Profit Is A Choice

097: How to Build Supportive Relationships Within Your Design Business WITH KARA COX

On the podcast today is Kara Cox, of Kara Cox Interiors. I’ve just got to tell you this was such a fun and a delightful conversation. It was recorded in mid-April while we are kind of figuring out how to work around the COVID disruption, and how things are going to start back up. What I love so much is Kara’s open and inviting personality. She just draws you in and has that beautiful southern speech.    

Something that struck me in our conversation was the idea of how beautifully she was mentored and taken care of by another designer. This designer then also encouraged her to launch her own design firm. We don’t hear that very often, so listening to her share the story and sweet relationship was such an encouragement.

Kara goes on to talk about how she has worked really hard to figure out how she serves others; not only her staff and her clients, but her community. I think you will be encouraged. Hope you enjoy the podcast.

Topics Mentioned 

• Leadership

• Coaching and Mentoring 

• Service

• Change

Key Thoughts:

• Kara’s mentor, Lindsay Henderson, taught her what servant leadership meant: those who literally served their clients, their community, and also served their employees. Kara(09:52)

• The more we learn about ourselves, the more we learn about the people that we work with on a daily basis in our team, the better we can meet their needs and we can figure out how to motivate the individual. Kara (20:32)

• Hiring a business coach, Tobi Fairley, transformed the way Kara does her business. Kara (25:08)

• Running a transparent business with the one flat fee and explaining the benefit to the clients. Kara (31:36)

• Adapting and continuing to a new normal by trying to offer some different services. Kara (48:04)

• The minimum that you need to do to keep your family going to keep your business going. Michele (52:25)

Contact Michele:

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

Contact Kara:

• Facebook: Kara Cox Interiors

• Instagram: @karacoxinteriors

• Website: www.karacoxinteriors.com

References and Resources:

• The Designers' Inner Circle - Become a Member Today

• Think and Grow Rich by Napoleon Hill

096: 5 Indicators Your Interior Design Firm Profit is on Target WITH MICHELE WILLIAMS

On the podcast today we're going to learn how profitability directly impacts the sustainability of a company. This is acutely understood at a time like this in our world and economy. The higher the profits and the better the management of those resources – the more sustainable the firm is. The lower the profits, the less management of those funds and the less sustainable the company is. 

In this podcast episode, I am going to share with you five indicators that your design firm’s profit is on target. We will dig into why profitability matters and where to start managing it properly in your firm.    

Topics Mentioned: 

• Profit Margins  

• Debt   

• Cash Flow  

• Cash Reserve 

Key Thoughts:

• Know your profit margins.
• Know the current and future value of your ideal clients.
• Have a cash reserve.
• Have a plan to manage debt.
• Understand and employ a leveraging strategy.

• Profitability layer is instrumental as we build up and we build order and we build impact with the legacy. Michele (09:25) 

• By clearly defining the goals of how you spend money, you're going to be in a much better position to assist the company to live within its means. Michele (12:51)

• Profitability and the company allows for money to be allocated to the health and the sustainability of the company as a whole. Michele (17:09)  

• Leveraging in this situation simply means investing in something to gain a profit, which is greater than the investment. So if we're going to put money in we want to get more money out. Michele (21:24)

• As your business grows readdress your KPIs, look for new or different measurements to guide your current and future success. Michele (25:04)

Contact Michele:

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

 

References and Resources:

• The Designers' Inner Circle - Become a Member Today

• Financial Health Checkup 

• Financial Planning Made Simple 

• Aim with Intent Methodology 

• Understanding Your Financials and Master Your Profit 

• Fix This Next, Profit First,  by Mike Michalowicz

• E-Myth Revisited by Michael E. Gerber 

• All Roads Lead to Profit, Episode 004 with Mike Michalowicz

• Backward Financials for the Win, Episode 011 with Tracie Taylor

• How to Start Profit First with No Profit in Your Design Business, Episode 092 with Michele Williams

092: Managing a Design and Social Media Company WITH DARLA POWELL AND NATALIE GRAFE

On the podcast, today are Darla Powell and Natalie Grafe of Darla Powell Interiors and Wingnut Social. Together Natalie and Darla manage multiple businesses (design, podcast, social media, fire-fighting, and a family business.) We are going to discuss how they started these businesses, how they don’t do it alone and have delegated with a team approach, and how they schedule time to pull away from the business. We are also going to talk a little about social media, some of the changes that have been happening and how to get started if you have more time than money. Hope you enjoy the podcast.  

