Interior design involves the conversion of empty residential or commercial spaces into fully

functional, aesthetically pleasing, and efficient homes or offices. This business

involves a lot of creativity, efficiency, and aesthetics. In addition to these, interior

designers are also required to keep up with the times with respect to new interior

design fads and trends as well as new materials in the market.

 An interior designer is also required to be business savvy and aware of the costs of

different materials in market.

 An interior designer should also possess good communication skills since he/she

will spend a lot of time liaising with the client and suppliers or contractors.

There is a lot of job satisfaction that comes from seeing a smile on customers’ faces

when they see that their residential or commercial space has been transformed into

an aesthetically pleasing and fully functional space. Indeed, interior designers get to

work on something that is very close to their customers’ hearts, i.e., their office,

home, shop or showroom, or any other residential or commercial space, and

therefore it is important to carry out the interior design business by paying very

close attention to detail.

It is quite obvious then, that interior designers will need to be creative with design

elements and to have in-depth understanding of their field.

 They will need to be able to visualize the interior design elements in 3D and be able

to present multiple interior designs to the client so that the client has many

different options to choose and can then choose the one that he/she likes best.

 Leadership qualities are also required in an interior designer because he/she will be

liaising with contractors and suppliers as well as other team members, if applicable.

Many people graduate from an interior design college or university or gain

experience as an interior designer by working under other interior designers and

then look at starting their own interior design business. This article presents some

key information on how to start an interior design business in India

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Interior design is a work of art. Sure it may not be about picking up a
brush or a guitar, or any conventional art form that we revere but putting
together an entire house to reflect the personality of the homeowner is
nothing short of talent. When you have an innate gift from God to do
something better than everyone, you cannot let it go to waste.

Most interior design firms hire these talented artists because they see
more potential in them than the interior designers do in themselves.
While working for a firm offers exposure and definitely first-hand
knowledge into the interior design industry, there is more to it.

If you have the talent and the confidence to make it on your own, then
do it. Create a viable business plan and start your own interior design
business to show the world what you’re really capable of. These days,
entrepreneurs all but grow on trees. If they can do it, so can you.

Of course, there is a bit of planning and a requirement to work out the

kinks of a startup. That’s what we are here to help you do. Today, we will
discuss the steps you need to take in order to launch your small
business and take it to new heights. We will lay out the plan so you can
live your dream.

. It’s a Cool Profession

Your profession as an interior designer can take you on many
adventures, some you may have never experienced before. You may get

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opportunities to travel abroad or work with some internationally
acclaimed artists, designers, firms, and professionals. 

The fact that you can create something from scratch and bring out a
unique look in someone’s house and their life is art in itself. Plus, you
can start building your interior design career even after completing
a bachelor’s degree because there is much to learn once you are in the
field. 

2. It’s a Growing Industry

The global interior designing industry is expected to cross $210 billion by
2027 from $145.3 billion in 2020. This shows a speculated CAGR of
5.5% in seven years. Some of the factors leading to this growth are:

 Changes in the social environment lead to a change in living

standards. 
 These changes are more specifically prevalent in the millennials
who are drawn towards better living standards because of their
high-earning professions.

The entire interior design sector is huge. There are many domains like

residential, businesses, corporates, and events of all sizes. As a result, it
is an industry with limitless possibilities for people with the necessary
skills, expertise, and ingenuity.

. Enhances your Creativity

The interior design business is one of the industries that lets you explore
your artistic expression and creativity. It’s one thing to have a blank

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canvas, but when your canvas is a whole interior living environment, you
can really stretch your creativity and imagination.
You can build a unique sense of designing and planning. There are a lot
of permutations and combinations to work with. You can find the ideal
combination of different design elements for the project. You have many
options in terms of color patterns, items you can use, and designs you
can create to build what you think is best according to the client’s
requirements. 
Even though there are some clients that are more choosy when it comes
to what suits their style than others, with time, you will learn to gain
creative control. Moreover, once you have built your name in the
industry, the chances of a client giving unsolicited advice will reduce
because they will trust your judgment more than theirs.

It's a Satisfactory Profession

Nothing can match the satisfaction of realizing that your creative vision
and perspective can impress the clients in the process. There’s also the
gratification of knowing that your efforts may have permanently turned
the existing floor plan into something spectacular.
At the end of the day, your client’s acceptance of your vision and thought
process matters to a great extent. Money is there, but inspiring someone
to appreciate your work is a great feeling. 

Lucrative Business
Interior designing business is lucrative. You can make a lot of money by
working for clients and saving money. Making money can be pretty
straightforward here as you charge for the services rendered or draw a
salary from the interior design firms. 

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You can also build ties with different vendors and suppliers to source
materials and items while saving money on buying at less and selling at
your own price to the client. 
But, as there are two sides to every coin, the interior design profession
has some cons too. Like every other profession, there is scope and
potential in working as a kitchen designer, home designer, etc., provided
you walk on the right path.

 There are lots of opportunities to promote your business

Interior decorating is all to do with the visuals, so promotional activity is

fairly straightforward. Once you’ve built up a portfolio of photographs of
completed projects, you can publish them on your website, social media
profiles and any marketing campaigns you organise. 

There are also various trade shows and business exhibitions for the
home improvement industry, which you can use to meet like-minded
people and make contacts. 

Demand is high

Two main factors have caused demand for interior decorating

businesses to grow in recent years: the increase in house prices and the
coronavirus pandemic.

As people increasingly shun house moves for home renovation work,

industry professionals are kept busy. Plus, we’ve all spent more time in
our homes during the Covid-19 crisis, leading many people to consider
their design choices and decide to upgrade their surroundings.

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How to Start an Interior Design Business?
1. Choose Your Options

The initial notes in your plan must relate to the products or services your company
will provide. Be sure your company doesn't have to deal with more than it can
handle. If you offer full-service design services or specific designs such as
bathrooms or bedrooms, inform your clients about the services. If you offer full
interior design services, it is essential to establish an effective relationship with
suppliers, manufacturers and contractors.

2. Business Requirements

You will require a beautiful location to start your interior design business. It is best
to go for a location with all the documentation needed to run an operation as a
service. The location you select must be large enough to display examples in the
form of big photos. It is possible to start an interior design business with only the
basic requirements. The primary necessities are a computer compatible with the
software, tables for small meetings, chairs, internet access and display showcases.
You could also hire an assistant to take care of your clients and assist you in
managing your priorities. A certificate will be necessary to qualify as an interior
designer in certain states. If you're a decorator, your passion and knowledge will be
considered. If you don't hold any certification, you could enrol in a course once you
have started your business.

3. Study Your Target Audience

There are numerous industries in the interior design business. It is important to

research your potential customers and their needs when you begin a business.
Begin by studying the background of your potential customers and their habits of
buying/hiring. Consider the times of year or seasons that your customers hire interior
designers the most, and then plan to meet their needs. Your understanding of your
targeted market must be consistent with reality. Also, avoid online payment
fraud while your customers purchase your services. 
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4. Market Profitability

The market is always booming. It is easy to find customers via your ads, blog and
other channels. Be aware that competition is fierce in this field and, therefore, it is
essential to offer the best price and higher output to ensure that your customers stay.
There aren't many people in the market with technical expertise within the industry. 

This market is dispersed. There are plenty of opportunities for rapid growth in this
market without competition from small-scale designers. However, you might have to
compete with giants on the market. Establishing a strategic alliance with builders,
carpenters and other local businesses could increase the number of customers, and
it means you'll get sufficient profit to expand your interior design business.

