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Why 100K Is A Bad Income Goal For Your Interior Design Business

You’ve seen those enticing clickbait reels and adverts scattered across social media promising to help you hit the £100K mark in your interior design business …

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Why 100K Is A Bad Income Goal For Your Interior Design Business

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Table Of Contents

You’ve seen those enticing clickbait reels and adverts scattered across social media promising to help you hit the £100K mark in your interior design business. But have you ever paused to consider whether that goal is the right path to success?

As someone who specialises in supporting startup interior design businesses, I can tell you that these types of interior design businesses primarily revolve around providing services with minimal overheads aside from income and software expenses, so while many might perceive £100K as a substantial milestone, it’s essential to question whether it’s the most practical income target. I’m here to challenge that idea. From my experience, setting a lower income goal can often lead to just as much—if not more—success in startup interior design. And here’s why:

NB: This is not to be taken as financial or legal advice and is my opinion.

1 | Disproportionate Taxes

Surprisingly, not every country in the world charges income tax. But unfortunately, in most places, it’s standard, and once you hit that £100,000 mark, you’re often looking at a much higher tax bracket, sometimes as high as 60%.

Let me share my experience with you, which many designers in countries like Canada, Australia, Europe, Japan, Scandinavia, and certain parts of the US can relate to. When I first started my architectural and interior design business, I set my sights on reaching an annual income of £100,000. But as I approached the VAT threshold (or the GST equivalent), which typically falls between £84,000 and £125,000, I had to rethink things.
I realised that once I started earning between £100,000 and £125,000, I was putting in a lot more work for what felt like the same amount of money. And that's because a big chunk of those extra earnings went straight to taxes.

After talking it over with my accountant, he suggested aiming for £160K and over or staying under the £84,000 threshold until the time was right. That way, I could avoid getting stuck in the higher tax bracket where all those different taxes started to add up.

This example is specific to the UK tax system, and I’ve simplified things a bit. But the key takeaway here is to make sure you understand the tax implications in your own country before you set your income goals. And sure, you might think you can reclaim VAT on your purchases, but many startup interior designers mainly offer design services rather than products. So, that VAT or GST ends up just being an extra tax!

How do you know you’re stuck in a startup even if you’ve been in business for a few years? This post will help you to decide: Strategies To Start Or Grow Your Interior Design Business

2 | Additional Administration In Your Interior Design Business

As a startup interior designer, you’re likely getting to grips with much legal information, like building codes and client contracts. You’ve got a huge learning curve in front of you, especially in those first few years while you navigate projects. But as turnover rises, so do administrative responsibilities, including tax filings, financial record-keeping, and compliance with other regulatory requirements.

Navigating these administrative tasks demands valuable time and resources, which could otherwise be allocated to client projects, business development, and creative pursuits. However, once you earn over £100K, you likely deal with increased paperwork, more tax administration, and more projects and clients!

This additional administrative burden placed on your interior design business can detract from your creative energy and the main focus of your business. Therefore, it’s essential to strike a balance and evaluate whether exceeding the £100K mark aligns with your overall business goals and vision, considering the potential administrative challenges.

3 | The Interior Design Business Purchasing Lie

Interior design schools teach a standard approach to offering interior design services, which I call the traditional interior design service. Essentially, it revolves around selling your designs to make a profit by purchasing furniture and décor and then selling it back to your client (here in the UK, we refer to this as being the principal interior designer).

On the surface, it sounds like a solid plan. You invest £100K worth of furniture and secure a 40-60% cut, translating to an average of £50,000 every few months. However, let’s face reality: how many startup interior designers actually land projects with furniture budgets of £100K? The honest answer is close to none.

Relying solely on markups to price your interior design services at startup won't cut it. You'll never see the volume of projects required to hit that elusive £100K mark.

Sure, you might reach a turnover of £100K because you’re depositing that money into your account, but that’s precisely why this approach is a recipe for disaster. The tax authorities still use turnover to determine your tax bracket, so even if you’ve only pocketed $20,000 from that £100K, you’ll still be taxed at a higher rate than you should have. It’s a classic case of getting hit with a higher tax bracket because the tax department assumes you’ve made more than you have. The purchasing business setup only works for an established interior design business, not startups!