Topics Mentioned:

• Managing resources 
• Social Media 
• Consistency 
• Personal time 

Key Thoughts:

• You know, the first business that I started I didn't start with a plan. I didn't start with any plan at all. - Michele (10:39)

• I think that's one of the biggest things that I've learned being in business for myself, is that you cannot be rigid. - Michele (12:51)

• I absolutely, totally see Tic Tock taking over Instagram and some of the other ones in the in a few years. - Darla (17:00)

• You want to keep your brand voice consistent and you want to post consistently. You don't really want to go absent for a long time. - Darla (20:04)

• Even if you're a brand new designer, go decorate a corner of your house, do a couple of pictures that are your own…but not every single picture should be of somebody else's pics on your feed. - Michele (24:34)

• Natalie and I, right now, are working on our systems and processes and getting them to such a place where if we are gone for two weeks, we don't have to look at emails. - Darla (34:01)

• It's not that we would assume that every single person that is an interior design would all of a sudden go start a podcast or start a coaching company or a social media company, but I will say that has been one of the beautiful things for me being in this industry for 20 years. - Michele (40:32)

• Think about how much more money you will make as a rainmaker than sitting in front of your computer trying to figure out the latest change in whatever it is. - Darla (47:05)

Contact Michele

• Email: [email protected]
• Facebook: Scarlet Thread Consulting
• Instagram: @ScarletThreadATL

Contact Darla and Natalie

• Website: http://wingnutsocial.com/   
• Instagram: @wingnutsocial 
• Facebook: Wing Nut Social 

References and Resources:

• Clockwork by Mike Michalowicz
• The Designers' Inner Circle - Become a Member Today

094: 5 Signs Your Interior Design Sales Process is Working WITH MICHELE WILLIAMS

To really start a business, you need sales because sales are the lifeblood of a company. It doesn’t matter if you have an awesome idea or of your product and service is best in class if no one is buying. It is just that simple.    

In this podcast episode, I am going to share with you five signs that your interior design sales process is working. We will look at the metrics you need to consider as you determine the health of your business.  

 

Topics Mentioned: 

• Lifestyle  

• Prospecting  

• Conversion  

• Commitments

Key Thoughts:

• To really start a business, you need sales, because sales are the lifeblood of a company. It doesn't matter if you have an awesome idea or a great product or service, even if it's best in class if no one's buying, and it's just that simple. Michele (0:00)

• The business, while it is supposed to take care of the clients is ultimately to take care of the owner who's taking care of the risks. Michele (6:05) 

• Not paying the owner, or not paying the owner the equivalent of what the owner should make is a much smaller salary. And we call this entrepreneurial poverty. And that was what Profit First was written for, to get us out of entrepreneurial poverty. Michele (6:30) 

   

• Contact Michele

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

   

References and Resources:

• All Roads Lead to Profit, Episode 093 with Mike Michalowicz - Listen Today

• EP. 093 Fix This Next in Your Interior Design Business with Mike Michalowicz - Listen Today

On the podcast today we're going to discuss on how to figure out what your business is currently struggling with. Recognizing and prioritizing it based on data analysis instead of emotion. This will help us gain clarity, highlight our most basic and foundational needs, then build a more accurate needs hierarchy. By following this path, we will be able to overcome any inaction from confusion and choose the best course of action.     

