The world of interior decorating, with its blend of creativity and practicality, requires an initial investment ranging from $2,000 to over $10,000, covering training, equipment, and marketing expenses. In this guide, we’ll explore the essential skills needed to thrive in this industry, including a keen artistic eye, up-to-date knowledge of design trends, business management abilities, and strong communication capabilities.

The demand for interior decorators remains steady, with opportunities spanning both residential and commercial markets, and an average profit margin ranging from 10% to 60%. However, the challenges are real, from staying on top of the ever-evolving design trends to managing client expectations and balancing creativity with functionality. Let’s discuss the steps to build your dream interior decorating business.

Considerations Before Starting an Interior Decorating Business

Initial InvestmentEstimated startup costs can range from $2,000 to $10,000+ for training, equipment, and marketing.
Skills RequiredArtistic eye, knowledge of design trends, business management skills, and strong communication.
DemandSteady demand, with opportunities in both residential and commercial markets.
LocationHome-based or small office location, preferably close to clients and suppliers.
HoursFlexible hours, but may include evenings and weekends to meet client needs.
Permits and LicensesBusiness license and design certification, depending on the location and services offered.
Profit MarginAverage profit margins range from 10% to 60%, based on the services offered and client base.
ChallengesStaying updated with design trends, managing client expectations, and balancing creativity with practicality.

Benefits of Opening an Interior Decorating Business

Owning your own business lets you set your schedule, choose your clients, and build the professional community and life you desire. And, as a bonus, there are no educational requirements for interior design. However, you may benefit from some of the higher-education opportunities in this field, and a few states do require general licensing for working in commercial spaces. You can get started with your interior decorating business by following these steps.

1. Create a business plan

Writing a business plan is your opportunity to put your dream on paper, figure out exactly how this adventure could play out successfully, and avoid common, costly business mistakes many small businesses make. Here are some pointers to write your small business plan.

  • Describe your business: Why are you creating it? What problem or issue does your interior decorator business address? 
  • Set SMART goals (specific, measurable, attainable, realistic, and timely): It’s vital to have a clear vision for your business. By setting manageable goals, you give yourself a target to aim for in the early days of your company.
  • Consider what could go wrong and how you’ll manage it: Do you have a plan for handling bad Yelp reviews or an unhappy design client?
  • List the design projects and services you’ll offer: Home decor? Home staging? Both and more? Research what particular training and certifications you may need, like the one offered by the National Council for Interior Design Qualification (NCIDQ).
  • Identify your target market, as well as your ideal client: Do they live in upscale downtown townhouses, small apartments, or country farmhouses?
  • Describe your team: Include other decorators, and consider vendor relationships. Don’t forget your attorney, accountant, and bookkeeper. 
  • Choose a pricing strategy: Will you charge a flat fee? By the square foot? A percentage of the entire project cost? Time-based fee? 
  • Lay out your interior design business costs.
  • Create a services contract: This should clearly outline what’s expected of both you and your new client. 

2. Choose a business structure

You must register your business with the IRS if you choose an incorporated structure, such as a limited liability company (LLC) or corporation. Many design startups are either sole proprietorships or LLCs. Choose the structure with the best legal and tax setup for your situation. 

Since you’ll likely be in other people’s spaces and spending money on their behalf, the liability protection of an LLC is worth considering. Housing your business in an LLC structure shields your personal assets from business liability (if your business is sued, creditors can’t come after your personal bank accounts, house, car, etc.). It also prevents the double taxation that many corporations experience, in which the same money is taxed both on the corporate level and the individual level.

You can form an LLC online. Research what business licenses you may need, too. Also, remember that some states have general registration requirements to work unsupervised in commercial spaces.

3. Name your business

Your business name should be memorable, unique, and reflect your brand. Check to ensure the website domain and social media profiles are available for your business name. You don’t want anyone confusing your business with another one with a similar name, which could cost you clients and bring on legal repercussions. 

Be as creative as you’d like, and don’t rush. Make a shortlist, and live with the names in your head for a few days. What resonates? Some interior decoration businesses choose a creative doing business as (DBA) name for client-facing materials like websites and social media.