5. Be Aware of Your Niche

Each interior designer has a particular style. Focus on the designs that you enjoy
working on. For instance, if the modern design is what you are good at, you should
focus your offerings around this interior design theme. 

However, this doesn't mean that you should take clients who are only interested in
your design style, and it's a sign that your marketing department must focus on
attracting a crowd that could include potential customers.

6. Astonishing Portfolio

Interior design is a crowded field in India. So, it is essential to be different from the
rest. To achieve this, creating a portfolio is crucial, and creativity is a language that
has its conveying power. 

Through your portfolio, your work will speak on its own. You can build your portfolio
online using sites such as Wix or Pixpa. Making a portfolio is an ongoing process,
and it is essential to keep recording the progress of your presentation and drawing
abilities.

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7. Make Sure You Have a Unique Logo and
Name

To complete this portion, you should spend a lot of time brainstorming. Make sure
you choose a unique name for your company, easy to comprehend and contains the
terms "Interiors" or "Interior Designs". When you have chosen your interior business
title, you'll need to submit it to logo design and get the registration complete. Based
on your state's or province's requirements, ensure you've got the proper documents
to begin an interior design company.

Also Read: How to Start Your Own Home Decor and Furniture Business

8. Cross-Referencing With Stakeholders From

the Industry

Alliance marketing is yet another traditional and effective way to attract clients. You
can conduct a brief review of the top builders, architects and contractors in your area
of operation and then tally. The arrangement could involve financial benefits or be
built on a barter system.

9. Invest in Building an Online Site

The role of social media is continuously growing within the daily lives of your
intended customers. It's important to realise online is the sole source that a large
portion of potential customers will be exposed to your offerings. 

. Determine what services

you’ll offer
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The first thing you want to plan are the types of services you’ll offer. As
an interior designer, you want to make sure you’re not taking on more
than you can handle. If you only want to design kitchens & baths, for
example, you need to make it clear from the get-go.

If you’re going the e-design route, you need to make a list of specific
deliverables.

 Paint palettes
 Mood boards
 Shopping lists
 3D renderings
 Detailed notes
 Etc.

These might be slightly different than if you were to offer the full interior
design experience (i.e., dealing with contractors, manufacturers and
suppliers).

Create a beautiful website that loads fast and provides all the necessary information
about your company. The website pages should be simple to navigate so that search
engines will increase their visibility for your site on the results page of search
engines.

10. Networking Through Hosting Virtual Events

in PR for Designers

The idea of hosting an online meet and greet for designers from various areas like
interior design, fashion, architecture, fine art and product design is an exciting
interaction method. 

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Online events by way of group discussions, webinars or even a chat room can be
thrilling and beneficial. Creative minds are always searching for inspiration to help
push away that creative block from their minds. Social interaction with like-minded
people helps us exchange methods and ideas about design.

2. Focus on your style &

specialty
We all have our own style, and we tend to excel at what we know best. If
you specialize in mid-century modern style or rustic style or traditional
style, that is what you should focus on.

That’s not to say you need to only take on clients that share your style, but
when you start an interior design business, you want to be targeting your
ideal clients.

Ask yourself these questions:

 What is your design style?

 Do you want to focus on condos or bigger homes? (or both!)
 Do you want to design homes for families with kids or just couples?
 Do you want to design both indoor and outdoor spaces?
 Do you only want to design kitchens & baths?

You get where we’re going with this. Find your niche, find your style, and
you’ll attract the right kinds of people.

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3. Choose a catchy
business name & register
it
Now the real fun begins! You need to come up with a name for your
business. It needs to be catchy, and it needs to reflect your work. Have a
lengthy brainstorming session and write down all your ideas.

Some things to keep in mind:

 Don’t make it complicated

 Don’t choose words that are hard to pronounce
 You can include your name if you want to (e.g., Jessica Interiors)
 Use words that have to do with interior design (e.g., interiors, spaces,
designs, etc.)
 Make sure no one else is using the same name

Once you’ve chosen a business name, you need to register it with your
state or province. Make sure you have all the licenses required by law to
start an interior design business so you don’t run into any trouble later on.
Anyone doing a business in India will need to make it an entity and register a

company, and this is no different for an interior design company. In India, there are

many different options when looking to register a company and these range from

one man companies to liability partnerships and private limited firms.

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One may even choose to go the proprietorship or partnership firm route. In

addition to registering the company, one will also need to obtain the PAN number in

the name of the firm and obtain things like service tax registration, and shop and

establishment license from the local municipality, among other related documents.

Furthermore, a bank account will also need to be opened in the name of the

business.

Build a beautiful website

This is a no-brainer. You’re an interior designer, you create beautiful
spaces, so when you start an interior design business, you need a website
that matches your career. If you don’t have experience building a website,
you might want to hire someone to do the job. Or you can watch tutorial
videos and do it yourself (it’s not that hard, promise).

Here’s what you’ll need to do:

 Register a domain name & web hosting

 Install WordPress (or use another platform)
 Invest in a good theme
 Use stunning images
 Provide proper information (services, contact info, etc.)
 Include testimonials
 Optimize your website (see this guide on SEO for interior designers)

Building and perfecting your website will take a while. Don’t rush things,
and don’t start promoting your website if it’s incomplete. Remember –
your website is a reflection of you as a designer.
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Build relationships with
suppliers & contractors
One of the smartest things you can do when you start an interior design
business is to build good relationships with suppliers and contractors.
You want to have connections with reliable people who will deliver
exactly what you ask for, on time, every time.

Make sure you build relationships with:

 Cabinet suppliers
 Appliance distributors
 General contractors
 Countertop suppliers
 Textile suppliers

The more people you know and the more connections you have within
the industry, the better.

 Develop a Marketing Strategy.

Now, it’s time to get started on your marketing strategy.

Where do you want to be in 5 years? Dream big. For example,

do you need a certain number of projects by a certain time?

Do you want your work to be published in a certain magazine

or a certain number of magazines to help build brand

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awareness and showcase your work? Marketing yourself well

will get you there.

The best way to spread the word is by word of mouth. Attend

networking events and local interior design shows. Build

relationships with local vendors, and hand out business cards

and other marketing collateral. When people enjoy working

with you and love the quality of your work, they’ll naturally

want to tell everyone about your services. This is why it’s

important to create the best client experience possible where

you delight your clients at every stage of the process, which

begins with building a beautiful and consistent brand.

Develop a consistent brand that reflects the personality of

your business as well as your niche. You’ll need a logo and a

beautifully designed website that matches the quality of your

work. If you settle for anything less, you’ll be doing yourself a

huge disservice, some might even call it self-sabotage.

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Squarespace has stunning website templates that you can use

to showcase your interior design work. There’s no need to

have a lot of pages on your website—the simpler the better.

For optimal results, you’ll need a homepage, about, services,

portfolio, and a contact us page with testimonials and

beautiful images placed throughout your site. Since interior

design is largely visual, hiring a professional photographer is

key.

To learn more about branding for interior designers, check out

our post Identifying Individuality and Building an Authentic Brand.

And don’t forget to ask your clients for reviews about their

experience working with you, and keep all of your reviews on

your website. You’ll also want to create a social media

presence to provide an online community for your dedicated

clients and a platform to attract new ones. You can share your

client reviews on social media periodically with an

accompanying image or blog post. Have fun with Facebook,

Instagram, Twitter, and PPC ads, and use Canva to easily

create stunning social media graphics.

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Step 5: Get a Solid Accounting System.
Last but not least, get a solid accounting system to make your

life, or your accountant or bookkeeper’s life, easier. Design

Manager is an accounting software designed with interior

designers in mind. With careful item tracking, in-depth drill

downs for each item, interior design specific reporting, and

easy anywhere, anytime access, Design Manager can help you

save time and money by streamlining your entire interior

design business from anywhere in the world.