Topics Mentioned: 

• Survival Trap  

• Business Hierarchy of Needs   

• Business Crisis  

• Block Control 

Key Thoughts:

• The biggest struggle that business owners have is knowing what their biggest challenge is because of the overwhelm. – Mike (2:56) 

• Identify what the business really needs and make a decision that is consistent with addressing that specific need - Mike (8:21) 

• Your business needs an adequate foundation to support the layers above it. - Mike (13:40) 

• It is very important to base our business decision on data instead of emotion. - Michele (22:46) 

• When you're feeling overwhelmed or paralyzed, start breaking down what you need to do to move forward. - Mike (36:30) 

Contact Michele

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

Contact Mike

• Website: www.mikemichalowicz.com

• Instagram: @mikemichalowicz

• Facebook: Mike Michalowicz Fan Page

• Twitter: @MikeMichalowicz

• LinkedIn: Mike Michalowicz

References and Resources:

• The Designers' Inner Circle - Become a Member Today

• Fix This Next, Pumpkin Plan, Surge, Clockwork, Toiletpaper Entrepreneur  by Mike Michalowicz

• How to Stop Worrying and Start Living by Dale Carnegie

• Hierarchy Assessment  

• The Cash Positions 

092: How to Start Profit First with No Profit  with Michele Williams

On the podcast today, we are going to tackle excuses that I hear sometimes. "I cannot do Profit First because I don't have enough profit. I'll get to that later when I am profitable." What if I told you that not doing PF before having profit could be the problem. Listen in today to learn how to save your profit before you have any.

Ok, Let's just get this out on the table early. I am a certified Profit First coach and have been since 2015. This method of managing your money works. I also have facilitated the Financial Peace education from Dave Ramsey. I serve creatives – like you – and my focus is to help you create and maintain profit in your company so that you can have a sustainable business. Let's talk about how to create a profit first strategy even if you don't yet have a penny of profit.

 

Topics Mentioned: 

•Working within constraints 

•Profitability mindset and habits 

•Building the business for the future 

•Strategic debt

Define Profit

To begin, let's define profit. Profit is the money that we set aside with intention, to make our businesses sustainable. This might be a slightly different definition from what you have learned in the past. Maybe you heard something along these lines: profit is what is left over after all the bills have been paid.

But this definition is inherently flawed. If we wait until all spending is done to recognize profit – then we are considering profit an afterthought to doing business. Yet, we all go into business with some idea of making a profit. If that is the case, why would we not plan for profit from the beginning and set it aside to protect it as the business is growing?

Have you ever heard of Parkinson's Law? This is the law that says work expands to fill the space available for completion. Money does the same. In simple terms, the more money we make the more we spend. In the discussion of time – let's say you have two weeks to get something done. In most cases, you will complete the work right before it is due. If you had two days, the same would hold true. If there are limits to our resources, we normally adapt and work within those constraints. 

By not limiting our expenses and letting profit be a left-over – we are setting ourselves up for disappointment. Because expenses tend to expand if not seriously controlled to gobble up any and all profits we have. Shiny objects – anyone?

So, going forward, we will consider profit as a percentage of our Real Revenue (or gross profit) that we want to preserve for our company's sustainability.

Keep in mind, as we discuss profit in a PF model, we are not talking net profit on your Income Statement. We are looking at company profit as separate from any owner's benefit, including salary and owner's draws. This profit is company sustainability. We will distribute it at given times, but it is meant to support the company, not just the owner.

Have a Profit Mindset

It is important to focus on profitability from the start. While our company's profit may not be as high as we want it to be when we begin, we do need to start with the mindset that it is important, will be made and saved.

I love what Dave Ramsey says, "We have to love saving more than spending."

Zig Ziglar put it like this, "If you do the things you need to do when you need to do them, then someday you can do the things you want to do when you want to do them."

Our mindset controls all that we do. I am not talking Pollyanna thinking, but seriously taking our thoughts captive and asking hard questions. Are these thoughts truthful? Am I setting myself up for success or failure, depending on my thoughts? Our actions stem from our belief systems – and they are not always in alignment with what we say we want.

Making a clear decision to make and save profit in a company is a huge first step. Then following through with action is what will ultimately create the success we are working for.

What do you believe about profits? What do you think you should do with profits? How much do you think is enough? All of your answers are guiding your decision making, even if you are not consciously aware of it.

Even before you earn your first dollar, you can decide what you believe about money.

Money is not good or bad. It is amoral. What we choose to do with money is where morality comes into play. I can tell you this. I cannot give away money I don't have. I cannot invest money I don't have. I cannot leave a legacy I don't have.

