A Declaration of Independence

Take a look around and you might discover that one of the fastest-growing professional segments in the kitchen and bath industry is that of the "independent kitchen and bath designer."

Fueled by kitchen/bath industry growth and consumer demand for specialty design, the trend is also largely due to a growing number of designers who are feeling the need to have their own business.

What is an independent kitchen and bath designer? It's best described as one who owns a firm engaged in kitchen and bath design, and is truly independent from normal kitchen/bath retail channels, including big-box merchandisers, dealerships, distributors and others. In general, independent designers don't have showrooms - other than the few using their own home's kitchens and baths as showcases for products and design ideas.

While numbers are hard to come by, growth in the independent designer segment is apparently driven by a number of key factors. Kitchen and bath market growth, for one, provides a chance for those seeking their own firm to meet consumer demand for specialized services. An independent kitchen and bath designer can offer consumers several advantages not offered by the traditional channels. For example, traditional channels are committed to selling specific product brands, while independent kitchen and bath designers can offer straight design-only packages, including generic product specs. Consumers can then take the design packages and shop wherever they choose.

At the same time, it seems clear many designers who aren't satisfied with their current job are looking at the idea of going independent. Many independents have worked at one time or another in one of the traditional kitchen/bath retail channels. Others, including interior designers, architects and even installers, have gravitated from allied professions, or even unrelated careers.

Why are people choosing to leave the security offered by working for someone else? While there's no clear-cut answer, most independents, it seems, have at least one characteristic in common: The urge to have their own business is fueling their desire to move on. Being their own boss, setting their own hours and business policies, and controlling their own destiny seems far more appealing - despite the necessary personal and financial commitment.

PLANNING FOR SUCCESS
Simply owning your own business, however, does not constitute a blueprint for success. Nor is ownership always all that it's cracked up to be. In fact, without a well-thought-out, well-documented business plan, for starters, an independent design business can be doomed right from the start.

Gretchen Edwards, CMKBD, of Telford, PA, was a trailblazer in this segment, having started her own independent design practice in 1986. Edwards was motivated by the excitement of being her own boss, setting her own hours and delivering more personalized service - not to mention making more money than she was by working in a more traditional retail business.

But getting started, she says, certainly involved a learning curve.

Edwards admits that, in retrospect, she would have focused more on networking with local professional women's organizations, outside the kitchen and bath industry, to help her get her business started. She's also quick to note that, if she were to do it over, she'd spend more time developing a business plan that addresses provisions for lean economic cycles.

She also feels that maintaining an independent design practice requires a very real form of discipline. "Working for yourself does have its advantages, but one must have the discipline to handle the intermingling of business and leisure hours," she explains. "If you want to go skiing, realize that the work will still have to get done - sometimes into the late evening hours or on weekends, too. Manage your time so work can be accomplished and yet you still have a life."

Edwards gets her clients from referrals. However, she also has a unique specialty in that she works with the State of Pennsylvania in conducting surveys to evaluate the living spaces - including kitchens and baths - of people who have accessibility needs. She's become a well-known expert in this field, and is a speaker for trade associations and colleges on this topic.

Kathy Lee Selvaggio, CKD, of Zionsville, PA, became an independent designer in 1991 and still maintains a design practice. She tried working for other firms, but felt that, as an independent, she could bring a more focused level of service to her customers - one that would give her complete control over a project.

"Working alone, I'm able to control all aspects of a project and decide how much or little of my services a client may need," she observes. "My job duties include consultation, design, drafting, ordering and specifying materials, pricing, overseeing and procuring the services of sub-contractors, and acting as a liaison between people involved with the project, as well as providing materials and services that my clients may not be able to obtain from other kitchen/bath dealers."

She says her clients prefer having the ability to work with someone who can handle all their needs within a specific residential space or whole-house project.

"It's a 'one-stop' experience for my clients. I charge a $75 consultation fee, which includes a discussion of the client's wants, needs and options. We review my portfolio to decide the project's scope. I also give them homework to do. I ask them to think about the project, and collect photos or visit showrooms to get ideas," she notes. "Then, when we meet again, we have a better idea of what they want. Some clients are relieved to have someone able to assuage their fears and indecision by pulling all aspects of the project together."

At the time she decided to become an independent kitchen and bath designer, Selvaggio had small children at home, and wanted the flexibility of setting her own hours. Like Edwards, she stresses the importance of having a business plan and advises "having a specialty - one that capitalizes on strengths and unique talents - can provide an edge over other industry segments."

Selvaggio has an interior design degree and specializes in designing other rooms, like media centers and home automation, along with kitchens and baths. She also teaches color, as well as other design subjects, at a local NKBA-endorsed college. All of her business is derived from referrals; she's tried local advertising, but has not been happy with the results.

Selvaggio cautions would-be independent designers to be keenly aware of time-management issues before plunging into the work. It's necessary, she says, to be able to balance "the responsibilities of designer, household obligations, and the duties of a soccer-mom, especially if the business is run from the home. Sometimes, the juggling can become tricky."

Erik Mehr, whose successful design practice is located in Avon By the Sea, NJ, entered the kitchen and bath industry nine years ago, after an unfulfilling career as an attorney. After working at a dealership for seven years - where he developed his own leads, generated his own business and serviced his customers directly - he decided to become an independent designer. Taking the step was easier because he already "had his financial house in order" and a loyal customer base. Even now, he keeps asking himself, "Why did I wait so long?"