Once you’ve determined your niche, defined your services,

decided on your rate, developed your marketing strategy, and

found a solid accounting system, you’re well on your way to

starting a successful interior design business. Write everything

down so you can periodically refer back to your business plan

to keep yourself on track.

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Learn more about why Design Manager is the best accounting

software for interior designers by checking out our interview

with bookkeeper Brad Shark right here.

Executive Summary 
Barton Interiors is a proposed venture that will offer comprehensive interior design services
for homes and offices in the Boulder, Colorado area.  Barton Interiors also will provide
access to products to complement the design consulting services including furniture, both
new and antique, decorator fabric, and home and office accessories.  This venture offers the
personalized services the target market desires and can afford in a way that is unique from
concept to implementation.

Recent market research indicates a specific and growing need in the area for the interior
design consulting services and products Barton Interiors offers the market it will serve.  The
market strategy will be based on a cost effective approach to reach this clearly defined target
market.  Although the population of Boulder is under 100,000, the market has a significant
quantity of relatively wealthy households that are conscious of the appearance and feel of
their home and offices.

The approach to promote Barton Interiors with be through establishing relationships with key
people in the community and then through referral activities once a significant client base is
established.  Barton Interiors will focus on developing solid and loyal client relationships
offering design solutions based on the client’s taste, budget, use, and goals for the space.  The
additional selection, accessibility of product, design services, and value-based pricing will
differentiate Barton Interiors from the other options in the area. 

Total revenues in the first year are projected to exceed $46,000 with a loss. The venture will
show increasing profits in year two and three, with revenues projected to increase to almost
$80,000. This interior design business plan outlines the concept and implementation and
details regarding the first three years of this venture.

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Need actual charts?
 

We recommend using LivePlan as the easiest way to create graphs for your own business
plan.

Create your own business plan

Objectives

1. Realize an average of $3,870 of sales each business month for the first year, $5,720 for the
second, and $6,600 for the third year.
2. Generate a minimum of 45% of revenues from product sales versus consulting billing.
3. Establish a commercial revenue client base accounting for 10% of total revenues.

Mission

Barton Interiors is an interior design service for discerning, quality-conscious clients that

seek assistance in their design choices for their primary residences, vacation homes, and
businesses.  This experience offers personal attention through the design process and also
provides design resources and products to its clients through special purchases of furniture,
fabric, and accessories. The total experience is provided in a way to inform, inspire, and
assist people through the process of transforming their home or business environment to
become a unique and personalized expression of themselves and add to their enjoyment of
that interior space.

Keys to Success

The primary keys to success for Barton Interiors will be based on the following factors:

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  Provide the highest quality interior design consulting experience possible.
 Sell specially selected products to these clients to further meet their interior design needs.
 Communicate with our client base through the website and personalized communication
techniques.
 Retain clients to generate repeat purchases and initiate referrals.

Products and Services

Barton Interiors focuses on providing interior design consulting.  This is complemented
by specially purchased furniture, art pieces, decorator fabric, and accessories for the
home and office.  The sales process will begin with interior design consulting services,
and then progress on to offer specially selected components to complement the design
theme.

Products available through Barton Interiors include:

 Furniture available through special purchase arrangements with Thomasville,

Drexel Heritage, and Henredon and local craftsman.
 A selection of decorator fabrics from Waverly, P Kaufmann, Fabricut, Ralph
Lauren, Regal, Robert Allen, Latimer Alexander, Covington, and Portfolio.
 A line of drapery hardware called “Oval Office Iron” purchased through Dept. of
the Interior Decorator Fabrics in Eugene, Oregon found at www.fabric-
online.com.   
 Accessory and art pieces available through wholesale shows.
 Hunter Douglas window treatment products including a variety of hard window
coverings.
 Interior shutters made of wood and a plastic/resin product called “polywood.”
 Antiques acquired for specific client needs through an arrangement with a local
antique buyer and through direct purchases through other sources.

Product and Service Description

Our primary points of differentiation offer these qualities:

 A unique client experience from a trained and professional interior designer

that is qualified and capable of meeting the needs of discerning clients with high
expectations.
 Access to a wide and unique selection of new and antique furniture, accessories,
and special-order decorator fabrics.
 Personal assistance from a complementary product offering, including hard-
covering window treatment, hardware, and home accessories that fit the look
and objectives of each project.

Competitive Comparison

Our competition is primarily from other interior designers.  Looking at a broader

picture, there is also competition from the “do-it-yourself” resource providers that have
retail stores and websites that include the following:

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  Bed, Bath and Beyond moved into the market in the year 2000 at an excellent
location.
 Discount stores including Target, Wal-Mart and Home Depot have expanded
their fabric, bedding, pillow, and ready-made drapery selections often
representing lines including Waverly.
 Norwalk continues to make purchasing “blank” furniture and making a designer
fabric selection an attractive option to recovering furniture.
 Catalog sales continue to be a strong force with a list including Pottery Barn,
Calico Corners, Ballard Design, and Eddie Bauer expanding purchasing selection.
 The list of competitors for home accessory competition includes Pier 1 and local
competitors that provide an entire list of other furniture, accessory and gift
stores.
 Web sales of furniture, fabric and other interior design-oriented products has
expanded dramatically and in many cases is easily available.

Sales Literature

A simple and professional looking brochure will be available to provide to referral

sources, leave at seminars, and on a select basis, use for direct mail purposes.

Company Summary 
Barton Interiors is a start-up business that will offer comprehensive interior design
services for home and office.  This business will assist those that want to have guidance
and council in developing a basic design concept of their project, to the person that
desires someone to take it from concept to complete implementation.  Barton Interiors
will offer the ability for clients to purchase new and antique furniture, art work,
decorator fabric, and home accessories.  The website www.bartoninteriors.com will be
used as another way to communicate the services available and provide a portfolio of
the work accomplished.  The business will begin as a home-based business and is
expected to remain in this structure through at least the first three years.

Company Ownership

Barton Interiors, located in Boulder, Colorado is registered in the State of Colorado as a
sole proprietorship owned and operated by Jill Barton dba Barton Interiors.

Company Locations and Facilities

Barton Interiors is operated from a home office located in Boulder, Colorado.  A room is
dedicated to support a work area, a client contact work center, and display samples of
design concepts, products, and past work. 

Market Analysis Summary 

Barton Interiors has a defined target market client that will be the basis of building this
business.  This client is identical for both the residence and office spaces, but the
target market is identical based on her different roles for each of those spaces. 

20 | P a g e
Effective marketing combined with an optimal product offering is critical to the Barton
Interiors’ success and future profitability. The owner possesses solid information about
the market and knows a great deal about the common attributes of those that are
expected to be prized and loyal clients. This information will be leveraged to better
understand who Barton Interiors will serve, their specific needs, and how to better
communicate with them.

Need actual charts?

 

We recommend using LivePlan as the easiest way to create graphs for your own
business plan.

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Market Segmentation

The profile of the Barton Interior client consists of the following geographic,
demographic, psychographic, and behavior factors:

Geographics

 The geographic market is the affluent sector within the Boulder, Colorado area
with a population of 94,673. (Based on the 2000 Census data.)
 A 20-mile geographic area is in need of the products and services offered and do
not intend to pursue the Denver market at this time.

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  The total target market population is estimated at 24,000 based on the following
demographics.

Demographics

 Female, married and have attended college.