Decide early on to be profitable and to do what it takes in your business to make that happen. This may mean growing quickly or slowly. It may mean hiring or firing. It just means you have to be willing to take a long hard look and be intentional in your choices. Even when you are profitable at the level you desire; you are still working on your profitability mindset. Decisions come into play with efficiencies and competitors' advantages, which can reduce our profitability even if we change nothing. This work is never done. Start early and keep reviewing your mindsets around money and profits.

Create Profit Habits From the Beginning

Habits are so much easier to create with small amounts of something than when you have a windfall. Want to start a new 401k habit? It is easier to put in 3 or 6% than 15%. But if you choose to start with 3-6%, you can gradually increase to 15% or more without the shock. Starting profit saving behaviors when you begin your business is the same thing. Set up a framework of decision making and activity that allows for your current and future success.

How do we do that? I have my clients that are either new in their business or just starting to begin by allocating 1% of their Gross Profit each allocation period to company profit. Just 1%. Small amounts add up quickly. When we can do 1%, we try to stretch to 2% and so on. Just getting into the habit of moving money into the profit bank account at 1% works that profit saving muscle in our business. The more we do it, the stronger we get. The more excited we get – and we begin looking for ways to build up more and more profit while exceeding the product and service offerings. 

Even when we have debt to pay off, we use the profit account as a pass-through. This shows us clearly what could be profit if the payments were made to us instead of to debt reduction. And we are already in the habit of saving for profit when the debt goes away.

If we pay off debt without seeing it as spending our profit, then we can easily assume we never had that money and allow future expenses to eat it up. Going into a profit account then out to pay debt is clear, and a very direct correlation is made about what our money is being spent on.

Measure What Matters

You have probably heard it said that you get what you inspect, not what you expect. Make a plan to measure what matters – and profit matters. Dave Ramsey says, "You will either learn to manage money, or the lack of it will always manage you." 

There are two ways I love to manage money. The first is by creating a budget for my company. A created plan in advance of how my money will be spent to attain the goals I have set forth. Then I love each month to measure to that budget to see if I am on track to meet my goals. 

John Maxwell said, "A budget is simply telling your money where to go instead of wondering where it went."

Here is a good indicator that you don't know where your money went. Look at your P and L and see the net profit at the bottom. Recognize that money is not in your bank account or on your balance sheet and wonder where it is. That is an indicator that something is not being measured accurately.

Again, starting with smaller amounts of money and being clear on what it is allocated for and how it will be spent will help you stay in line – and in alignment with your values and goals – as sales increase and more money comes in to be managed.

Decide About Debt

Make a decision before you begin with regard to debt. Is this something you want to have in your company? How much is too much? What will you allow debt to be created for – and what is an immediate no? How will debt be managed?

It is easy, in our environment today, to take on more debt than we need to. We are offered loans and credit cards in the mail on a consistent basis, and these can easily be alluring if we have a dream but no current funds to make it a reality. Debt can work, but it has to be extremely strategic. Otherwise, it is a set of weights on our shoulders that keep us from moving forward. Debt can keep us from being able to react swiftly or nimbly. And remember this – it has to be paid back. It is not free money. Mike Michalowicz says this, "well-dressed poverty is still poverty." We must decide to consistently spend less than we make to stay out of debt.

Our company needs to be able to live within its means. Otherwise, debt will be our burden and will control our ability to grow with peace and ease going forward. 

To be truthful, implementing a money management strategy like Profit First is more about what you believe, followed by action to show those beliefs. Any new system or strategy can be difficult. But when thought about in advance and decision making is done prior to being in the heat of the moment, your way forward will be most clear.

I have built a business and worked hours upon hours to make no money. It is a terrible feeling. I have also planned for profit from the start and been much less stressed. And I like this way better.

No matter where you are right now – with an idea for a business or 30+ years in, you can move forward. If you are making tons of profit and don't know what to do with it – call me. If you know that there can be a better way – call me. I am telling you – It is never too early or too late to do business better! Start now. Don't wait. 

