In his timeless book “The E-Myth”, author Michael Gerber identifies the #1 handicap of small businesses – lack of repeatable business systems.
In this episode of the Business of Architecture, we pick up the second half of my interview with designer Kimberley Seldon where she tells us about the business systems she uses to run a successful design-build practice.
Kimberley Seldon is the founder of Business of Design, an online venue for designers, decorators, stagers, and stylists to learn about the business side of their practice.
Kimberley is also a recognized personality both in the TV and publishing world. In addition to having hosted three television series, she appears frequently as a design expert on Cityline. She's also the Design Editor for Chatelaine, and the Editor in Chief of Dabble Magazine.
In this episode you'll discover:
- How to be exponentially more efficient through the use of business systems
- The psychology behind raising your rates – it's not what you may think
- And 3 fail-safe tips for getting published in the magazine of your choice
This interview is on iTunes. Subscribe above, and be a hero! If you know another architect who would benefit from watching this video, share away using the social share buttons.
Interview Transcript and Members Only Resources:
Enoch: Welcome back, Architect Nation. I am your host, Enoch Bartlett Sears. This is the show where we share tips and strategies for running a fulfilling, flexible, and profitable architecture practice. As successful architect-developer, Jonathan Segal, says about the golden rule: “He who has the gold makes the rules.”
Now, I make no excuses for wanting to help you make more money because I truly feel that with that fat wallet in your back pocket, you’ll be empowered to shape the world through design the way that you want to shape it, the way that you started out, you know, those dreams you had in design school/architecture school – bring those to fruition with a flexible, fun, and fulfilling practice.
I want to thank quickly those of you who joined us for the Business of Architecture Summit last month. We’ve got some amazing feedback. Here is just a quick quote from Seattle architect Cary Westerbeck I want to share with you. He says, “After attending every presentation of the Business of Architecture Summit the last two days, I can honestly say that I’m brimming with so much useful, new information, I need to take stock and figure out what to implement first.
Each topic was so informative and on point for where I’m at in my practice that I felt an urgency to go apply the principles immediately. The presenters have been absolutely top shelf and are masters on their topics. They’ve shared hard-won industry information that would have taken me a lifetime to learn on my own. I can already see that attending the Business of Architecture Summit will be one of the most important things I do for my practice this year if not this decade.”
Thank you very much, Cary, for that.
I want to encourage those of you who are listening out there, whether you are planning on starting up your firm in the future or whether you currently have a firm, the sessions that were presented at the Business of Architecture Summit are essential. We had a lot of architects on there who have younger firms, and we also had a lot of architects who are more experienced and have been doing this for a long time. Each one of said that it was just fabulous and they got a lot out of it.
So, I encourage you to head on over. It’s a very minimal investment for you to get some of the most cutting-edge business information for your firm. You can pick up the recorded sessions at http://BusinessOfArchitecture.com/Summit.
Now, last week, we spoke with Kimberley Seldon. Kimberley Seldon is the leader of an award-winning interior design-build firm studio with offices in both Toronto and Los Angeles. I brought her on because she runs the organization The Business of Design, which is very similar to the Business of Architecture except it’s tailored for interior decorators, designers, and stagers.
Now, in addition to running a successful design-build firm, Kimberley is also a very successful business woman and thought leader. Last week, she shared the lessons that she’s learned about running a successful business.
So, today, we continue our conversation and talk a little bit more about what it means to run a successful business in the field of design.
Today’s show is underwritten with generous support from BQE Software, the developers of ArchiOffice. For over ten years, architects have relied on ArchiOffice to empower their office and empower themselves. Go check it out at http://www.ArchiOffice.com.
So, what came first? Your first start getting in to T.V., when did you move in to the publishing and broadcast sphere?
Kimberley: When I was living in Los Angeles, I worked at ABC behind the scenes, in the production. Then, I moved to Toronto and ended up in television again. Got, kind of, sick of the television world, decided to go to Interior Design school.
When I graduated, I got really lucky and somebody just asked me if I would be a guest on a T.V. show. It was easy and it was fun. So, that all happened, and that was wonderful.
Then, simultaneously, I’m trying to grow my design business. So, here I have the status of “Expert” in the public eye. I have my phone ringing off the hook, lots of clients, but I’m failing really miserably on delivering them a final, perfect, completed project.
