How to Make Sound Financial Decisions as an Interior Design Business Owner
©️ Dakota Design Company 2017-2026 | All rights reserved. This content may not be reproduced, distributed, or used without permission.
Each year, we compile insights and tips from interior design industry experts to help make the year ahead more seamless and profitable. We gather these contributions into our annual playbook, and in this blog, we’re sharing tips from a CPA and accounting professionals at CVW Accounting. CVW Accounting provides interior designers with premium quality services and personalized care to help you make sound financial decisions.
WRITTEN BY CVW ACCOUNTING
The first step to making 2026 your most profitable year is to create a strategic plan. A strategic plan is a roadmap for your company — it should be innovative and forward-looking, with measurable goals and a clearly defined mission and vision. It should also be specific and thorough to help identify the company’s strengths to build on, as well as its weaknesses to correct or prevent.
A strategic plan is not a one-time document, but an ongoing process that requires continuous adjustments as the business changes and grows. It’s important to be proactive and pivot when new challenges and opportunities present themselves, rather than simply reacting — or worse, becoming stagnant.
In an age of Artificial Intelligence (AI), it’s crucial to embrace change and integrate AI into your business. Find specific areas where AI can add value, such as automating tasks, analyzing data, or improving client experiences.
Other key areas where you can add value include offering new or improved services and products, adjusting prices, exploring new demographics, utilizing new technology, streamlining workflows, and enhancing employee wellness.
With any business, it’s important to know and target your ideal clients. Ideal clients are generally quick decision-makers, loyal, place high value on your services, and align with your overall mission and vision. By identifying your ideal client, you can tailor your products and services to better meet their needs — increasing client retention and referrals.
It’s equally important to build and retain a strong team. While there may be an initial investment to attract top talent, it’s more effective and profitable to invest in your team than to deal with turnover. By creating a positive work environment and offering employee incentives and growth opportunities, you’ll retain high-performing employees who increase efficiency and profitability.
Conduct a Financial Health Check.
The second step to making 2026 your most profitable year is to conduct a financial health check of your business. A good indicator of the future is the past, and a thorough review of your past financial performance will help identify strengths and weaknesses to build on. The goal is to maximize revenue and control costs while maintaining a healthy financial position.
Financial reports like the Balance Sheet, Income Statement, and Cash Flow Statement provide valuable information about the company’s profitability, financial stability, liquidity, solvency, and growth potential — all of which support key decision-making in the future.
All businesses, regardless of size, should set clear financial goals through budgeting and cash flow forecasting. A budget is a long-term financial roadmap with targets that project future revenue and expenses (resulting in future profit). Cash flow forecasting, on the other hand, helps ensure the company has sufficient funds coming in to meet its obligations in real time. Both reports help identify the financial health of the company — which is especially important in the interior design industry, where it’s possible to appear profitable and still run out of cash (or vice versa).
For example, let’s say an interior designer collects a 100% deposit on a project with 5% product margins. The cash in the bank may temporarily appear strong due to the deposit collected; however, because of the low margins, the company will eventually struggle to pay its bills and sustain itself long term.
Focus on Operational Efficiency.
The third step to making 2026 your most profitable year is to focus on your company’s operational efficiency. The goal is to maximize output while minimizing input — increasing productivity and improving quality while using minimal resources (in other words, “do more with less”).
Key areas to focus on include:
Streamline workflows (simplify, create efficiencies, automate repetitive tasks)
Minimize waste and nonessential processes that don’t add value
Identify and mitigate risk
Invest in and leverage technology (utilize AI, improve communication, enhance processes)
Invest in employees (training, development, growth opportunities)
Retain high-performing team members (reduce turnover)
Implement cost-effective strategies and leverage supplier relationships
Have an action plan in place to handle and minimize disruptions (leaves of absence, strikes, etc.)
Partner with professionals in complementary areas of expertise
Want more insights like this from other pros in the interior design industry so you can fine tune every aspect of your business?
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