 Have children, but they are not necessarily at home.
 A combined household annual income greater than $100,000.
 Age range of 35 to 55 years, with a median age of 42.
 Owns their home, townhouse and/or condominium valued at over $425,000.
 They and/or their spouse work in a professional setting and may have interior
design requirements for their office space as well as their homes. 
 Belong to one or more business, service, and/or athletic organization including:
o Boulder Country Club.
o Junior League of Boulder.
o American Business Women’s Association.
o American Auxiliary of University Women.
o Doctor’s Wives Auxiliary.

The following is known regarding the profile of the typical resident of Boulder:

 67%  have lived in the area for seven years or more.

 23%  are between the ages of 35 and 44.
 40%  have completed some college.
 24%  are managers, professionals and/or owners of a business.
 53%  are married.
 65%  have no children living at home.
 56%  own their residence.

Psychographics

 The appearance of her home is a priority.

 Entertaining and showing her home is important.
 She perceives herself as creative, tasteful and able, but seeks validation and
support regarding her decorating ideas and choices.
 She reads one or more of the following magazines:
o Martha Stewart Living.
o Country Living.
o Home.
o House Beautiful.
o Country Home.
o Metropolitan Home.
o Traditional Homes.
o Victoria.

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 o Elle Decor.
 If she does seek out television as an information source for home decorating
that is most likely to be “Martha Stewart” and, on a lesser basis, “Interior
Motives.”

Behaviors

 She takes pride in having an active role in decorating their home.

 Her home is a form of communicating “who she is” to others.
 Comparison positioning and stature within social groups are made on an
ongoing basis, but rarely discussed.

Barton Interiors is providing its clients the opportunity to create a home environment to
express who they are. They seek design assistance and have the resources to
accomplish their goals.  They desire their home to be personal, unique, and tasteful as it
communicates a message about what is important to them. Barton Interiors will seek to
fulfill the following benefits that are important to our clients.

Need actual charts?

 

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business plan.

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Market Analysis

23 | P a g e
Potential Customers Growth CAGR

Country Club Women 12% 34,400 38,528 43,151 48,329 54,128 12.00%

Boomers in Transition 9% 12,000 13,080 14,257 15,540 16,939 9.00%

Professional Youngsters 8% 8,000 8,640 9,331 10,077 10,883 8.00%

Home Builders 5% 8,000 8,400 8,820 9,261 9,724 5.00%

Other 0% 0 0 0 0 0 0.00%

Total 10.09% 62,400 68,648 75,559 83,207 91,674 10.09%

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Target Market Segment Strategy

Our marketing strategy will create awareness, interest, and appeal from our target
market for what Barton Interiors offers its clients.  The target markets are separated
into four segments; “Country Club Women,” “Boomers in Transition,” “Professional
Youngsters,” and “Home Builders.” The primary marketing opportunity is selling to these
well defined and accessible target market segments that focuses on investing
discretionary income in these areas:

Country Club Women – The most dominant segment of the four is comprised of women
in the age range of 35 to 50. They are married, have a household income greater than
$100,000, own at least one home or condominium, and are socially active at and away

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from home. They are members of the Boulder Country Club, Junior League of Boulder,
AAUW, and/or the Doctor’s Wives Auxiliary. They have discretionary income, and their
home and how it looks is a priority. The appearance of where they live communicates
who they are and what is important to them. This group represents the largest
collection of “Martha Stewart Wanna Be’s,” with their profile echoing readers of Martha
Stewart Living magazine, based on the current demographics described in the
2001 Martha Stewart Living Media Kit.

Boomers in Transition – This group, typically ranging in age from 50 to 65, is going
through a positive and planned life transition.  They are changing homes (either
building or moving) or remodeling due to empty nest syndrome, retirement plans,
general downsizing desires, or to just get closer to the golf course.  Their surprisingly
high level of discretionary income is first spent on travel, with decorating their home a
close second.  This is what makes this segment so attractive.  The woman of the couple
is the decision maker, and often does not always include the husband in the selection or
purchase process.

Professional Youngsters – Couples between the ages of 25 and 35 establishing their first
“adult” household fall into this group.  They both work, earn in excess of $80,000
annually, and now want to invest in their home.  They seek to enjoy their home and
communicate a “successful” image and message to their contemporaries.  They buy big
when they have received a promotion, a bonus, or an inheritance.

Home Builders – People in the home building process, typically ranging in age from 40
to 55, are prime candidates for Barton Interiors.  This applies to both primary
residences and vacations and secondary homes.  Although only expected to occur two
to fives times each year for the business, this event will be the single largest
dollar transaction amount.

Market Trends

The home textile market, considered to include sheets, towels, draperies, carpets,
blankets, and upholstery, accounts for 37% of all textile output. The trade publication
“Home Textiles Today” estimates the size of the U.S. home textiles market at the
wholesale level, excluding carpets, to be between $6.5 billion to $7 billion annually. The
industry is expected to realize a steady increase over the next few years.

The industry is driven by the number of “household formations” which is expected to

continue through the first years of the new millennium. This is primarily due to the solid
growth in the number of single-parent and non-family households. This growth also
comes from baby boomers needing bigger houses to accommodate growing and
extended families and, as people get older, they are buying homes rather than renting
to realize tax and equity building benefits. Favorable mortgage rates will also enable
others to invest in their existing home.

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The “do-it-yourself” (DIY) market continues to grow and closely parallels the professional
home-improvement market. DIY market growth is attributed to an increased presence
of products, the personal satisfaction experienced, and the cost savings clients realize. A
portion of the do-it-yourself market is the “buy-it-yourself” (BIY) market. Consumers are
buying the product and arranging for someone else to do the fabrication and/or
installation. This is more expensive then the do-it-yourself approach, but less costly
than buying finished products from other sources. It also provides similar feelings of
creativity, pride, and individuality associated with direct creative involvement. This sense
of “participation” in home decorating is an important factor for many of these
committed clients.

Regardless of this data, the following trends and issues impact the success and
challenges of Barton Interiors.

 National economic health: The industry performs better when the country

experiences “good times” regardless of its direct impact on the local economy.
Sales decrease when the stock market falls and when NATO takes military action.
An upbeat State of the Union address by the President correlates with an
increase in sales.
 New home construction activity: More closely related to what is taking place in
our local economy, new home construction has a significant impact on sales
across all product lines.
 Shifts in design trends: Major changes in design trends increase sales. The
Boulder market lags behind metropolitan design trends by six to 12 months. This
offers a buying advantage for the store, offering a preview of what is coming and
how we should adjust our in-stock inventory.

Market Growth

American Demographics projects the number of U.S. households will grow by 16% to 115
million by the year 2010. Almost half of the households comprised of people from 35 to
44 years old are married couples with children under the age of 18. Based on this
research, households in the 45 to 65 age range will grow to 34 million by the year 2000.
These households will increase another 32 percent to 45 million in 2010 as baby
boomers add to this peak-earning and spending age group. These families will either
build new homes or move into existing dwellings. With approximately 46.2% of the
nation’s 93.3 million dwellings built before 1960, many of these homeowners are also
expected to update.

One important factor is that married couples in the 35 to 65 age range represent a
growth segment and enjoy larger incomes than other family structures. They enjoy the
choice to spend their disposable income on life’s amenities. They may demonstrate
“cocooning” by making their home a more comfortable and attractive haven. They
choose to spend resources here rather than on vacations and other discretionary
options. This group represents a larger subsegment of the target market.

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These factors contribute to an increased need for home decorator fabrics for window
treatment, upholstery, pillows, bedding, and other fabric accessory needs. This demand
is expected to be complemented by the growth in the Boulder market. The majority of
homeowners spend a large percentage of their disposable income on home goods
within two years after buying a new house. Therefore, positive trends in new housing
activity represents growth and opportunity for home textiles.