I didn’t want to give up on interior design, but as I said, I did it about ten years, and I got to the point where I thought I may have to quit because I just don’t know what else to do. You couldn’t want to please your customers more than I did. I had nice customers, but I drove them crazy or they drove me crazy, I don’t know.
So, really when I hired this business mentor, it was really a last ditch effort. I thought, I’m going to give this a few months and see what happens. Really, what happened was she pushed me to consider the possibility that if I would start over, if I would, in other words, throw out everything I thought I knew about business and rebuild my business with a new goal, that it was possible, maybe, just maybe, I could create something that was worthwhile and would provide clients with an experience beyond what they’re getting from most interior design professionals.
Enoch: If you’re going to tell someone else, you know, “This is where you need to start.” When you rebuild your business like that, where are they starting at?
Kimberley: Well, you have to determine a reasonable hourly fee. You have to start developing systems. I thought, I really thought on the systems thing. I thought, “No, no, no. I’m creative. Every job is different, every budget is different, every client is different, and I don’t want to deal with systems.”
Then, I realized, you know, after hitting my head against the wall one too many times, that systems would actually allow me to be more creative because they would manage the day to day minutiae of running the business in a way that I would never be able to manage without them. I wouldn’t be caught up in all those tasks that are so time-consuming without a guide book. I could go out in to the world and do what I’m good at, and then take those choices and run them through the system. They would then run through the systems, just like at Starbucks, so I get the same, you know, outcome every, single time.
It was to the point where I didn’t even know if I wanted people who knew me to hire me because what if it ended badly? Today, I can work for friends, I can work for family, and I charge them exactly what I charge people I don’t know, and it works really well. So, I don’t know, it’s been a plus.
Enoch: Have you found that there is a, sort of, a lack of confidence of raising rates because, maybe, people feel that, “I’m going to lose out on business, they’re going to go with someone else?”
Kimberley: Absolutely. I always tell them the story of… Years ago there was a bad movie of the week that was about Martha Stewart who is like, you know, an icon in the world of design, of course. She’s wonderful. It was starring Cybill Shepherd. There was a scene where Martha had made these pies, and she was selling them in a Connecticut strip mall.
All day long Martha is just sitting there trying to sell her pies. She has a big sign that says, “Pies $5,” and nobody is buying her pies. They showed time-lapse photography of the day passes, nobody buys a pie. Of course, we know she’s Martha Stewart, but nobody knew her then.
So, she rips up her sign in frustration, and I think, and a lot of people think, “Oh, she’s going to write “Pies: 2 for one,” or “2 for $5.” No. She writes, “Pies: $20.” Then, they show a little line that begins and some people are curious. “I wonder what a $20 pie is like,” they’re thinking to themselves, and they started buying her pies.
I thought, “That is a powerful…” A bad movie of the week became, kind of, a call to arms for me. I realized, like, every time you lower your rate, you’re not increasing a desire for what you have to offer. You’re actually just saying you’re not that good. You’re really not that good, so they should probably hire somebody else. Everybody would prefer… This is, you know, fifteen years ago, so $20 pie was something that was unheard of I guess.
So, that’s what I try to tell them. Often, when business close down, the first line of defense is “I’ll just cut my fees.” Really, at a time when you’re going to have fewer customers, you’re going to cut your fees and make even less money? Not only that, but we all know that the good clients are paying for services. Really great clients will pay because they truly value the work that we do. Somebody who wants it done in twenty hours and for half the price is not a customer you want, really. It’s really not.
Enoch: What do you tell designers about developing more work whether it’s the people who you’re working with in your community?
Kimberley: Well, I can tell you the number one way to get work is to finish the job you’re doing and make them happy, and make sure that they refer you to somebody.
You’ve got to get published. I think that publishing can help a lot. We just recently had a big spread in House and Home Magazine, which was awesome. It doesn’t mean the phone begins the room off the hook that week. It really doesn’t, but two years later somebody will say, “I remember I saw that spread in House and Home, and I’m finally calling you.” So, you just want to always make sure you’re getting these publishing gigs as you go along.
Enoch: What’s the secret to getting published, Kimberley?
Kimberley: The secret is don’t give up. I was the Decorating Editor of Style at Home Magazine for eighteen years, and it was amazing to me. We would get a project via email and I would never hear from them again. We were so busy, we’ve got projects all the time, and we just didn’t have time to go through them all. That’s one thing.