Mehr offers a free consultation to his builders' customers "because they have to buy from me; they have no other choice." He also offers free consultation to prospective clients who've been referred to him from at least two previous clients. If there's someone who contacts him other than through his normal channels, he uses a qualifier to determine if they'll be able to work together.

"I ask them to provide me with dimensions or lineal footage of their existing kitchen. Then I tell them that the average costs for cabinetry and installation range from $800 to $1,000 per lineal foot. (The estimate is based on average cabinet costs and an installation rate Mehr has worked out with his installers, based on a per-cabinet install and lineal footage of moldings.)

"This will help the clients to qualify themselves," he says of the estimates.

GETTING STARTED
What does it take to start an independent design practice? Generally, most new business ventures are up against strong odds that favor failure. Many new-business failures are due to the lack a sound business plan, combined with a lack of enough capital to cover the start-up and first few months of business.

A business plan doesn't have to be complex. It need only spell out the goals of the business and how they're going to be met, in simple terminology. It must also have clear financial and marketing direction as to where, when and how the company will get its income. Start with a pro-forma statement and a best-guess estimate of income and expenses. That will spell out future profit or losses, and become part of the business plan.

A separate start-up plan must also be prepared, detailing all initial expenses. Though the start-up expenses must be part of the total capital needed to start a business, it's helpful to have these expenses segregated so they're not used in projecting the normal cash flow. Many will be one-time expenses.

Don't discount these types of start-up costs when establishing a new business. Typical start-up costs include basics like business cards, stationery, a computer and other office equipment, design software, telephone and fax lines, business liability insurance and health insurance - to name a few. A Web site, which is relatively inexpensive, would also be nice to include in the start-up since it establishes that a business is current with technology and is available 24/7. If the business is to be run from home, then there's no need to plan for office rent. In fact, an income tax deduction can be taken for an in-home-office. Check with an accountant regarding how much can be deducted.

Other costs include such items as cars and their associated expenses, advertising and professional trade association memberships.

The pro-forma, which is actually a forecast projection, helps to discern the amount of working capital necessary to cover the peaks and valleys most businesses go through. Business Week magazine has reported that if a business is going to fail, it will typically do so within the first three to five years. It also reported that the chance of failure is greater if a business cannot steadily maintain at least six months of working capital. (Working capital is the calculation of current assets less current liabilities.)

This means that if a business had no income for six months, it would still be able to operate, and its survival chances would still be good. This shouldn't be taken lightly. If someone start a business, they should have clients ready to buy, or have other means of income to support themselves, for at least six months.

It's also crucial to recognize that you need a plan if things don't work out. Every business plan should contain an "exit" strategy. The plan itself must have timelines calling for specific goals to be met by certain dates. If those goals are not being met, there must be steps in place to end the venture.

A business learns very quickly if it has a future. Profits are the true test. No one wants to be in business only to break even. If managed properly, the escape plan will let independent designers end a business and come out intact. Never risk personal assets in an effort to "hang on." Numbers do not lie. If they are not meeting your goals, pull the plug. You should have enough money in your escape plan to pay your creditors and sustain yourself for a few months while you look for other work.

GETTING PRODUCTS
Where do independent designers get their products? Some obtain products directly from manufacturers who have specific programs for independents. Under these programs, designers purchase and provide materials and services the same as a dealer would. Some designers work with small custom cabinet makers, while most have formed strategic alliances with kitchen and bath dealers, distributors and big-box stores.

Alliances generally work well for both the independent designer and the retail supplier. Designers can take their clients to a showroom and work with the showroom's staff almost the same way they would if they were employed by the showroom. It's great for the showroom owners because the independent designer is bringing in work the showroom may not have otherwise obtained.

Dealers will usually offer to sell products at a discounted rate, allowing independent designers to make a commission on the products. When combined with a design fee, designers can earn profits similar to those made by dealers.

However, care must be taken to remain competitive. If the design fee and product commission are too high, neither the designer nor the showroom will get the work.

Some dealers may view independents as a threat because they don't want to deal with a middleman, or pay a commission that averages between 10% and 25%. But, dealers with vision will welcome new channels for their firm, and find ways to make them work.

GETTING PAID
Independents can also choose several billing options. Hourly fees are common, and vary from $75 to $150. The hourly fee can include a basic consultation to discuss the client's wants and needs and a general outline of what steps are needed to finish a project.

Another option is to charge a retainer that would be applied toward purchase of products and services along with the necessary drawings and specifications, making the designer the supplier. The flat-fee option is another choice. The designer will charge a flat fee for a project's design and specs. These fees, based on project size and complexity, usually start at $1,500 for an average kitchen.

One other option is a barter arrangement. Selvaggio, for example, sometimes will barter her design services for services she may need.

Any of these fee structures can be combined with others or used alone. But the key is to make sure there's a signed contract before any work begins, including an hourly consultation. Clients should also be clear about the services to be provided.

With the right guidelines in place, a career as an independent designer can be financially and emotionally fulfilling. But would-be independents must realistically look at the demands before making a decision. KBDN

Morton Block, CMKBD, IIDA, is an award-winning designer and training consultant, author and educator who’s been in the kitchen/bath industry for 30-plus years. His Kennett Square, PA-based firm, Morton Block Associates, designs retail showroom spaces and trade show exhibits, and contributes to product development projects for kitchen/bath manufacturers. An NKBA University instructor, he teaches CAD design at Lehigh Carbon Community College. He can be reached at mortonb@comcast.net.

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