Kimberley Seldon is the founder of Kimberley Seldon Design Group, an interior design firm with offices in Toronto and Los Angeles.
In addition to her design practice, she runs Business of Design, an online learning platform she started to help other professionals in the design field to become financially successful, with the stated goals that designers running their own practices should aim at making 6-figures salaries.
I wanted to have Kimberley on the podcast to discuss how she and others have accomplished that, as financial viability should be the foundation of any design business.
About the podcast: Single Serves is a podcast where we interview experts on single issues of interest to architects and designers. The thought-provoking ideas shared here are intended to inspire our listeners to become well-rounded entrepreneurs who are the leaders of their field.
Credits: ©2023 Produced by Révélateur Studio & edited by Chris Rodd
Transcript below edited for clarity and brevity:
Arnaud Marthouret:
Kimberly Seldon is the founder of Kimberly Seldon Design Group, an interior design firm with offices in Toronto and Los Angeles. In addition to her design practice, she runs Business of Design, an online learning platform. She started to help other professionals in the design field to become financially successful with the stated goals that designers running their own practices should aim at making six figure salaries.
I wanted to have Kimberly on the podcast to discuss how she and others have accomplished that as financial viability should be the foundation of any design business. So thank you very much, Kimberly, for being on the show.
Kim Seldon:
Oh, I'm thrilled to be here. I hadn't anticipated doing it from the car, so thank you for accommodating that, Arnaud, I appreciate it.
Arnaud Marthouret:
That's no problem at all. So let's start with the easy question and can you tell us who you are and what you do in your own words, in three sentences or less?
Kim Seldon:
I am an interior designer, so that's first and foremost.And I run a thriving busy business with offices in Toronto and Santa Monica and Business of Design got started because I wanted to teach other interior design professionals.
Arnaud Marthouret:
That sounds great. So how did you come up with Business of Design? What's the genesis?
Kim Seldon:
Well, the genesis is me failing miserably at running an interior design firm, believe it or not, I had all these clients because I was on television as an interior design expert, so my phone was ringing off the hook. I had an unlimited supply of clients wanting to work with me. And every project started the same way with the client, super excited and enthusiastic about the project. And it ended the same way with the clients, less than enthusiastic about hiring me and not so enthusiastic about the project. And along the way, it never was the case that the clients didn't like me or didn't think I was trying. They all could see that I was really trying, but I did not know how to run a business and I certainly didn't know how to run a profitable business. I didn't even know that I was allowed to want to be a profitable business, if that makes any sense.
Arnaud Marthouret:
It does, absolutely. So was there an aha moment for you where you cracked the code of being financially successful? And if so, what would that be?
Kim Seldon:
That's so good. I'll tell you the no aha moment, which is when I hired my first business coach and she said, "Can I take a look at your P&L," and I didn't know what that was. I was thinking like Proctor and Gamble. So that's where I started from. So nobody started lower down the financial savviness pole than I did. But I believe the aha moment came for me, after working for two years with a business coach and she was trying to get it into my head that if I didn't have systems and process to run my business, I was never going to be successful. And I wasn't buying it because I was creative and don't you understand creative people, every project is different, and every budget is different, and every client is different.
And I just couldn't make her understand that while systems were great for Starbucks, they wouldn't work for me. And we had a fight after a couple of years and she literally threw a book at my head and the book was a tiny little book called The E-Myth by Michael E. Gerber. And I read that book and I thought, well, I'm through with her, she's an idiot. But here's this little book, I'm going to read this book, and I read this book and I got it. For me, that was the aha. Okay, I can see now why I'm going to need systems to help me run my business and how I will not be profitable until I have those systems.
Arnaud Marthouret:
And that's a great segue into my next question because financial matters are often, and it's a broad generalization seen as something you shouldn't really talk about that's dirty, or being profitable is bad, or whatever the case may be. But why do you think being financially sound is so important for design businesses?
Kim Seldon:
Well, it's important for any business. How can you be a business if you're not hitting at least some measure of profitability? If you are not doing that, then you don't have a business, you have a jobby. You have a little hobby that's makes you feel good and puffs you up in some way. And I was underperforming on every level, but the financial aspect is the part that's so crippling. At some point, you can't keep doing it if you're not profitable. And in addition to that, I think there was this feeling that it was embarrassing. It's shameful and embarrassing when you're going to your accountant at the end of the year and you've been working full time and your accountant says you made $30,000 this year and you're celebrating because you've had years where you lost money. And then the accountant says, "Do you realize that $30,000 is minimum wage?"
And I'm like, "No, that can't be right because I'm working like a maniac. There's no way I could be making minimum wage." And you do the math and like, that's minimum wage. And in the interior design community, which is my wheelhouse, most interior design professionals are making minimum wage or something just a little bit higher than that.
Arnaud Marthouret:
So you're talking about net income, right?