The second thing is: People would often pitch a story to a magazine that it’s not right for. So, for example, at Style at Home Magazine, we didn’t do before and afters. I would say, 50% of the pitches we got were before and afters. We don’t do before and afters. They’re not paying attention to what the magazine looks like.
Architectural Digest will photograph things at night, but nobody else does. So, if you have a night shoot, it may look artsy, but it’s not going in to Elle Décor, let’s say. So, I think, it is: Know the publication.
Then, the best trick, I would say, for getting in to a magazine is hire a photographer who does a lot of work for that magazine because the photographer will have the ear of the editors. When they’re stuck looking for a bungalow or a ranch house, the photographer would say, “Oh, I just something with this architect in Fresno. It might be perfect for you.” So, spend the money on good quality photography and look for the photographers who the magazines use – that’s really the very best tip there is.
Enoch: Excellent. Kimberley, going back to your bio here… There are a number of businesses that you have your fingers in a number of commitments, right?
You talked about systems earlier, about the idea that systems help us run a better business. What would you say is the key to being able to juggle your various interests? I’m just going to mention, for our listeners, again, that you do have a design-build, an interior design-build studio, with two offices, you are the Editor-in-Chief of Dabble Magazine, as well as being a host of a number of T.V. series.
Kimberley: Well, it sounds silly, but, really, I was not able to keep staff. I certainly was not able to have staffs who were satisfied until I had systems, because without that they never knew how to make the boss happy. They never knew when they hit the target. They were always coming close to the target, but not quite there. A shifting set of criteria for success is no way to run a business.
So, I found once we started getting systems, it could be everything from how you answer the phone to… We have a policy, for example, that every email is returned within 24 hours of a business day. That does not mean we have an answer. It means that we acknowledge that we have received the email and the question you’re asking us is going to take a few days to answer, but we received it.
One of the complaints I’ve always heard from clients is they never knew when the designer or the renovator, whatever, was going to get back to them. “I never knew if they were going to call me on a Tuesday, or a Friday, or on the weekend, or whatever.” We thought, “No, we can solve that problem.” We can just have a very strict… You get back to them the same day and let them know by when they’ll have an answer.
I think, for me, having systems, very strict policies around how things work makes it really easy to come and help me. I can hire temporary help because you’ll say, “Here’s how we answer the phone. This is the goal. Here’s how you sign them up,” or whatever it is.
Enoch: Excellent. It sounds like what you’re saying is that the systems themselves are what helped you to be able to manage these businesses as a business.
Kimberley: Oh, my gosh. Yeah.
Enoch: As opposed to a hobby or something that has a lot of tentacles.
Kimberley: Well, that’s it. I wonder about architects because most interior design professionals work for themselves – the vast majority work for themselves. I think that there is this idea that you’re all alone, and you’re sort of wedged between the client and the suppliers, and you never have a safe spot to land.
There is this idea that you’re just little old you. In fact, even if you work by yourself, I always tell people I think of my contract as my partner because my contract has all the rules for working with me. It has all my corporate policies.
When a client says, for example, “Oh, you know, we don’t like retainers,” you know, “We trust people. We’re really nice and we’re going to pay our bills on time.” The nice me, little old me who works by myself might go, “Oh, okay. You seem nice. That’s alright. We’ll just skip the retainer this time.” Instead, I look to my contract and I go, “Hmm… My contract says, no, absolutely not. Must have a retainer or we can’t start.” So, even if you work by yourself, you’ve got to get to a place where you’re not by yourself. Something like Business of Architecture, Business of Design are terrific allies so that you’re not alone.
Enoch: Absolutely. Just on that note, I would like to encourage all of our listeners to go check out Business of Design. Ms. Seldon has a lot of wonderful videos on there. She actually has a conference that they run every year. Great, great resource.
Kimberley: Thank you.
Enoch: A lot of the lessons are equally applicable to architects.
Kimberley: It’s so fun. I know. I was tootling around your site and I’m like, “This is awesome. I can’t wait to get to know all these people.”