Recent slow downs in the local economy have resulted in falling below sales projections
and these factors will affect market growth.  Adding additional revenues through the
website will hopefully add a more stable factor in to the revenue stream.

The publication, American Demographics, projects the number of U.S. households will

grow by 16% between 1995 and the year 2010, an increase from 98.5 million to 115
million. Of the households comprised of people from 35 to 44 years old, almost half are
married couples with children under the age of 18. Based on research by American
Demographics, households in the 45 to 65 age range should grow to 34 million by the
year 2000. These households will increase another 32 percent to 45 million in 2010 as
baby boomers add to this peak-earning and spending age group. With approximately
46.2% of the nation’s 93.3 million dwellings built before 1960, many of these
homeowners are also expected to update. These factors contribute to an increased
need for home decorator fabrics for window treatment, upholstering, pillows, bedding,
and other fabric accessory needs. This demand is expected to be complemented by the
growth in the Boulder market. The majority of homeowners spend a large percentage of
their disposable income on home goods within two years after buying a new house.
Therefore, positive trends in new housing activity represents growth and opportunity
for home textiles.

One important factor is that married couples in the 35 to 65 age range represent a
growth segment and enjoy larger incomes than other family structures. They enjoy the
choice to spend their disposable income on life’s amenities. They may demonstrate
“cocooning” by making their home a more comfortable and attractive haven. They
choose to spend resources here rather than on vacations and other discretionary
options. This group represents a larger sub-segment of the target market.

27 | P a g e
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Market Needs

Barton Interiors will provide its clients the opportunity to create a home environment to
express who they are. They have the choice to actively participate in the design, look,
and feel of their home. They desire their home to be personal, unique, and tasteful as
well as communicate a message about what is important to them. Barton Interiors seek
to fulfill the following benefits that we know are important to our clients.

Service Business Analysis

The industry continues to be competitive with a “commodity” concern with “designers”

of all skill and background levels available throughout the market.

 Potential Competitors: There are many other interior designers in the Boulder

area and these competitors range from those that provide simple-focused
services, such as draperies only, to a more full-service interior design approach
similar to Barton Interiors.
 Power of Suppliers: Moderately high in most anyone that has a business licence
can have access to wholesale purchase of furniture, fabrics and accessories.

28 | P a g e
  Power of Buyers: Very low as buyers work within the financial terms and
product availability offered through the suppliers that specify the terms and
conditions.
 Substitute Products: High as many people refer to themselves as interior
designers regardless of background, training, or certification. Substitute products
are also high in the area of window treatment as hardcovering solutions have
become available and increasingly affordable.  This includes blinds, shutters, and
other “manufactured” treatments.  Substitute products are not as prevalent in
the area of antiques and art pieces.
 Rivalry: Moderately low with the “territorial” structure that the industry
experiences and moderately low exit barriers.  The easy entry is accompanied
with an easy exit and people get out when it is not working.

With the slow, but steady, growth of the past few years, the industry is now
experiencing a “cautious optimism” regarding the future. Growth and expansion
activities for most areas of the interior design industry appear to be carefully
considered.  Many in the industry continues to decide what to do and buy as the
economy has experienced a slowdown and increased uncertainty from the more
economically confident 1990’s.

Distributing a Service

Our primary method of distribution will be on a direct sales basis for each individual
client.

Competition and Buying Patterns

Competition in the area is strong, with designers ranging from the home-based, no
formal training individuals to the more formalized store front, American Association of
Interior Designers (ASID) certified designers that have close relationships with
prestigious architects.  In most cases, clients make the provider decision on the basis
of three criteria in this order with these percent influences indicated after each:

1. Referrals and relationship with other professionals, particularly architects  (55%).

2. Personality and “expected relationship” with the designer  (25% ).
3. Past work  (15%).
4. ASID certification  (5%).

 Understanding the influence of these factors on the prospective client will be key in the
marketing strategy.

Main Competitors

Current local competition includes the following:

 Interior Designers: There are 37 interior designers listed in the Boulder Yellow
Pages (Year 2000-2001 issue) that offer fabric as a part of their services. Interior

29 | P a g e
 designers make profit off mark-up of fabric in addition to their hourly services
charges. Their costs per yard are typically higher since they do not benefit from
retail or volume discounts. Therefore, their costs to their client is often two to
four times higher than the price per yard from Barton Interiors.
 House of Fabrics: Nationwide recognition and buying power of numerous types
of dated fabric with strong product availability. This store has experienced
financial difficulty in recent years and has closed several locations throughout
the country.
 Warehouse Fabrics: Locally owned, offering low-cost products with a wide
selection of discontinued fabrics and only a limited number of “current” fabrics.
This warehouse concept offers marginal client service with what many “upper
end” clients consider to be an “undesirable” shopping environment.
 JoAnn’s: Nationwide chain with strong buying power. They have a broad fabric
selection for clothing with a limited number of in-store decorator fabrics
available. Their primary target markets are the clothing seamstress, with an
increasing emphasis on craft items. Low prices are fabric main point of
competitive differentiation.
 Website Providers: Fabric sales over the Web are limited at this time, and this will
be a source of competition for the future to watch. Currently, there is no
measurable impact on our market through competitive websites.

Catalog Competitors

An increasing level of competition is anticipated from catalog sales. Recent trends, such
as those demonstrated in the well established but evolving Pottery Barn catalog,
indicates increased interest in offering decorator fabric, window designs, and other
home decorating products through this increasingly popular channel of distribution.
Catalog sources do not offer clients the option to see, touch, and have the fabric in their
homes. Price is the most significant competitive factor this product source presents. The
most aggressive catalog competitor is Calico Corners followed by Pottery Barn and other
home-accessory-based providers.

Discounters

Channels of distribution continue to shift in favor of discounters, who account for a

significant portion of the growth in the industry. As consumers experience lower levels
of disposable income, discounters leverage frequent store promotions to entice frugal,
value-oriented consumers. One of the biggest criticism of discounters is their failure to
offer a quality service experience and their failure to present inviting displays to
promote sales. These discounters, along with specialty store chains, present one of the
most severe competitive threats for individually-owned specialty stores. This is partially
due to extensive promotional efforts, price advantages, and established relationships
with their vendors. One example of these discounters is the “home improvement”
chains, such as Home Base. This aggressive retailer has adopted a strategy to include
complete decorator departments in their metropolitan stores. Currently existing in the
Los Angeles market, this strategy is anticipated to be introduced into the Seattle area

30 | P a g e
and other select metropolitan markets within the year. Although the Boulder Home
Base store sells basic curtain rod hardware and other hard cover window treatment,
there are no known plans at this time for the Boulder Home Base store to implement
this in the foreseeable future. This will be an important issue to monitor for competitive
purposes.

Business Participants

Industry participants in the area of interior design comes from six general categories;
interior designers, traditional furniture stores, traditional fabric retail stores, catalog and
Web-based sales, click and mortar discounters, and individually owned stores. Most of
these players have some type of an online presence. The following provides an
overview of the type of participants that are most active and most successful in this
arena.

Interior Designers
This large group makes up a substantial quantity of higher-end fabric purchases. For
example, there are 37 interior designers listed in the Boulder Yellow Pages (Year 2001-
2002 issue) that offer fabric as a part of their services. Interior designers make profit off
mark-up of fabric in addition to their hourly services charges. Their costs per yard are
typically higher since they do not benefit from retail or volume discounts. Therefore,
their costs to the client is often two to four times higher than the price per yard from
Barton Interiors. It is unusual to find an independent interior designer that has a
website.