Kim Seldon:
Net income, yeah.
Arnaud Marthouret:
So which is for listeners, after tax, not the gross income.
Kim Seldon:
Exactly. And I wouldn't even have known to ask that question 20 years ago when I started with my business coach, because the business training I got in interior design school was abysmal. It didn't prepare me at all for running my business, not at all. And in fact, there was even a feeling that as, maybe it was partly because I'm female, it was almost like I had to be apologetic about wanting to make money, that somehow that was greedy. I'll give you a really good example, Arnaud. In our business, we have a model where we charge our clients for the services they want to buy. So some clients want to buy your interior design services and want you to do the design, and the drawings, and all of that.
And some clients want you to do that, plus they want you to procure all the goods, plus they want you to hire all the trades, and do all the trade management. Well, those are three different services. And for the longest time, I felt like you can't charge clients three times. Right? That's not fair. But in fact, yeah, you can because those are three separate services. If they don't want all three services, then charge them for the services they want. But if they want all three, they need to pay for all three. And so I had to overcome a lot of crippling money mindset, if you will.
Arnaud Marthouret:
And I think that's a good segue into the topic of value versus cost because too many, maybe even most designers still charge by the hour instead of charging by the value of their work. Do you have any thoughts on that and what would you advise designers to do?
Kim Seldon:
Well, it's so interesting because I know a lot of people love a value based fee or a flat fee as we call it. But in our business, too often that flat fee is a race to the bottom. It's how low do I have to go to get you to hire me? How low do I have to go to get this job? And so we actually do recommend that interior designers who are just starting out always start with an hourly fee. But the trick is to actually capture all the hours you're spending. And we're just using hours, the increment of time is a stand-in for our expertise. I have to charge for my expertise, so I'm using this increment of time to charge for it. But if I document every single hour it takes and then I'm willing to bill the client for every single hour it took me to accomplish the job, then I will have some understanding of what that flat fee or that value-based fee might be.
But most designers are suffering from the creative entrepreneurship problem, which is that they're afraid to charge too much. They desperately want the job. So often we're thinking about, wow, this is going to look amazing on my website. I can't wait till I see the pictures. And so what am I going to say to this client to convince them to give me the job? And it's okay if I don't make a lot of money on this job because for sure I'll make a lot of money on the next job. But of course, you tell yourself that lie for years, 20 years, 30 years, 40 years.
Arnaud Marthouret:
That makes a lot of sense. So let's go back to the idea of being financially sound and understanding how money works and the difference say between gross income, net income, and all the rest of it. I think and I'm not mistaken if I sit that most businesses and maybe even more design businesses are reluctant to acknowledge that. Why do you think that is?
Kim Seldon:
Reluctant to acknowledge that-
Arnaud Marthouret:
The importance of being financially sound and live in that kind of bubble that you described you were in before you had that aha moment?
Kim Seldon:
Yeah, that's such a good question. I don't know, I've made up in my head, and this is probably not true, that more women suffer from this feeling that they're not supposed to make money than men. That may not be true, but I certainly got different messages growing up than my brothers did. My brothers were told, "You can be anything. You're a captain of industry, go in there and demand a raise." And I was told, "Be quiet. Don't rock the boat. Nobody likes a mouthy broad." I got very different [inaudible 00:11:00] why I think it is. And then I think another part of it is, that we all need to be taught how to run a business. There are enough entrepreneurs now that that should be something we're taught from a young age.
And financial savviness is something we need to be taught from a young age. There's a huge difference between making a million dollars in income and making a million dollars in profit. Those are different worlds. And too often interior design professionals who say, "Oh yeah, I made a million this year." And I'm like, "Oh, that was your take home pay?" And they're like, "No, that was my revenue." Oh, then you didn't make a million. You didn't come close to making a million.
Arnaud Marthouret:
Yeah. And if the overhead is 950,000, then you make 50,000.
Kim Seldon:
Exactly.
Arnaud Marthouret:
So, in that respect, what do you think is the number one skill, that slacking in the industry, that leads people down that path, skill or knowledge or tidbit of information that people may need to have?
Kim Seldon:
I think we just need to be told from the beginning, if you're going to open a business it must be profitable and it should be profitable in the first year, in most cases, not in every case. I've got a friend who has a huge tech company and he had a five-year plan to be profitable. But for most of us, opening a small professional office, we need to be profitable within the first year. And in order to see if I'm profitable within the first year, one of the things I probably should do is take a salary off the top. I may not be able to take it my first three months in business, but I certainly should be able to take it after six months.
And if I had done that when I first started out, I would've known much sooner that I wasn't making enough money to cover the salary. But not doing that meant that I had to wait until the end of the year when the accountant said, "Oh, by the way, you didn't make any money this year, there's not going to be any salary for you this year." I would've known it much sooner if I'd taken to that earlier. So I think having a plan to pay yourself some amount of money almost from day one is really important.