Hey, Architect Nation, it is great to have you listening in today. I want to remind you that this episode of Business of Architecture is sponsored by BQE Software, the developers of ArchiOffice. ArchiOffice has been powering architecture firms for over ten years, and helping them to be more productive and profitable, which empowers architects to do what you like to do and what you got in this business for in the first place: create great architecture and spaces. Go check it out at http://www.ArchiOffice.com.
Now, back to our show.
Enoch: Kimberley, so a couple of weeks ago I had an architect from Chicago. Her name is Katherine Darnstadt. She was saying, “You know what? As a woman in the profession, it’s challenging, specially as an architect.” She gave a little anecdotal story about how she went to the Building Department in Chicago with her plans, and she put them on the counter, and she said, “Hey, listen, we need to get these processed.” The plan checker looked at her and said, “Well, I have a question, but I need to speak to the architect.”
Kimberley: Oh, my gosh. That’s horrifying in this age.
Enoch: I think that’s probably representative of a lot of perceptions that women get in the workplace, but also specially architects. So, what’s been your personal experience as a woman, as a professional just in the world in general, but also as a designer?
Kimberley: Well, it’s interesting. Your body of architects is made up of 80% men, where our body of designers is 80% women, so together, we’re perfect. What we deal with a lot, in a similar way, is just that they patronize. “Oh, you’re just going to pick color.” “Oh, no. Actually, we need the toilet…”
We were on a job, for example, where the client had a child who had a very serious disability and was in a wheelchair, so we made some changes based on barrier free. We have to deal with the contractor constantly saying, “I don’t need your help with that stuff. I just need you to pick the pillows,” but he was about to put the toilet in the wrong place. So, we have to just constantly come in and defend ourselves, and defend our expertise.
It’s a little bit better as you get older. I have got young, junior designers who started working with me, and they really struggle to get the trades and the contractors on board and part of their team. Maybe that’s the case of any profession, you know, in fact.
Enoch: Do you have any words of advice for young women who are emerging in the profession to get over that? You just mentioned there’s a little bit of a struggle at the beginning to, kind of, establish yourself with some of the trades. These are male-dominated industries a lot of times.
Kimberley: Yeah. I’ll tell you when I first launched in to the business and I was so young, I always thought I had to know everything. I probably didn’t ask for help as often as I should. Now, I know there’s absolutely nothing wrong with- I don’t have to know everything. I’m not an electrician. If a client asks me a question about electrical, I don’t have to know it or even want to know, but I know who to ask.
So, I think, there might be a little bit of that where you just have to put yourself out there and let them know that you maybe don’t know everything, but you’re really good at this one part of the project. That’s the part that you’re going to manage, and you could use their assistance, and you could use their help.
Then, I think, you do have to just hold your ground in a way, almost. You just have to step up and hold your ground. Again, it goes back to you have got to be good at business because, in my experience, it’s an industry of finger-pointing: “It’s his fault,” “It’s her fault,” “It’s their fault,” “She told me,” “They told me.” So, we’re really good at just making sure that every face to face discussion is followed up with an email. Here’s what was said, here’s what we had agreed, so that we always have a paper trail to follow the decision-making process for the clients and for the contractors.
Enoch: A paper trail never hurts, right?
Kimberley: Yeah, exactly.
Enoch: Kimberley, what’s been your biggest business failure that you’ve experienced and how did you overcome it?
Kimberley: Well, I guess, disappointing clients is very painful. Very often, clients are nice. They don’t say, “I hate you. Get out. I wish you were dead.” They say things like, “Oh, we love everything you’ve done, and we’re just going to finish it ourselves.” I, kind of, joke and refer to that as Canadian fired. Canadian fired is, “We really love you, but we’re just going to stop now and we’ll just finish it ourselves.” That’s Canadian fired. I’d tell you, that was a really big challenge.
Just getting over this idea that “I’m not good at business” or “business is not something I want to do.” I didn’t realize how much fun business could be until somebody explained to me how it worked and what my profit and loss statement looked like, and how I could track that on a monthly basis and see how I was doing. All that kind of stuff seemed onerous and frightening to me, but in fact, it’s, kind of, fun and lovely, and it’s an opportunity to just sit in your desk for a day. Often, designers, as you know, are out on the job site or are in a store sourcing or whatever. So, I now am at the point where I quite like the business side of things, but it definitely took a little encouragement.