Traditional Fabric Retail Stores

The traditional retail stores are corporate stores (not franchises) that have multiple
locations in select metropolitan markets.  Example of these stores include:

 JoAnn’s www.joanns.com – Nationwide chain with strong buying power. They

have a broad fabric selection for clothing with a limited number of in-store
decorator fabrics available. Their primary target markets are the clothing
seamstress, with an increasing emphasis on craft items. JoAnn’s purchased the
House of Fabric chain and has a link set up from the previous URL
www.houseoffabrics.com.
 Calico Corners www.calicocorners.com – This national chain was a franchise
through the 1980s (no longer selling licenses) and has been purchasing those
stores throughout the country. Calico Corners stores number about 90 and are
in most larger cities, with a concentration in the Northeast.

Catalog and Web-based Competitors

Virtually every catalog and major retail store in the industry now has a website. The
most aggressive and direct catalog competitor is Calico Corners at
www.calicocorners.com which complements their 80+ retail store network. An
increasing level of competition is anticipated from these catalog and Web-based sales.
Recent trends, such as those demonstrated in the well established, but evolving, Pottery

31 | P a g e
Barn catalog at www.potterybarn.com and Ballard Design at www.ballarddesigns.com
indicates increased interest in offering decorator fabric for window design and
upholstery through this increasingly popular channel of distribution.

Click and Mortar Discounters

Channels of distribution continue to shift in favor of discounters, who account for a
significant portion of the growth in the industry and who have been extremely active on
the Web. As consumers experience lower levels of disposable income, discounters
leverage frequent store promotions to entice frugal, value-oriented consumers. One of
the biggest criticism of discounters is their failure to offer a quality service experience
and their failure to present inviting displays to promote sales. One example of these
discounters is the “home improvement” chains, such as Home Base at
www.homebase.com. This aggressive retailer has adopted a strategy to include
complete decorator departments in their metropolitan stores. Currently existing in the
Los Angeles market, this strategy is anticipated to be introduced into the Seattle area
and other select metropolitan markets within the year. Although the Boulder Home
Base store sells basic curtain rod hardware and other hard cover window treatment,
there are no known plans at this time for the Boulder Home Base store to implement
this in the foreseeable future. Bed, Bath & Beyond at www.bedbathandbeyond.com has
an even larger assortment of hardware with a selection of pre-made solutions for
window treatments, bedding and pillows. Both of these retailers have stores in our
market and with selection activity on the Web, this will be important to monitor for
competitive purposes.

Individually Owned Stores

Some form of locally owned stores exist in virtually every market with a population of
over 50,000. Typically, the low end begins with those that carry a limited selection of
decorator fabric, often with a focus on clothing fabric and crafts. At a slightly more
sophisticated level, stores may offer low-cost products with a wide selection of
discontinued fabrics and only a limited number of “current” fabrics. “Full service”
individually owned stores, like Barton Interiors, are less prevalent. An increasing
number of these stores at all level do have websites, including this local competitor
example: www.econosales.com.

Strategy and Implementation Summary

The primary sales and marketing strategy for Barton Interiors includes these factors:

 A premier interior design consulting experience that provides impressive client

service throughout.
 The sale of other complementary products that adds value for the client’s total
experience.
 Providing a experience that will result in repeat business for home and/or office
needs and client referrals.

This strategy will be implemented through the tactics and programs described in this
section.

32 | P a g e
SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses relating to the
market analysis summary and describes the opportunities and threats facing Barton
Interiors.

Strengths

 The proven ability to establish excellent personalized client service.

 Strong relationships with suppliers that offer flexibility and respond to special
product requirements.
 Good referral relationships with architects, complementary vendors, and local
realtors.
 Client loyalty developed through a solid reputation among repeat, high-dollar
purchase clients.

Weaknesses

 The owner is still climbing the “retail experience learning curve.”

 Not established in a market where a variety of interior design options exist.
 Challenges of the seasonality of the business.

Opportunities

 A significant portion of our target market is desperately looking for the services
Barton Interiors will offer.
 Strategic alliances offering sources for referrals and joint marketing activities to
extend our reach.
 Promising activity from new home construction activity.
 Changes in design trends can initiate home updating and, therefore, generate
sales.

Threats

 Continued price pressure due to competition or the weakening market reducing

contribution margins.
 Dramatic changes in design, including fabric colors and styles can present
challenges to keep paced with what is desired by what is expected to be a
leading-edge client base. 
 Expansion of products and services offered by other sources including national
discount stores into the local market including Target, Wal-Mart, and Home
Depot.
 Catalog resources, including Calico Corners and Pottery Barn, with aggressively
priced trend-setting fabric products including drapery, bedding and slipcovers.

This analysis indicates solid potential success, but the weaknesses and threats must be
recognized throughout the life of the venture.

33 | P a g e
To develop good business strategies, perform a SWOT analysis of your business. It's
easy with our free guide and template. Learn how to perform a SWOT analysis

Strategy Pyramid

The following three strategies summarize our implementation process for the
upcoming year. They address in-store retail revenue, expansion to non-fabric revenue
sources, and Web-based sales activities.

STRATEGY #1 – Generating Referrals

   Tactic #1A – Build a client base through leverag

leveraging existing contacts from former clients of the architecture firm.

   Tactic #1B – Build a referral network through professional contacts. Offer special order
fabric that will arrive in reasonable time frame and enable to provide something very unique
for each customer.

         Program #1A – Press release in the local paper announcing the business is open.

         Program #1B – Offer seminars through organizations to promote the concept of using
an interior designer and using Barton Interiors.

STRATEGY #2 – Product Sales

   Tactic #2A – Promotion of products available through Barton Interiors. 

         Program #2A – Seminars and demonstration promotions.

         Program #2B – Cross selling activities with home and office consulting.

   Tactic #2B – Promotion of art and antiques.

          Program #2C – Demonstrate the unique qualities they offer to promote these higher
dollar transactions.

          Program #2D – Display this through the online and notebook portfolio.

STRATEGY #3 – Generate Awareness Through the Website

   Tactic #3A – Better facilitate and communicate Barton Interiors services and

product through the website.

         Program #3A – Design of  www.bartoninteriors.com.

         Program #3B – Integration of completed client work.

   Tactic #3B – Monthly assessment of performance of email inquiries.

34 | P a g e
         Program #3C – Establish goals of the program  (Refer to Web Strategy Plan done in
Web Strategy Pro).

         Program #3D – Evaluate the client work initiated through the site. 

Value Proposition

Barton Interiors offers the highest interior design experience for the home and office
conveniently available for those in the Boulder area.  The concept is unique through the
selection of antiques, home accessories, and complementary products along with the interior
design consulting experience. 

Competitive Edge

Barton Interiors will be differentiated from other interior designers by the value it offers
in quality, sought-after products not found through other designers or store choices, and
through the excellent service and support it offers. Client follow-through will be impeccable. 
This competitive edge leverages the same proven factors that indicated higher success rates
for interior design services. 

Marketing Strategy

The marketing strategy is based on establishing Barton Interiors as the resource of choice for
people in need of interior design ideas and products.  The more involved “do-it-yourself”
and the “buy-it-yourself” clients will find the consulting and guidance helpful.  On the other
end of the spectrum, the “just-get-it-done” client will find Barton will successfully
accomplish exactly that.  All clients will find Barton Interiors to be a resources to decorate
their homes and offices in a way that is inspiring, inviting, and motivating.

Our marketing strategy is based on superior performance in the following areas:

 Unique consulting services.

 Product choices specifically chosen for each individual client project.
 Overall quality of the experience and the result.
 Excellent client service and support regardless.

