any planning or knowledge. In this case, your business could collapse even before you start.

When your resources are available for commercial interior design work, it can’t go with Kitchen interior design.

This is the reason why proper planning and correct decision-making is essential when you start a business.

2. Choose Your Business Name and Structure

Selecting an appropriate business name and structure are pivotal decisions. It will be instrumental in the development of your interior design company strategy.

Once you’ve settled on a name, it’s time to determine the business structure that aligns with your goals and preferences. Combining a compelling business name and a suitable structure lays the foundation for a strong and recognizable interior design enterprise.

Your business structure determines how you pay taxes, your liability, and how you operate. The most common structures for an interior design business are:

a) Sole Proprietorship

• Simplest and most cost-effective structure.
• You operate as an individual, and all profits/losses are yours.
• Personal liability: If your business incurs debt or legal issues, your assets are at risk.
• Best for freelancers or solo designers starting with minimal risk.

b) Limited Liability Company (LLC)

• Offers personal liability protection, meaning your assets (home, savings) are separate from business debts.
• More credibility with clients and vendors.
• Flexible tax structure: You can choose to be taxed as a sole proprietor, partnership, or corporation.
• Ideal for small to medium-sized interior design firms.

c) Corporation (C-Corp or S-Corp)

• Separate legal entity from its owners, providing strong liability protection.
• C-Corp: Profits are taxed at both corporate and personal levels (double taxation).
• S-Corp: Avoids double taxation but has ownership restrictions.
• More paperwork and higher setup costs but beneficial for large-scale firms with multiple stakeholders.

d) Partnership (for businesses with multiple owners)

• General Partnership (GP): All partners share profits and liabilities.
• Limited Partnership (LP): One partner has unlimited liability, while others have limited liability.
• Limited Liability Partnership (LLP): All partners have limited liability, similar to an LLC.

3. Register Your Interior Design Business and Get an EIN

After settling on a business name and structure, formally registering your interior design firm is the next crucial step.

This is your company’s unique identification, which is used for tax, banking, and other official documents.

With your business officially registered and equipped with an EIN, you are well on your way to operating your interior design business legitimately and organized.

What is an EIN?

EIN stands for Employer Identification Number which is a federal tax identification number for businesses. EIN plays a key role in IRS tax identification.

How to get an EIN?

You can apply for EIN in 4 different ways:

• Apply Online
• Apply by Fax
• Apply by Mail
• Apply by Telephone (International Applicants)

4. Obtain Necessary Licences and Business Permits

Securing the required licenses and business permits is critical in ensuring your interior design business’s legal compliance and legitimacy.

Here is a general list of insurance to consider while you are aiming at how to start an interior design business:

4.1 General Business License
• Required in most states, cities, or counties to legally operate a business.
• Fees vary based on location and business type.

4.2 Interior Design Certification & Licensing (If required in your state/country)

• Some states require professional certification, especially for commercial projects.
• The National Council for Interior Design Qualification (NCIDQ) exam is widely recognized.
• In some places, an interior designer must work under a licensed architect for commercial projects.

4.3 Zoning Permit

• Ensure that your business location complies with local zoning regulations

4.4 Home Occupation Permit (If operating from home)

• If you’re running your business from home, some cities require a permit to ensure compliance with zoning laws.

4.5 Sales Tax Permit (Seller’s Permit)

• Required if you sell furniture, decor, or design products.
• Allows you to collect and remit sales tax.

4.6 Federal Tax ID (EIN)

• Ensure you have an Employer Identification Number (EIN) from the IRS obtained during the business registration.

4.7 Building & Contractor Permits (If handling renovations)

• If your services include remodeling or structural changes, you may need contractor or builder licenses.
• In some cases, interior designers need to collaborate with licensed contractors.

4.8 Health Department Permits

• Depending on your services, you might need health department permits, especially if you’re involved in kitchen or bathroom design.

4.9 Environmental Permits

• Some design projects may require environmental permits, especially if they involve changes to the structure or materials.

4.10 Fire Department Permits

• Certain projects or business locations may require approval from the fire department.

4.11 Insurance

• While not a permit, having appropriate insurance, such as liability insurance, is crucial for protecting your business.

5. Build Your Portfolio

Creating an attractive portfolio is an important step toward establishing credibility and demonstrating your abilities as an interior designer.

Here’s a guide on how to effectively build your interior design portfolio:

• Curate Diverse Projects
• High-Quality Photography
• Before-and-After Shots
• Project Descriptions
• Highlight Your Style
• Include Personal Projects
• Collaborations and Testimonials
• Keep It Updated
• Create a Digital Portfolio
• Showcase Your Process

6. Define Your Interior Design Services

Clearly articulate the specific services you offer, whether residential design, commercial spaces, or a niche specialization.