Enoch: Yeah. Were there any inflection points… I think that, you know, Malcolm Gladwell talks about the tipping point – the point where something just really takes off. If you look back at your business, were there any points where you did something, you implemented something, and you just experienced this really incremental growth instead of the steady plod?
Kimberley: Yeah. There’s a big one. I’ll never forget it. As I said, when I first started, we used to do the floor plan, and we come back later showing the elevations, and we come back later and show them the sofas and the drapes. This process went on for weeks, and weeks, and weeks.
Part of my mission to deliver on time and on budget was to stop that back and forth process that clients don’t like. To be able to give them a guaranteed budget, I had to know the scope of work, and I had to know the entire scope of work. So, our first five steps are about developing the scope of work, making every design decision there is, getting prices on everything, and then presenting everything to the client at once.
I remember the first time I did it I was terrified. First of all, I thought when the client sees that it’s going to cost $300,000 to do her house, she’s going to throw me out of her house. So, my knees were knocking and I was terrified. But, we did the presentation, it was very organized, it was very orderly, everything was there. She said, “Is there going to be any more money you need from me?” I said, “I’m never going to ask you for another penny.” She said, “Let me get my checkbook.” When she left the room, I was like, “Oh, my God!”
This is so different because I used to be asking for money all the time. “Okay. Now, can I order this?” “Now, can I order that?” You begin a negotiation over a hundred times during the course of the project where you’re going, “Yes, I need $72 more because,” blah, blah, blah. I thought, I didn’t like it and I know the clients hated it, so, for me, going to that turnkey presentation system dramatically improves how much I like my job, dramatically improved how much the clients liked working with me, and dramatically increased the bottom-line, for sure.
Enoch: I’m going to dig in to that a little bit, Kimberley. I know how difficult that is to have a fixed scope because a lot of times, it’s difficult specially if you don’t have the experience to know what’s going to happen, and how that’s going to work. Do you have any tips or pointers for being able to firm that up and having that turnkey presentation?
Kimberley: Well, we begin to develop the scope of work as Step 1. For us, we have Step 3, which is what we call trade day. We get every single trade we need to do every single task on the job in the house on the same day. We, sort of, stagger their appointments at a half-hour increments.
Then, it’s a discipline. It’s a muscle you have to work. I know, if the living room has to be done, I have to deal with the draperies and maybe the hardwood floor, and maybe the electrical has got to move, maybe there’s a popcorn ceiling that needs to come out, so I need somebody to come in and dispose of all that stuff. It’s just a matter of slowing down, and, I think, having the discipline to make every, single decision upfront. It’s hard when you’re used to thinking, “I’ll do that later,” “I’ll do that later.”
So, you know, I would love to be able to work with architects when they finish the overall structure of the house for us to say, “Now, here’s the layer that’s going to be furniture and drapes,” and all that kind of stuff, “Here’s where the T.V. goes,” all that kind of stuff, and then be able to present to the client all at once. Imagine how great it is. A beautiful home, architecturally speaking, is not complete. A beautiful home, from a design point of view, is not complete. They have to work together. I think they can handle sticker shock, just like when they go buy a car, but what they don’t like is being asked for money twenty-eight times.
Enoch: So, it sounds like there’s a lot of psychology from the designer’s perspective also. A lot of times, it’s a mind game.
Kimberley: Well, yeah. It’s more than that. I don’t want to be asked for money twenty-eight times. I wouldn’t want to go to a store to buy shoes and find out that they sold me the shoe but not the heel, so I’ve got to come back to get the heel, and then, I’ve got to come back to get the bow that’s on the shoe. I just want to buy a shoe. Like, how much for the damned shoe? The shoe might be expensive and I can make a decision. I want that shoe, that’s what it costs.
I find clients just don’t negotiate the same way when you present everything at once. They see their house and they’re like, “Oh, my God. This is actually going to get done.” At that point I tell them, “All you have to do is write a check.” Done. “All you have to do is write a check.”
Most of them, when they hire you, they’re serious. They have a project that they want done. You know what? The fact of the matter is our industry has a very bad reputation. You ask anybody on the street if they’ll hire any one of us (an architect, designer, contractor) and they give you a budget if it’s accurate. Every single person you meet will say, “No, they wanted more, and they wanted more, and they wanted more…” I just didn’t want to be part of that anymore.
Enoch: Well, right now, Kimberley, I know you’re in the middle of a book launch.