Decide today to manage your money, so the lack of it doesn't manage you. I am happy to assist. Because what seems simple is not always easy. Go to ScarletThreadConsulting.Com and sign up for a discovery call and let's see how we can move your business forward to be as profitable as possible. I will end this podcast like I have every other one before with a reminder that profit doesn't happen by accident.

Key Thoughts:

• Create a business that is profitable and to plan for that from the very beginning, set some aside to protect it as the business is growing. - Michele (03:30) 

• We're not just building the businesses we have today. We're building the businesses we want to have tomorrow. - Michele (11:44) 

• Make a plan to measure what matters and profit matters. - Michele (14:49) 

• To stay out of debt, we have to love saving more than spending. - Michele (18:00) 

Contact Michele

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

   

References and Resources:

• All Roads Lead to Profit, Episode 004 with Mike Michalowicz

• Profit First by Mike Michalowicz

• Financial Peace by Dave Ramsey

091: Building a Business with Intention  with Glenna Stone

On the podcast, today is Glenna Stone. Glenna is the owner of Glenna Stone Interior Design, located in the Philadelphia area.  Her background is in engineering, and we're going to discover how her knowledge of supply chain and prior work in the consumer products industry has formed her business model for her design company.  

Glenna and I are having this conversation during the time of COVID-19 and we address some of the nuances that this business disruption has brought into our ways of doing business. We also talk about what we think business will look like on the other side of shelter in place. Glenda is such a smart businesswoman. She loves the numbers side and that thrills my heart. She is just gracious and sharing. I'm sure you're going to be inspired by all she has to offer. Enjoy the podcast! 

Topics Mentioned:

• Supply-chain

• Communication

• Pivot

• Opportunity 

Key Thoughts:

• Once I decided to start my own business, it was always to have a team - to have employees. But like so many designers I just started with myself and my house. - Glenna (07:45)

• The industry is always growing and shifting and then our businesses are growing and shifting. - Glenna (13:12)

• If we are so focused on saving other people at the expense of the company, we won't be there to save them later. - Michele (36:15)

• One of the goals I had for 2020, even before the COVID pandemic was to…I did really think about developing a new revenue stream for our business with virtual design. - Glenna (40:05)

• A great thing to do right now is to stay in communication with your clients. - Michele (44:04)

• So we have to always now be in the state of planning. - Michele (50:38)

• The opportunity, right now, is to find the technology that supports a new way of doing business that may allow you to streamline - Michele (55:35)

Contact Michele

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

Contact Glenna

• Website: www.glennastone.com

• Instagram: @glennastonedesign

• Facebook: Glenna Stone Interior Design

References and Resources:

• The Designers' Inner Circle - Become a Member Today

090: How to Rethink Your Business for Maximum Success WITH MICHELE WILLIAMS

On the podcast today we're going to look at how to dissect our businesses so that we can analyze them and perhaps put them back together again in a different way. Really knowing the pieces and parts, as well as what we're great at, or our core competency, helps us to determine the best ways that we can show up and then serve our ideal client. We're going to focus on how to be nimble in an ever-changing world. How to grow and scale while keeping flexibility, which is not always easy. That will allow us to maneuver through any change. 

Topics Mentioned:

• Building blocks

• New picture

• WHY

• Pivot

Key Thoughts:

• Many of us have discovered things about our business that maybe we didn't recognize before; we have new insights now. - Michele (02:08)

• We can't just always do business as usual. - Michele (10:30)

• Your why, values. mission, vision…All of those are building blocks and we're putting them together in a multitude of ways. - Michele (13:01)

• There is no reason that we should be building businesses that we're not 100% in love with. - Michele (19:52)

• The goal here is to reclaim our time and maximize our money while providing the best product and service out there. - Michele (24:36)

Socials:

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

References and Resources:

• Profit First by Mike Michalowicz

• The Designers' Inner Circle - Become a Member Today

089: Brand Clarity is The Starting Point WITH KIMBERLY SUNDT

Kimberly Sundt is with us on the podcast today to discuss all things branding. Kimberly, in her business, focuses on the 4 C’s of Branding: clarity, communication, consistency, and conversation. We will discuss why being super clear on your branding will increase your confidence and actually make “selling” your services so much easier. We also discuss why client experience and perspective matter and the roles they play in your brand story. 