Arnaud Marthouret:
Yeah, I think so. I'm certainly an advocate of that. I became familiar with the Profit First Method a few years ago, and that was a revelation because that's exactly what they advocate for. It's like put your profit, which is basically a percentage of your revenue aside and your salary first, and then keep the rest for all kinds of expenses. It's very powerful actually.
Kim Seldon:
It really is.
Arnaud Marthouret:
So can you speak a little bit to the disciplines that you teach your students, or however you want to call them, for becoming profitable and running a tight ship?
Kim Seldon:
Well, so the first thing we talk about is to create systems to run your business just like Michael E. Gerber talked about. So you have to have, for every single point on a project, there has to be a system that helps you navigate that point in the project, how you answer the phone, how you sign a client up for the consultation, how you deliver the consultation, what happens after the consultation, what happens when it's time to hire the trades, how do you hire the trades, what you charge for hiring the trades, what's your markup on what you're going to charge for hiring the trades. All of that stuff has to be part of how you show up on day one to every project figured out, so that the clients can then relax and let you run the project. And once I was able to start getting those systems into my bag of tricks, if you will, the clients were responding in a really positive way.
"Oh, we like the way she handled that. She did what she said she was going to do, and she did it on time and she did it on a specific budget. We like that." And then more clients would sign up and want that. And so it took me more than a decade to figure out what all the steps were to running a project from top to bottom. Then Business of Design was born because I just started telling designer friends what I was doing and then little by little, a designer friend would say, "Oh, can you come and talk to my ASID group?" "Can you come and talk to my decorating club?" "Can you come and speak at the school?" And I was spending more and more of my time going to these events for free and teaching people how to do it. And it became untenable at some point. I'm flying to Vancouver. I'm flying to Los Angeles. I'm flying to New York and I'm doing these classes for free. I'm like, wait a minute, this is costing me a lot of money.
I'm teaching people how to be profitable, but here I am spending my own money to fly to all these different locations and teach them how to be profitable. So I started feeling that in my bottom line in my design firm because my design firm was paying for all of these trips to go and help people run their design firms. So finally we said, this isn't tenable, and Business of Design was born. And really it was a way of covering my costs so I could go to New York and teach other designers how to run their business. And it's really pretty much remained that. It's never been my big profit driver, that's my interior design business. I make a lot of money in my interior design business and Business of Design is my passion project, it's my give back.
Arnaud Marthouret:
I see. So you answered the question that came to mind. It's like, which one makes more money for you. But I know it's a very personal question. So how do you teach your clients to break the six figure barrier, because that's the goal you set for them? I know you've talked about the systems and we've touched on that, but is there anything else you want to add to that particular question?
Kim Seldon:
Yeah, first of all, I give them permission to make money. That sounds small, but it's a big thing. In fact, we had a coaching call today, we do it once a month. It's called BOD Live and all these designers show up and somebody said, my client says it's not fair if I charge design fees and procurement fees. So it's like, "No, that's totally fair. You buy a cell phone, you get a phone, you don't get text time and you don't get roaming and if you want those extra services, those are extra services." So first of all, we give them permission to do it, but second of all, I show them how I do it. I open my books to them and I show them this is what I charge my clients. This is what my contract says. This is how I make money.
And so we're unapologetically making money, and we found that as people are willing to share that they're making more money, the bar gets higher and higher. For so many years I dreamed of every interior design professional making six figures, meaning finally at the end of the year, $100,000 of profit. Like, come on, we can do it. Well, we are now at the point where we actually have designers who are making seven figures. So I think it's no small thing to give people a path to follow and to make it happen.
Arnaud Marthouret:
That makes a lot of sense. So in the course of my work, I often bump against, and sometimes internally struggle with the fact that I will relate what you do with a marketing problem that I see all the time, which is the inability to convey the value of the services to the client. And there's many reasons for that, I'm not going to go too much into details. Do you help people overcoming that or how do you think designers should overcome that to become profitable? Because I truly believe that's one of the main impediments to profitability.
Kim Seldon:
I think you're right, actually. I really do. And so what I teach is that I have to portray to my clients this confidence that I have the expertise to run their project from top to bottom. Everybody's familiar with how renovating projects work, and everybody thinks renovating projects go like this. The contractor tells you it's going to be $100,000, but really it's going to cost 200,000 and then it costs 300,000 and it takes twice as long. And everybody accepts that's how it is. Well, we came in and we said, "No, that's not okay. I don't want to be that person. I actually want to tell my client what it's going to cost and how long it's going to take and tell them that I will manage every detail." If you put your trust in me, I can guarantee you it'll start on this day and finish on this day, and this is what it will cost, but that means you leave every detail with me.