Enoch: Can you tell us about your book?
Kimberley: I have two books: “Business of Design” part 1 and part 2 – very imaginatively titled. The idea was the first book was all about what to charge and how to collect. It also has a contract that I use in my trades.
I actually have my trade sign a contract with me because I found that often we were chasing the trades. We need an electrician to give us a quote, and we were chasing him for three weeks after he’d been to the house to give us a quote. So, I work with my trades to create a contract that was fair to them, but fair to us.
It’s a contract that we blow up when we’re at the job site, so the client can see the rules of engagement, they can see what’s expected during the project. It’s got simple things in there. For example, for trades, we tell them that you might be at Mrs. Smith’s house, but I’m the client. I’m the person you have to make happy. I’m the person you take direction to. You can’t take any direction from Mrs. Smith.
They’re not used to that. The trades aren’t used to that. They’re used to getting a job from a decorator or designer, and then getting to be friendly with the home owner and saying, “Hey, we should add, you know, on the mudroom,” or whatever. We want to make sure that we’re on top of all these conversations because we know how much money the clients are putting out for the areas we’re working on already, and that’s going to be outside their budget, and you don’t want it to impact what’s coming down the road, etc. So, that’s book number one.
Then, about four years later, I guess, book number two came along. It’s our fifteen-step process. It’s all the systems we use from the first step to the last to run the project. It’s written like I talk. It’s very easy to read, and it’s very prescriptive. I don’t like theory. I go to too many conferences where it’s all blah, blah, blah theory, and that just doesn’t work for me. Tell me exactly what you do and I’ll try it. If it works, great. But, please tell me that, “Communication is key to your success,” because I don’t know what that means.
Enoch: Well, I’m sure that our clever and smart listeners will head over and pick these books up as soon as they can. Tell me where they would go to find them.
Kimberley: They can go to http://www.BusinessOfDesign.com. That’s where we prefer everybody goes. If they go to Amazon, they’re going to pay shipping and delivery charges. If they come through us, they won’t have to pay that.
There ought to be a Business of Architecture book that we can have as a companion and figure out a way to get our two communities to work more harmoniously together. I think that it would be great.
Enoch: Well agreed. Well agreed. I did want to tell all of our listeners that the community over at Business of Design is very inclusive. You’ll find that there are architects that participate in the events that Kimberley Seldon and Business of Design puts on. They have a bunch of CEU courses that you can learn about how to run a great design business. I’ve looked at them, they’re very high quality.
Kimberley, tell me a little bit about the resources that you have for any architects that may want to check out the business resources that you have on Business of Design.
Kimberley: Well, it’s funny. I never thought that architects would pop over to http://www.BusinessOfDesign.com. I had them on a pedestal. I thought, “Oh, they’re so lucky because clients just do whatever they tell them, and they never have to argue about fees…
Enoch: Oh, yes.
Kimberley: But, I really did have that thought. I was surprised when I started meeting architects who said, “Oh, no. we’re constantly getting our fees negotiated,” and “They want a flat fee before we even know what the scope of work is.” “They want it to be a $100,000, but it’s $300,000 worth of material.” So, a lot of our issues are exactly the same.
Certainly, for architects who also step in to decorating, obviously, any of the courses are really valuable. We do have some really terrific architects, and I’ve made an effort to connect them with other people, designers, and say, “Work together. If you need an architect, work together,” because sometimes the decorator doesn’t even know how to do AutoCAD. She’s got to have somebody do those plans for her. Why not have a partnership with an architect firm that could expand the business? If they see that you’re a decorator who’s got an architect that you work with, they might decide to build a cottage and hire you again. It’s a win for everybody.
Enoch: Absolute. That is something that we talk a lot about, Kimberley, is looking for allied professionals in terms of finding work, and forming those relationships and partnerships. Frankly, I’m a little shocked that you haven’t been approached by some high-caliber architects that want to collaborate with you.
Kimberley: I know. We are too, actually. It’s so funny. We always think it’s going to work out, but it, kind of, doesn’t. Anyway, we’re still open to it. We’ll see what happens. Maybe you’ll be the push we needed.
Enoch: Alright, Kimberley Seldon. Thank you for joining us on the Business of Architecture.
Kimberley: Oh, it was awesome to be here. Keep up the great work, and I hope to be at one of your events in the near future.