Topics Mentioned:

• Brand Clarity
• Brand Communication
• Brand Consistency
• Brand Conversation 

Key Thoughts:

• It has been a journey and a complicated roadmap and a lot of paths and twists and turns. I'm thrilled where I am today. - Kimberly (01:40)

• Profitability is not just talking about money. It's talking about the profitability of our brand. - Michele (11:58)

• It used to be logo meant that was your brand, which we know is not the case, but that was kind of what people saw as synonymous. - Michele (13:22)

• I know we're all going to look at our competitors. We're going to see what other people are doing. That's fine, but don't even think of them as competitors. - Kimberly (19:34)

• The person who resonates with your message. They hear their problem being described and solved by your words. - Michele (30:34)

• One of the things I've always said is I hated was self-promotion. And I changed my mindset. - Michele (32:32)

• Now, you might be able to go from dot A to dot C and miss B once in a while…But you've got to keep those dots connected. - Kimberly (37:59)

• Once we get through brand clarity, the other three C's become fun. - Kimberly (52:50)

Contact Michele

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

Contact Kimberly

• Website: www.kimberlysundt.com

• Instagram: @kimberlysundt

• Facebook: Bring Your Brand to Life

References and Resources:

• Book Yourself Solid by Michael Port

• The 4Cs of a Strong and Intentional Brand - Read Today

• The Designers' Inner Circle - Become a Member Today

088: Seasons of Life and Work WITH ALYCE LOPEZ

Joining me on the podcast today is Alyce Lopez. Alyce owns and operates the True House, which is a full-service interior design firm that specializes in residential design for busy young families. Alyce began her career in interior design after purchasing a fixer-upper with her husband. She describes it as a 1950’s rambler and learned so much, documented it and her business just blew up. She also has young children who are at home. She's a mom and a wife and a business owner.

In our conversation, we're going to talk about family, seasons, success and what it looks like in different seasons. And then how to pour grace on ourselves because, you know, that's a lot to manage. Many of us are probably at home during COVID-19, at this point, listening and I can promise you are trying to manage. Many of us are now having to do a lot, along with being a business owner, and then a wife, a mom or husband.  All of those things kind of combined into one is really a load to carry. Some of us have to carry it all the time and some only during times of business disruption. But regardless, all of this conversation I think will be super helpful in helping us prioritize, think about each season, align off priorities and make a plan forward. I hope you enjoyed the podcast. 

Topics Mentioned:

• Family
• Seasons
• Success
• Grace 

Key Thoughts:

•  I did have a plan. It was not a hobby, that's for sure. - Alyce (05:09)

• Your growth could be in streamlining your processes and streamlining, the things that you do to be more efficient. - Michele (15:31)

• I could have gone back into corporate at any point and chose not to. - Michele (18:02)

• I feel blessed because we see eye to eye…my husband and I see eye to eye on a lot of stuff. - Alyce (19:08)

• We have chosen to live debt-free. It makes us show up differently in the world than we would otherwise. - Michele (20:18)

• There are seasons for everything. For me every year, right around January, February, March is my slowest time of year. - Alyce (22:18)

• We're all going through different things in life and you don't know based on a professional photo on an Instagram feed, what's behind that story. - Alyce (27:00)

• It's been a huge transition going from being a stay at home mom to working. - Alyce (36:25)

• As a mother, I needed to get out and meet other designers and have time to be inspired. - Alyce (46:40)

Contact Michele

• Email: [email protected]

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

Contact Alyce

• Website: https://www.thetruehouse.com

• Instagram: https://www.instagram.com/thetruehouse

• Facebook: https://www.facebook.com/thetruehouse 

References and Resources:

• EP. 053 with Emily Moore - Listen Today

• EP. 064 with Joel and Michele Williams - Listen Today

• EP. 077 with Brantley and Harrison Williams - Listen Today

• EP. 080 with Jeremy and Chandler Quarles - Listen Today

• The Designers' Inner Circle - Become a Member Today