This  marketing strategy will create awareness, interest, and appeal from our target market for
what Barton Interiors offers our clients.  This will be executed in a manner that will entice
them to come back for repeat purchases and encourage them to refer friends and professional
contacts.

Pricing Strategy

Product pricing is based on offering high value to our clients compared to others in the
market. Value is determined based on the best design services, providing a “picture” of what
the space will look like before the work begins, convenience, and timeliness in accomplishing
the goal.

Promotion Strategy

35 | P a g e
The promotion strategy will focus on generating referrals.  Other potential sources of
promotion include:

 Newspaper Advertisements: Select advertisements in the Boulder Herald.

 Television Advertisements: Select “Martha Stewart” and “Interior Motives” local television
shows.
 Quarterly Postcard: A direct mail postcard distributed to the client mailing list.
 Website: Traffic from www.bartoninteriors.com.

Distribution Strategy

The primary source of distribution is through the tradition retail distribution channel.  On a
secondary basis, it will be through the website via email inquiries and phone sales, or directly
from the site itself.

Marketing Programs

The single objective is to position Barton Interiors as the premier source for home decorator
fabrics in the Boulder area, commanding a majority of the market share within three years.
The marketing strategy will seek to first create client awareness regarding the products and
services offered, develop that client base, establish connections with targeted markets and
work toward building client loyalty and referrals.

Barton Interiors’ four main marketing strategies are:

1. Increased awareness and image.

2. Leveraging existing client base.
3. Cross selling.
4. New home construction promotion.

The strategies will be implements through the following marketing tactics and programs.

Strategy #1
INCREASED AWARENESS and IMAGE – Informing those not yet aware of what Barton
Interiors offers.

 Advertising
o Martha Stewart.
o Interior Motives.
 Referral Generation
o Realtor “open house” promotions.
o Complementary vendor referrals.
 Imperial Floors.
 Upholstery resources.
 “Design Time” Interior Design.
 27th Street Fabrics.
 Organization Relationships
o Co-sponsorship of fund raising activities.
o Participating in social and service events.

36 | P a g e
Strategy #2
LEVERAGING EXISTING CLIENT BASE – Our best sales in the future will come from
our current client base.

 Client Service and Relationships

o Exceptional client service in the store.
o Follow up contact.
o Personal shopper support.
 Additional Experiences
o Classes.
o Demonstrations.

Strategy #3
CROSS SELLING – Increasing the average dollar amount per transaction.

 Internal
o Additional sales of furniture, art pieces, and fabric and home accessories. 
o Look for office/commercial assignments.
 Prospecting
o Ongoing work including more involvement in the implementation phase.
o Future assignments based on additional work initiated by family changes and
transitions.

Strategy #4
NEW HOME CONSTRUCTION PROMOTION – Connecting with people involved in the
building process.

 Connecting with “Suppliers”

o Realtors gift certificate program.
o Builders design support services.
o Loan Officers gift certificate program.
 Connecting with “Clients”
o Subscription and use of “newcomers” report.
o Chamber of Commerce new members update.

Positioning Statement

For the person that seeks to create a personalized and unique impression of her home, Barton
Interiors is the source for client-oriented design services. Clients will be impressed with, and
return for, the services they receive and the outcome they have enjoyed.  Unlike other interior
designers or stores, such as  JoAnn’s, Warehouse Fabric, or catalog options, Barton Interiors
is a pleasant and tasteful resource that encourages everyone in the process of decorating their
home. Unlike using the services of other interior decorators, Barton Interiors allows the
individual to participate in their design choices to the extent they choose, and realize greater
value for the dollars they invest.

Sales Strategy

The key to our sales strategy is referrals from pleased clients that are proud of the result
Barton Interiors provided them and pleased to tell their friends–people much like them. 

37 | P a g e
Keeping in contact with past clients to acquire repeat business and to remind them of this
referral opportunity will be key.  Sales activities will depend on creating awareness about the
services Barton Interiors offers and then build on each and every client as they make the
decision to refer to others.

Web Plan Summary

The website of www.bartoninteriors.com will be used for information only purposes at this
time.  Contact information will be presented with a complete portfolio of work
accomplished.  Additional information will be provided regarding the product-based
resources Barton Interiors incorporates into the work done for clients.

Sales Forecast

The sales forecast is broken down into three main revenue streams; residential consulting
revenue, commercial consulting revenue, and product sales.  The goal is to have these two
revenue streams be equal by the second year, with product sales slower to secure during year
one.  The revenue forecast for the upcoming year is based on a modest 12% growth rate.  The
economic unpredictability adds to the difficulty of making these projections.

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38 | P a g e
Sales Forecast

Sales

Residential Consulting $22,700 $31,200 $46,000

Commercial Consulting $3,960 $6,240 $7,200

Product Sales $19,800 $31,200 $46,000

Other $0 $0 $0

Total Sales $46,460 $68,640 $99,200

Direct Cost of Sales Year 1 Year 2 Year 3

Residential Consulting $3,405 $4,680 $6,900

Commercial Consulting $594 $936 $1,080

Product Sales $10,890 $17,160 $25,300

Other $0 $0 $0

Subtotal Direct Cost of Sales $14,889 $22,776 $33,280

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Create your own business plan

Sales Programs

In brief, our marketing mix is comprised of these approaches to pricing, distribution,

advertising and promotion, and client service.

Pricing – Residential consulting will bill at an average of $90 per hour and commercial
consulting at $100 per hour.

Distribution – All services and products will be distributed directly through the personal
contact.

Advertising and Promotion – The most successful advertising is anticipated to be through

the Boulder Herald and through ads on local broadcasts of the “Martha Stewart” and “Interior
Motives” television shows.

Client Service – Excellent, personalized, fun, one-of-a-kind client service is essential. This is
perhaps the only attribute that cannot be duplicated by any competitor.

The first goal is to recognize individualized needs of each client.  If they are a repeat client,
they benefit from the knowledge regarding their lifestyle and taste that was gained from the
previous experience.

Financial Plan 
The initial funding of $25,000 will be invested by the owner.  The goal is to fund the growth
of the business from its earnings.  The financial plan contains these essential factors:

1. A growth rate in sales of 47% for the year 2002 and 15% for 2003.
2. An average sales per month that increases each year, averaging $3,870 in the first year,
$5,720 the second, and $6,600 in the third year.
3. Continue to fund the growth of the business from the revenues it generates.

<p size="4" Financial difficulties and risks

 Slow sales resulting in less-than-projected cash flow.

 Unexpected and excessive cost increases compared to the planned expenses.
 Overly aggressive and debilitating actions by competing designers.
 A parallel entry by a new competitor further diminishing revenue generation potential.

Worst case risks might include

 Determining the business cannot support itself on an ongoing basis.

 Dealing with the financial, business, and personal devastation of the venture’s failure. 
Survivable but painful.

Break-even Analysis

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The break-even analysis below is expressed as a per-client unit. This is based on average
hourly billing, product sales, and costs per transaction.

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Break-even Analysis

Monthly Revenue Break-even $4,067

Assumptions:

Average Percent Variable Cost 32%

Estimated Monthly Fixed Cost $2,763

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Important Assumptions

The following captured critical assumptions will determine the potential for future success.

 A healthy economy that supports a moderate level of growth in the market.

 The ability to support a gross margin percentage in excess of 65%.
 Keeping operating costs low, particularly in the areas of product purchases ongoing monthly
expenses.
 Receiving an initial payment for each project of 50% of estimated time and product
purchases and collecting the balance of these revenues within 45 days of completing each
project.

