All businesses that employ one or more individuals must, by law, have an employer’s liability insurance policy. This covers the business in the event that an employee seeks compensation as a result of having an accident at work, or falling ill. The minimum acceptable level of cover is £5 million, but £10 million is the typical policy value. If your business does not comply with these rules, you could be fined £2,500 per day by the Health and Safety Executive (HSE). Your insurer will provide you with a certificate, and it is a legal requirement that you display it where all employees can see it.
Fact: Over 600,000 workers suffer a non-fatal accident each year at their place of work.
Source: Health and Safety Executive
Professionals who offer their opinion in the course of their regular duties should take out professional indemnity insurance. As an interior designer, you fall into this category. When you work on a project, you are advising clients as to what they should or need to do in their homes or commercial spaces. In theory, they could bring a lawsuit against you in the event of an accident, copyright infringement, or negligence. Professional indemnity insurance will cover legal fees and any compensation a client may claim as a result of complying with your professional recommendations. A typical policy will provide cover between £50,000 and £5 million.
If you plan to rely on your business as your sole source of income and you do not have a cushion of savings or other source of financial aid, it is a good idea to consider taking out an insurance policy that covers you in the event that injury and illness prevent you from working. Finally, if you are using a car or other vehicle as a means of accessing the site on which you will be working, you must make sure that your motor insurance providers are aware that you are using the vehicle for commercial purposes.
How much to charge clients
Interior designers charge their clients around £50-150 per hour. This figure will depend on the complexity of the project, the socio-economic status of your local area and your perceived value. However, it is up to you to decide on the best way to break down the costs and come up with a final number. If a client has hired you for a minor project, such as a redesign of a single room, it is reasonable to charge around £500-750. Alternatively, you can charge as a lump sum, with the client paying half the bill up front and the remainder upon completion. Designers who use this method take their usual hourly rate and then multiply it by how long they think the project will last. Until you gain a reasonable amount of experience, you will find it hard to devise an appropriate estimate.
Although established designers tend to command a higher rate than those new to the industry, clients are paying for quality rather than the number of years their designer has worked in the business. If you have a strong portfolio and can fulfil the client brief, charge a reasonable amount for your time. Remember too that some people are more likely to believe that a product or service is worth more money if the rate is higher. When you decide on what your specialist area will be, give some serious thought as to whether your idea is truly sustainable. For example, if you are thinking of specialising in interiors for students, you are unlikely to make much of a profit, because this demographic are often low on funds. Draw up a profile of your ideal customer. Where do they live? What kind of property do they live in? How much money do they have to spare? These notes will help you to target your preferred clientele.
All successful, ethical businesses need to keep records and an interior design business is no exception. Keep a detailed diary of appointments, your daily activities and any professional activities that occur outside business hours, such as attending conferences and trade shows. If you are charging by the hour, a client is within their rights to see how you have been spending your time, so be prepared to show them clear, professional-looking records. The most important records you will need to keep are those pertaining to financial matters. Track your income and expenditure, as this will make submitting your tax return every year (the deadline is in January) much easier. If you find the process of keeping financial records to be stressful, hire an accountant who specialises in providing accounting services to small businesses. They can also advise you on how to minimise the amount of tax you pay on your income, by taking into account business-related expenditure such as equipment, computer applications and travel costs. You can use any record-keeping system you like, as long as it is accurate and clear. However, you must use the Government’s online system when submitting tax returns.
Employing other people
If your business is successful and you wish to hire other people, it is essential that you follow the guidelines set out at https://www.gov.uk/employing-staff. You will need to ensure that you pay staff the National Minimum Wage or higher, that you run checks to make sure they have the right to live and work in the UK, that you have in place suitable insurance and that you register as an employer with HMRC up to four weeks before paying staff for the first time. You may also need to enrol staff into a workplace pension scheme. Finally, you will need to give all employees a clear written statement of employment if they are going to work for you for a period exceeding one month.
Before you take someone on as an employee, consider whether there is another, simpler means of meeting your business’ needs. For example, you could pay self-employed freelancers and outsource elements of a project that you do not enjoy or do not have time to do. This is often easier than recruiting someone as an official employee.
Health and safety legislation
Whether you are self-employed as a sole trader or working in a company with others, you need to abide by health and safety legislation. The Health and Safety at Work Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015 states that if the work you do poses a potential or actual threat to other people, you need to apply the 1974 Act when carrying out your business operations. You will therefore have to assess potential risks in the workplace and put in place processes that mitigate such risks. This is a complex area, so it is worth taking the time to read the official guidelines issued by the HSE at http://www.hse.gov.uk/self-employed/what-the-law-says.htm.
How to advertise your business
Once you have decided to start a business and know exactly what you have to offer, you need to make sure other people hear about it. The very best advertising is word of mouth and client recommendations. Build a reputation by taking on a couple of small, low-cost projects for friends, acquaintances and family members. If you have been interested in design for a number of years, they will probably already have solicited your advice. Offer to overhaul a space inside their home for a low fee, in exchange for portfolio photos, enthusiastic recommendations to friends, or both. Hire a professional photographer to take photos for your portfolio. This will show off your work to its full advantage.
A website is also essential for the modern interior designer. It should be aesthetically pleasing, easy to navigate and showcase your previous work. You should include high-quality photos depicting a range of rooms you have designed, along with testimonials and a list of services you provide. Remember that those who need to discover your website are people looking for interior designers in your area, so do all you can to rank for relevant keywords such as “interior designer based in [your town]”. If you don’t know the basics of search engine optimisation (SEO), hire someone to create and maintain your website. Social media can also be a useful tool. For example, if you set up a Twitter or Instagram account for the purpose of sharing your latest projects and thoughts on design trends, your followers may include a few potential clients. Your website and social media profiles should carry a consistent tone, or “brand”.
You can also take out advertisements in your local business directory or in the back of a magazine, if your budget is sufficiently large. Remember that interior designers do not necessarily have an eye for graphic design, so if you are going to submit advertisements to publications, hire a professional to do it for you. It will save you time and guarantee you a good result.