Outline the extent of your services, such as home or commercial interior design, space planning, colour consultancy, furniture selection, and project management. This clarity not only helps potential clients understand what you offer but also distinguishes your business in the competitive interior design market.

Interior design business can be of various types. Here is a list of major interior design businesses you can start with.

• Interior Decorator
• Kitchen Designer
• Commercial Designer
• Production Designer
• Art Deco
• Mid-Century Modern
• Hollywood Glam
• Art Moderne
• Biophilic Design
• Upscale Restaurants
• Transitional
• Retail

7. Purchase Equipment for Interior Design Business

Small business owners can consider investing in essential equipment such as drafting tools, measuring instruments, and a reliable computer with design software.

You can also explore materials and fabric samples to enhance your design presentations. Adequate equipment ensures efficiency in your projects and contributes to the professional image of your interior decorating business.

Here’s a detailed list of essential equipment:

Measuring and Surveying:

• Tape Measures: Essential for accurate space planning and furniture placement.
• Laser Distance Measurers: Provide precise measurements for larger spaces.
• Rulers: For smaller measurements and drawings.

Design and Presentation:

• Samples and Swatches: Fabric, paint, tile, and wood samples to help clients visualize materials.
• Color Wheels: To understand color theory and relationships.
• Presentation Boards / Mood Boards: To showcase design ideas and inspire clients.
• Fabric Samples: To help clients visualize textures and patterns.
• Paint Chips: To match colors and textures for walls, furniture, and accessories.
• Presentation Folders/Binders: To organize and present design proposals.

Other Essential Tools:

• Scissors: For cutting samples and materials.
• Masking Tape: For marking areas and protecting surfaces.
• Electric Tape: For wiring and electrical work.
• Dust Pans and Brushes: For cleaning up after projects.
• Measuring Tools: For accurate space planning and furniture placement.
• Sketching Tools: Pencils, erasers, and paper for sketching ideas.
• Notebooks: To keep track of ideas, measurements, and client notes.
• Calculator: For calculations and budgeting.
• Camera: To document projects and take before/after photos.
• Business Cards: To promote your business.
• First-aid kit: For minor injuries on site.

8. Hire a Dedicated Team

As your interior design business grows, hiring a dedicated team becomes a vital step in expanding your capabilities and meeting the demands of multiple projects.

Building a collaborative team in the office space allows for a more efficient workflow, fosters creativity, and enables your business to take on diverse projects.

Hiring a dedicated team enhances your capacity to deliver outstanding design solutions and contributes to the overall success of your interior design business plan.

9. Select Best Tools and Software

Selecting the right interior design software and tools is critical for your interior design business’s smooth operation and success.
Here’s a list of software and tools to consider:

Design Software:

• Adobe Creative Suite (Photoshop, Illustrator)
• SketchUp
• AutoCAD

Project Management Tools:

• Trello
• Asana
• Monday.com

Communication Tools:

• Slack
• Zoom
• Microsoft Teams

Accounting Software or Invoicing Software:

• Moon Invoice (for professional and streamlined billing processes, interior design invoice template, etc.)

Client Presentation Tools:

• Canva (for creating visually appealing presentations)
• Adobe Spark

Material and Product Sourcing:

• Houzz
• Material Bank
• Pinterest (for inspiration and collaboration)

3D Rendering Software:

• V-Ray
• Lumion

Collaboration Tools:

• Dropbox
• Google Workspace (formerly G Suite)

Customer Relationship Management (CRM):

• HubSpot
• Zoho CRM

Calendar and Scheduling:

• Calendly
• Doodle

Task Automation:

• Zapier
• IFTTT (If This Then That)

Virtual Meeting Tools:

• Zoom
• Microsoft Teams

Measurement Tools:

• Laser measures
• RoomSketcher

10. Plan Pricing Models

Pricing your interior design services takes careful consideration of several elements. Consider the time invested, resources used, and any additional costs associated with each project. It is necessary to provide a correct estimation of your each project cost (based on complexity) on your website.

Be transparent with clients about your pricing structure, whether it’s an hourly rate, a flat fee, or a combination. Do not forget to account for any overhead expenditures, such as software, tools, or travel fees.

Establishing a fair and competitive pricing strategy will not only reflect the value you provide but also contribute to the sustainable growth of your interior design business.

11. Manage Finances and Establish Payment Methods

It is important to open a separate business account for your business as an interior design professional. This helps create separate finances with a dedicated business bank account. A business credit card can provide financial flexibility.