This situation makes interior designers feel even more financially desperate, making them appear untrustworthy. They scramble to recoup some of the money they’ve earned because their pricing strategy is tailored for a traditional service that relies on larger projects to succeed. It’s no surprise that our industry is plagued with a reputation problem. Also, most designers unknowingly perpetuate this problem because they’ve been taught these methods by their colleges or universities, blindly trusting an outdated system without realising the issues.

4 | You're Focussing On Money In Your Interior Design Business Rather Than On Clients

Setting that £100K goal may be fixating too much on the money and losing sight of your clients in the process. Balancing your interior design business means considering both financial goals and client relationships.

Interior design is an incredibly personal service, and if you’re perceived as solely driven by financial gain, it can tarnish your reputation. It also has a knock-on effect and can hurt the reputation of our industry because it reinforces the stereotype of designers overcharging clients with hefty markups on furniture, portraying us as solely profit-driven and willing to sacrifice client trust for monetary goals.

To avoid this trap, I emphasise finding the equilibrium between financial success and client satisfaction. My mentorship program focuses on creating profitable and marketable services tailored to a specific niche and target clientele. We then ensure that our offerings are both financially viable and ethically sound. By shifting our focus from chasing a monetary figure to setting achievable financial goals aligned with our values, we eliminate the stress and desperation from our daily routines.

It’s all about consistency and following through with our well-thought-out marketing and business plans. It’s more straightforward than it sounds, and the results speak for themselves (if you haven’t seen our student video reviews, you can check them out here: Interior Design Course Reviews )

5 | The Additional Effort Isn't Worth It

When starting out in your interior design business, you’re filled with boundless energy and determination to make it a success. However, therein lies the problem. Instead of focusing on exactly what you need to do to succeed in interior design, you find yourself fixated on reaching an arbitrary financial goal that might not actually be worth it.

I speak from firsthand experience as someone who worked tirelessly, day in and day out, chasing after that extra £10K in my pocket, only to realise that easing off the pressure could have propelled me towards my goals much sooner, with greater peace of mind and far less stress.

From earning below £84K to surpassing £350K, I’ve gained firsthand insight into the types of projects, clients, knowledge, resources, and business setups required to achieve these milestones, and I wholeheartedly agree with my accountant’s advice that the additional stress incurred from striving for £100K before you’re ready outweighs the benefits.

I’d much rather enjoy my projects and my business, living comfortably in my first few years of entrepreneurship, ensuring that I’ve established solid foundations before aiming for higher income thresholds. Pursuing £100K often entails significant systems, time, effort, and resources that may not yield proportionate results compared to aiming for a slightly lower target that significantly benefits your quality of life!

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Conclusion | Why 100K Is A Bad Income Goal For Your Interior Design Business

Having experienced my fair share of 90-hour work weeks over the years, I can say it’s possible to work smarter, not harder, in your interior design business. While it’s an incredibly rewarding and lucrative field, resorting to underhanded tactics or burning the midnight oil excessively isn’t necessary to thrive.

It’s easy to fall into the trap of comparing ourselves to the industry’s Shay McGees and Athena Calderone, who seemingly effortlessly climb to multi-millionaire status. The fear of not measuring up or falling short often makes us fixate on the seemingly magical £100,000 figure, believing that if they can achieve it, so can we.

Now, don’t get me wrong, everyone’s journey is different, but the reality is, for most interior designers in their startup years of business, setting £100K as a monetary goal is a big mistake. Instead of chasing after shiny objects, the focus should be on aligning your broader business objectives with your financial goals.

So, stand firm the next time you see that tempting £100K promise. Stay committed to your personal goals, set with intention, and you’ll undoubtedly reach them sooner than you think!

Jo Chrobak

Jo Chrobak

Jo Chrobak is an architectural and interior designer and mentor at the Interior Designer’s Business School that trains interior designers to set up professional and successful interior design businesses and gain experience working on real projects. She is trained in architecture, interiors, business and life coaching and runs her architectural and interior design studio in London UK.
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