General Assumptions

Plan Month 1 2 3

Current Interest Rate 9.50% 9.50% 9.50%

Long-term Interest Rate 8.50% 8.50% 8.50%

Tax Rate 28.17% 28.00% 28.17%

Other 0 0 0

Key Financial Indicators

The key financial indicators focus on cash flow.  There is virtually no inventory but late
payments for completed jobs will be a concern.  Timely billing and collection will be critical. 
All expenses are tracked on a monthly basis, recorded in the accounting software, and will be
compared to our business plan budget.

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Start-up Summary

The following details the initial start-up expenses for Barton Interiors.  Most equipment costs
are office related.  Sample and display costs include books, samples and resources necessary
to promote furniture, fabric and other home accessory products.

Start-up

Requirements

Start-up Expenses

Legal $500

Stationery etc. $850

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Brochures $420

Consultants $450

Insurance $150

Samples and Reference Books $3,250

Research and development $800

Expensed equipment $4,250

Other $550

Total Start-up Expenses $11,220

Start-up Assets

Cash Required $9,780

Other Current Assets $1,000

Long-term Assets $3,000

Total Assets $13,780

Total Requirements $25,000

Start-up Funding

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Start-up Expenses to Fund $11,220

Start-up Assets to Fund $13,780

Total Funding Required $25,000

Assets

Non-cash Assets from Start-up $4,000

Cash Requirements from Start-up $9,780

Additional Cash Raised $0

Cash Balance on Starting Date $9,780

Total Assets $13,780

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabilities $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

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Total Liabilities $0

Capital

Planned Investment

Jill Barton $25,000

Investor 2 $0

Other $0

Additional Investment Requirement $0

Total Planned Investment $25,000

Loss at Start-up (Start-up Expenses) ($11,220)

Total Capital $13,780

Total Capital and Liabilities $13,780

Total Funding $25,000

Projected Profit and Loss

The following represents the projected profit and loss for Barton Interiors based on sales and
expense projections for 2002 through 2004.

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Pro Forma Profit and Loss

Sales $46,460 $68,640 $99,200

Direct Cost of Sales $14,889 $22,776 $33,280

Other $0 $0 $0

Total Cost of Sales $14,889 $22,776 $33,280

Gross Margin $31,571 $45,864 $65,920

Gross Margin % 67.95% 66.82% 66.45%

Expenses

Payroll $19,800 $28,800 $36,000

Sales and Marketing and Other Expenses $11,560 $13,430 $15,100

Depreciation $300 $750 $800

Leased Equipment $0 $0 $0

Utilities $540 $660 $800

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Insurance $960 $1,200 $1,600

Rent $0 $0 $0

Payroll Taxes $0 $0 $0

Other $0 $0 $0

Total Operating Expenses $33,160 $44,840 $54,300

Profit Before Interest and Taxes ($1,589) $1,024 $11,620

EBITDA ($1,289) $1,774 $12,420

Interest Expense $0 $76 $238

Taxes Incurred $0 $265 $3,206

Net Profit ($1,589) $683 $8,176

Net Profit/Sales -3.42% 0.99% 8.24%

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Projected Cash Flow

The cash flow projections are outlined below.  These cash flow projects are based on our
basic assumptions and expense and revenue projections. 

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Pro Forma Cash Flow

Cash Received

Cash from Operations

Cash Sales $32,522 $48,048 $69,440

Cash from Receivables $9,578 $18,511 $26,892

Subtotal Cash from Operations $42,100 $66,559 $96,332

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Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $1,600 $1,800

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $210 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $42,310 $68,159 $98,132

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $19,800 $28,800 $36,000

Bill Payments $24,693 $38,506 $52,924

Subtotal Spent on Operations $44,493 $67,306 $88,924

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

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Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $44,493 $67,306 $88,924

Net Cash Flow ($2,183) $852 $9,209

Cash Balance $7,597 $8,449 $17,658

Projected Balance Sheet

Barton Interiors’ balance sheet is outlined below. 

Pro Forma Balance Sheet

Assets

Current Assets

Cash $7,597 $8,449 $17,658

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Accounts Receivable $4,360 $6,441 $9,308

Other Current Assets $790 $790 $790

Total Current Assets $12,747 $15,680 $27,757

Long-term Assets

Long-term Assets $3,000 $3,000 $3,000

Accumulated Depreciation $300 $1,050 $1,850

Total Long-term Assets $2,700 $1,950 $1,150

Total Assets $15,447 $17,630 $28,907

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $3,256 $3,157 $4,457

Current Borrowing $0 $1,600 $3,400

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $3,256 $4,757 $7,857

Long-term Liabilities $0 $0 $0

Total Liabilities $3,256 $4,757 $7,857

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Paid-in Capital $25,000 $25,000 $25,000

Retained Earnings ($11,220) ($12,809) ($12,126)

Earnings ($1,589) $683 $8,176

Total Capital $12,191 $12,874 $21,050

Total Liabilities and Capital $15,447 $17,630 $28,907

Net Worth $12,191 $12,874 $21,050

Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 7389, Business Services–Interior Design
Services, are shown for comparison. If we fail in any of these areas, we will need to re-
evaluate our business model:

 Gross margins at, or above, 65%.

 Month-to-month and annual increases to meet the expected growth requirements.
 Self-fund growth not dependant on the credit line to meet cash requirements.

Ratio Analysis

Sales Growth n.a. 47.74% 44.52% 12.40%

Percent of Total Assets

Accounts Receivable 28.22% 36.53% 32.20% 26.10%

Other Current Assets 5.11% 4.48% 2.73% 44.70%

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Total Current Assets 82.52% 88.94% 96.02% 74.50%

Long-term Assets 17.48% 11.06% 3.98% 25.50%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 21.08% 26.98% 27.18% 44.30%

Long-term Liabilities 0.00% 0.00% 0.00% 16.00%

Total Liabilities 21.08% 26.98% 27.18% 60.30%

Net Worth 78.92% 73.02% 72.82% 39.70%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 67.95% 66.82% 66.45% 0.00%

Selling, General & Administrative Expenses 73.96% 65.72% 38.61% 80.80%

Advertising Expenses 16.36% 12.24% 11.36% 1.30%

Profit Before Interest and Taxes -3.42% 1.49% 11.71% 2.20%

Main Ratios

Current 3.92 3.30 3.53 1.75

Quick 3.92 3.30 3.53 1.38

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Total Debt to Total Assets 21.08% 26.98% 27.18% 60.30%

Pre-tax Return on Net Worth -13.03% 7.36% 54.07% 3.80%

Pre-tax Return on Assets -10.29% 5.38% 39.38% 9.70%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -3.42% 0.99% 8.24% n.a

Return on Equity -13.03% 5.30% 38.84% n.a

Activity Ratios

Accounts Receivable Turnover 3.20 3.20 3.20 n.a

Collection Days 55 96 97 n.a

Accounts Payable Turnover 8.58 12.17 12.17 n.a

Payment Days 27 30 26 n.a

Total Asset Turnover 3.01 3.89 3.43 n.a

Debt Ratios

Debt to Net Worth 0.27 0.37 0.37 n.a

Current Liab. to Liab. 1.00 1.00 1.00 n.a

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Liquidity Ratios

Net Working Capital $9,491 $10,924 $19,900 n.a

Interest Coverage 0.00 13.47 48.93 n.a

Additional Ratios

Assets to Sales 0.33 0.26 0.29 n.a

Current Debt/Total Assets 21% 27% 27% n.a

Acid Test 2.58 1.94 2.35 n.a

Sales/Net Worth 3.81 5.33 4.71 n.a

Dividend Payout 0.00 0.00 0.00 n.a

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