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participation activity:form of ownership research/discussion•buying an existing business (1)•sole proprietorship (2)•partnership (3)•corporation (4)•dealerships (5)•joint ventures & associations (6)
…using your textbook & other sources, read about and research your assigned business type…come to class ready to discuss your findings
INTD 55 business practices
planning for profit and growth
Understanding who we are, what we are capable of, and how we can best perform within the
business world is key.
planning for profit and growth
designers need to measure their love of the design process against the time spent and the money earned
developing a firm—•understand its best abilities•realize what you have to work with & go after work that is appropriate for your team•missing spots filled by consultants•key areas covered by principals of firm•review market to determine needs—know community dynamics
planning for profit and growth—planning
•establishes priorities•provides a map and direction for activities that lead to achievement of goals•makes decision making simpler—provides a tool to measure against
without a plan it is easy to make no decisions or to be pushed & pulled by events
be proactive instead of reactive
planning for profit and growth—setting goals
deal first with personal professional goals & then financial goals of company
personal goals:•do they fit realistically in the interior design field? how long do you want to stay in the field?•where do you see yourself in 3 years?•what annoys you? what make you happy?
•write down goals•organize in order of importance•readdress goals every 3-6 months
planning for profit and growth—setting goals
business goals—•define clearly•possible goals might be growth, increased profit, increasing the rate of profit, increasing market share•consider where you want to be in 5 years•be flexible
procrastination can keep you from reaching goals
mission statement used as a constant daily reference helps keep you on the right track
formulating a business plan
1.type of business2.location3.product4.facilities required5.marketing plans6.your competition7.available funds8.revenue expectations9.expense projections10.administrative structure11.support services & staff12.your time schedule
planning for profitfactors that affect your profits
liability is a huge issue these days—insurance can reduce your cash losses
job processing—the faster a job can be completed the more profitable it is
accounts receivable expected to be paid within 30 days—more realistic within 60 days
making each job extremely different make profit projections difficult—firms that specialize tend to be most profitable
planning for profitways to increase profits
1.increase total sales or amount of income secured by firm2.increase the amount of profit or markup
growth is really the key to profits •should be a gradual process •should occur by improving services
planning for profitanalyzing your firm and its direction
important to take the time to do analysis of projects every 5-10 years.
to make analysis easier, document each project consistently & with the following information:
1.name of the project2.name of the client3.location of the project4.type of construction5.size of the project6.type of services the firm provided7.design accomplishments
planning for profitanalyzing your firm and its direction
8. size of the fee9. profit of the project10. percentage of profit on the total project11. source of the job12. expected referrals13.publicity potential
how can you use these projects as a base foracquiring new projects over the next 5 years?
planning for profitevaluating your team
once you define firm’s direction then it must be determined whether your staff or team is properly oriented to handle objectives—evaluate each & every member and keep evaluations/lists of abilities
evaluate any top-level consultants that you partner with as well—they may be capable of working with us in ways we are not aware of
selling your business
when you open a business, you should know how long you are going to keep it and how you are going to sell it
if you are making the investment & going to the effort of establishing a working company it should be something valuable
ask yourself before you start how can you create a company that has value, could continue, and be saleable?
selling your business
If you plan to sell in the next few years:•try to show as much profit on your books as possible•spend time developing your clients & establishing contracts•organize copyrights or patents•update mailing lists•reexamine inventory with an eye toward eliminating what is not current•hire a good appraiser to evaluate your building & various advantages of property location•organize your business management system so it can easily be taken over•review workforce and try to line up best people possible•take stock of your financial situation—with your accountant, determine how much capital is required to run the business
participation activity:mission statement
…research & read mission statements from successful businesses and other institutions…brainstorm what you want in a business, combine this with what you have found from your research & create a rough draft of your mission statement
…be prepared to discuss your mission statement in the next class