Once this is done, you need to implement a reliable invoicing software like Moon Invoice to ensure smooth and timely payments. Moon Invoice’s simple interface makes it a perfect choice for interior designers.

With Moon Invoice, you can get direct payments for your invoices through credit cards, net banking, debit cards, or UPI.

Moon Invoice includes features like:

• Accepting and billing internationally
• Automated payments and reminders
• Multiple payment gateways
• Integration with Stripe, UPI, PayPal, Square, etc.
• It provides an interior design invoice template for your business.

12. Start Branding and Make an Online Presence

A trustworthy brand image and online presence are critical to your company’s success.

Here’s a list of steps to start an interior design branding plan and online visibility:

• Create a Logo: Create a professional and memorable logo that represents your aesthetic.
• Design a Website: Create a user-friendly website that highlights your portfolio, services, and contact information. Platforms like Wix or Squarespace can be helpful.
• Social Media Platforms: Create profiles on popular social networking networks like Instagram, Pinterest, and Facebook. Share your portfolio, design insights, and engage with your audience.
• Professional Photography: Invest in professional photographs for your creative tasks. Display these photos on your website and social media to display your knowledge.
• Marketing: Start a blog or share design-related content on your website. You can also create an email list and send newsletters to your audience. Share design suggestions, project updates, and special offers.
• Client Testimonials: Include client testimonials on your website and marketing materials. Positive feedback fosters confidence among potential clients.
• Create a Google My Business Profile: Create and optimize your Google My Business profile to increase your local presence.
• Collaborate with Influencers: To increase your reach, partner with influencers or other industry leaders.
• Online Advertising: Consider using platforms like Google Ads or social media to reach a larger audience.
• Implement SEO Strategies: Use relevant keywords, create high-quality content, and ensure your website is mobile-friendly to improve its search engine ranking.
• Consistent Branding Across Platforms: Maintain a consistent brand image throughout all online channels, such as your website, social media, and marketing materials.

How Much Does it Cost to Start an Interior Design Business?

The cost of starting an interior design business varies based on factors such as location, business scale, and specialization. On average, a small interior design business may require an initial investment between $10,000 and $50,000. Thorough research and budgeting are essential for a smooth and successful launch.

Here’s a breakdown of key expenses to consider:

• Education and Skill Development – Costs for interior design courses, certifications, workshops, or a degree program.
• Business Plan and Legal Fees – Expenses for hiring a professional to draft a business plan, legal fees for business registration, licensing, and compliance.
• Business Registration and Licensing – Costs vary by location and depend on the chosen business structure.
• Portfolio Development – Includes professional photography, printed materials, and an online portfolio to showcase work.
• Office or Studio Space – If not working from home, renting office space or a co-working studio adds to expenses.
• Tools, Equipment, and Software – Investments in drafting tools, measuring equipment, a computer with design software, and project management tools.
• Marketing and Branding – Website development, social media marketing, business cards, paid ads, and networking events.
• Insurance – Liability insurance, professional indemnity, and business coverage to protect against potential risks.
• Initial Inventory & Sample Materials – Costs for fabric swatches, paint samples, furniture catalogs, and client presentation materials.

How to Get Clients for Interior Design and Grow Your Business?

Attracting clients is essential for growing your interior design business. A strategic approach can help you establish credibility and expand your reach. Here are effective ways to gain clients:

• Leverage Your Network – Use personal and professional connections to spread the word about your services. Referrals from friends, family, and past colleagues can be valuable.
• Maintain Professionalism – Be punctual, respond promptly, and communicate clearly. A strong reputation for reliability builds trust and encourages repeat business.
• Showcase Client Testimonials – Positive reviews on your website and social media provide social proof and reassure potential clients of your expertise.
• Join Local Networking Groups – Engage with real estate agents, contractors, and business owners through networking events to establish a strong local presence.
• Be Transparent About Pricing – Clearly outline your pricing structure to avoid misunderstandings. Use professional invoicing tools to streamline billing.
• Deliver Exceptional Customer Service – Happy clients are more likely to refer your services. Prioritize client satisfaction to encourage word-of-mouth marketing.
• Collaborate with Industry Professionals – Partner with realtors, architects, and home stagers for mutual referrals and expanded reach.
• Offer Special Promotions – Attract new clients by providing limited-time discounts or bundled service packages.
• Update Your Portfolio Regularly – Showcase your latest projects to highlight your evolving skills and keep up with design trends.

Wrapping Up!

Starting your venture may seem daunting, but armed with the right tips and creativity, you’re well on your way.

From crafting a business plan to developing a digital presence, you’ve discovered the crucial elements that set the stage for success. Remember to continually refine your skills, stay connected with your network, and stay updated with the latest design trends.

Frequently Asked Questions