And there are clients who are willing to pay for that. There's value in that because the work is complicated. So you just have to have that system that you can rely on and say, this is what I'm bringing to the table. A lot of design professionals think what they bring to the table is, I can make a room look beautiful. That's not a big thing, millions of people can do that. When I say to my clients, "I can guarantee on time, on budget," they say, "Sign me up for that. I'll take that."
Arnaud Marthouret:
What's your success rate on your projects, on being on time and on budget?
Kim Seldon:
Well, 100% actually, because I have a way in which I tell them what it's going to cost once I know what it's going to cost, and I tell them how long it's going to take, once I know how long it's going to take. I went from, in 2000, I would say I had a staff of 15. I had probably a hundred projects that year. I probably made four clients super happy, I made many of them sort of happy and made a whole bunch, not too happy at all. And no client from that year, not a single one ever came back to work with me again. Fast forward to today, I know I make a hundred percent of my clients happy, and almost every single client comes back to me at some point for more work. So that's a big deal, right?
Arnaud Marthouret:
Yeah, and I love your message because it's a very positive one, because a lot of designers are discouraged by how difficult it is to run a business and how some clients can be difficult to deal with. And so I'm glad to hear that there is a possible path for people to take and become profitable. And I know what you offer is probably challenging, even to the people that sign up for your program. So what kind of attrition rate do you have between the people who actually sign up and people who complete and become successful designers?
Kim Seldon:
It's really interesting you say that. I'm not the best designer in the whole world, and I'm sure as heck not the smartest person in the whole world. So the program that I teach is really easy, if you will. It's simple. Follow the steps, do exactly this, it will work for you too. There is a component of having the confidence to put yourself in front of those clients who can afford your services. That is a component, but the fact of the matter is, once you have these systems behind you, you are more competent, you are a bigger player, and you will get better clients. We have a really, really high rate of designers who have completed the program and make a whole lot of money. And we have something like, I don't even know how many, but at least a hundred testimonials on the website of people who say, I doubled my income, I tripled my income. But I would say over the years we launched in 2004, I would say by now we have a thousand testimonials of people who say things like that.
And given that we don't advertise, we're just a small company still, there's three of us, sometimes four of us. It's great. And our mission statement is to transform the industry one design business at a time. And that's really what we focus on, just that one person who's in front of us. If we can help that one person, they'll probably help someone else. And it's gratifying for me to see the changes that have happened since 2004. And I know we've had at least some small part in some of the positive things that have happened.
Arnaud Marthouret:
And that's great. So I have just a couple more questions for you because I think we covered a lot of interesting ground. And obviously people who want to know more can find you. We'll get to where they can find you at the end. Are there any success stories of some of your clients that really stand out to you that you'd like to share?
Kim Seldon:
Oh gosh. We now have a coach in Sydney, Australia, a wonderful one named Jody Carter, I'm sure she wouldn't mind me sharing this. But when she came to us, she was really on the verge of quitting. She was just broken. She said, she can't do it anymore. Her clients just won't get in line. They won't behave. She can't make money, blah, blah, blah. And now today, and I think this is only like three years later, she is one of the people who's approaching a seven figure profitability, is one of the most sought after designers in all of Sydney, and is now coaching other BOD people.
She's just one of so many like that. Literally today we did this BOD Live event, and somebody posted in the chat, "Oh my God, I can't thank you enough. You've changed my life." And that's how it feels. You're so isolated and alone in this business sometimes, you need somebody to say, it's okay. You're going to be okay and you can do this. It's not that hard. The business is hard, but once you have the systems, if you just stick to the systems, you're going to be okay.
Arnaud Marthouret:
That's a very positive note to end on. So are there any parting words of wisdom you want to share with the audience before we wrap up?
Kim Seldon:
Oh, wow. Don't be afraid of your numbers. Just jump into those numbers. You can do it. I know it can be scary. It can feel like this new technology having to uncover and get familiar with my profit and loss statement. It freaked me out, but now it's such a good tool that I use all the time. I know my numbers. I know my profit margin. Do whatever it takes to get past whatever phobias that you have built up over the years, whatever made up stories you have so you can get really comfortable with the money. No matter what business you're running, you have to talk money and you have to talk it with confidence and ease. And so honestly, if I could do it, anybody could do it.
Arnaud Marthouret:
That sounds great. So where can people find you if they want to get in touch?
Kim Seldon:
Oh, businessofdesign.com. That's easy, right?
Arnaud Marthouret:
Yeah, that's easy. What was your favorite part of this interview?
Kim Seldon:
Ooh, what a good question. I love that you started off talking about why people may not have the freedom or the know-how or even the understanding that they can be financially savvy.
Arnaud Marthouret:
That sounds great. So I want to thank you very much for your time and your generosity. I really liked talking to you, and maybe we can have another one of those in a while.
Kim Seldon:
That would be great. Thank you, Arnaud. Thank you so much.