4. Register your business and open financial accounts

Using the structure you selected (LLC, corporation, etc.), register your interior design firm with state and local agencies. Get an employer identification number (EIN) from the IRS. You’ll need an EIN and business registration documents when you open bank accounts. Don’t mix personal banking with business finances, as this “pierces the corporate veil” and can impact your liability protection. In other words, your creditors might be able to come after your personal assets if you mix your personal and business banking.

Check with your county and municipality to see if there are additional licensing requirements for interior designers. Finally, consult local insurance agents to determine what type(s) of general liability insurance are best for your interior decorating business.

5. Determine your business costs

What will it cost to start your interior design business? It can be helpful to think of costs in terms of one-time and ongoing expenses.

One-time expenses and startup costs include furniture, computer equipment, tools of the trade, logo design, and business registration fees. It can also include the service fees for a business registration service if you choose to use one. Consider what’s truly necessary right now and what could wait until the business can afford it.

Ongoing expenses could be your salary, taxes, consultant fees, and office rent. Factor in skills and relationship development costs, as those will be key to achieving ongoing success. This means travel to trade shows and meetings, meals, classes, and thank-you gifts. 

It can be tempting to take everything on yourself to keep costs low, but consider the value of your time. “The design industry is a very specific industry when it comes to fees and commissions,” Ellie Cullman of Cullman & Kravis told Architectural Digest, “so I would recommend that, from the beginning, you should bring on board an attorney and an accountant who has knowledge of the design industry.”

Cullman also recommends hiring a bookkeeper to handle the paperwork. Bookkeeping can be a very tedious process. You probably won’t want to waste time that would be better spent shopping for new clients.

How do you fund your startup costs?

Check out these forms of government assistance for small business owners. Loan programs from the Small Business Administration (SBA) may be available at your bank, or a personal loan could make sense.

Think about family and friends, too. They may be willing to loan or invest to help get your interior decorating business off the ground, but consider the impact on these relationships if things go wrong. Business credit cards are an option as well, just be cautious you don’t run up a big debt with no payback plan, as the interest costs can be astronomical.

6. Purchase equipment for your interior decorating business

Much of your up-front spending will create the look and ecosystem for the business. It’ll set you up both virtually and in real life and equip you to provide the services you promise.

To create your business brand, a logo and website are crucial. If you can’t design them yourself, hire a professional. Business cards, letterhead, and thank-you notes will be needed as well.

Also, create an office space that reflects your interior decorating business brand. Paint, lighting, furniture, rugs, desks, etc. — consider this your first job for your new business, whether you’re setting up shop in a coworking space or a home office. 

To provide the services you promise, you’ll need a computer and a good printer, along with interior design software that helps communicate your vision to the client. Other tools of the trade include measuring tape, paint swatches, a color wheel, a camera, fabric samples, and more.

7. Market your interior decorating business

In addition to your website, which is important to optimize for search engines, social media plays a major part in marketing your interior decorating business. It gives you an opportunity to share visuals related to all your design work and even share free design tips to attract potential clients. Be consistent in both your timing and look across Twitter, Facebook, Pinterest, Instagram, LinkedIn, and whatever other social media sites you use. 

Also, register with Google Business Profiles to take advantage of its marketing opportunities and get included in local business and telephone directories. Offline, attend networking events, join local business groups like the Chamber of Commerce, and hand out business cards liberally to market your small business. Consider providing services free to a charity, which raises your visibility in the community.

Bottom Line

Starting an interior decorating business can be challenging. However, with hard work, talent, and dedication to relationship-building, designers with talent can find success in this industry.

Startup costs can be low, too. And while certifications and higher education are available, they aren’t required in most states. Best of all, you get to be creative all the time and get paid for it. If you’re ready to start your business today, we’ll form your company for just $0 + state fee.

FAQs About Starting an Interior Decorating Business

  • Consider formation fees, franchise taxes, the legal and court system, investor relations, and the tax structure of states when determining the location for your business. For the vast majority of entrepreneurs, it’s easiest to simply form an LLC or corporation in your interior design company’s home state.

  • It certainly can be if you have a well thought-out business plan and execute it successfully. The interior design industry was worth $25.5 billion in 2022 in the U.S. alone.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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