Why Busy Designers Still Struggle With Profitability

Designed for the Creative Mind Podcast

Interior design is one of the few professions where it’s incredibly easy to build a business that looks successful on the outside but quietly struggles behind the scenes.

Beautiful projects.
High-end homes.
A full calendar.

And yet the numbers still feel tighter than they should.

In this episode, Michelle Lynne pulls back the curtain on a common issue she sees when auditing interior design firms: businesses that have grown busy but were never intentionally structured to be profitable.

If you’ve ever looked at your workload and wondered why the revenue doesn’t reflect the level of effort going into your projects, this conversation will help you understand why.

Michelle shares her own experience running a seven-figure design firm, the moment she realized revenue alone didn’t equal success, and the structural issues that quietly erode profitability in many design businesses.

This episode is about stepping back from the day-to-day hustle and evaluating the foundation of the business itself.

In This Episode

You’ll learn:

• Why interior design businesses often evolve into busy but poorly structured firms
• The difference between revenue and true profitability
• How underpricing, thin procurement margins, and unpaid project management quietly erode income
• Why many designers underestimate the time required to deliver a project
• The role emotional labor plays in designer burnout
• The three numbers every design firm should track to understand financial performance
• How improving your business structure can be more impactful than simply getting more clients

Key Takeaway

Busy is not a business model.

A profitable design firm is built through intentional structure: pricing, procurement strategy, time awareness, and clear operational boundaries.

Once the business is designed with the same level of intention as the projects themselves, the entire experience of running a design firm can change.

Resources Mentioned

Design Revenue Audit
A diagnostic deep dive into the financial structure of your design firm, including pricing, procurement, and operational profitability.

90-Day Advisory
Private strategic advisory focused on restructuring the revenue side of your design business.

VIP Intensive
A focused strategy session designed to map out the most efficient path toward a more profitable firm.

Learn more at:
TheDesignBakehouse.com

Next Episode

Next week’s episode explores client red flags that can cost interior designers thousands of dollars before a project even begins, and how to identify those warning signs early.

TRANSCRIPT:

Michelle Lynne (00:01.612)

Hello, my friends, and welcome back to Designed for the Creative Mind, the podcast where we talk about the business of interior design. Not just the beautiful side, not just the photos you see on Instagram, but the real mechanics behind building a design firm that actually works. Because here's something that most designers eventually discover the hard way. Beautiful projects do not automatically equal a healthy business.

You can have incredible clients, amazing homes, a portfolio you're proud of and still feel like something about the business isn't quite working the way it should. If you listen to the last episode, we talked about something I see constantly when I audit interior design firms and that's hidden revenue leaks and they show up inside the design process. You know, the little moments where designers say things like,

It's fine. I'll just take care of that. Or I'm not going to charge for this part. Or the dreaded, it's just easier if I handle it myself. And individually, those things feel small, but collectively they add up sometimes to tens of thousands of dollars quietly slipping through the cracks. So if you haven't listened to that episode yet, go back and start there after this one, because it really lays the foundation for today's conversation.

Today we're actually zooming out because sometimes the issue isn't just a few leaks in the process. Sometimes the entire business model slowly evolves into something that keeps designers incredibly busy but not particularly profitable. And if you've ever had that moment where you look at your calendar, your workload, and your stress level and you think, how am I working this hard and still feeling like the business isn't where I expected it to be? Girl, you are not alone.

In fact, this is one of the most common conversations I have with designers and a conversation that I've had with myself. So today we're going to talk about why that happens.

Michelle Lynne (02:08.054)

Interior design is one of the easiest professions to accidentally build a very busy but poorly structured business. And the reason is actually pretty simple. The work itself is complex. Yeah, the work itself is complex. You know that. Designers, we are doing far more than just designing. We're managing clients. We're coordinating vendors. We're working with contractors. We're managing budgets. You're juggling timelines. We're

we're troubleshooting logistics, we're navigating personalities, and we're doing all of that where we're trying to stay creative and run a business. That combination creates a profession where design naturally becomes the hub of everything.

Okay, the designer naturally becomes the hub of everything. Every decision runs through you, every question runs through you. Every problem eventually lands on your desk and because designers are capable and resourceful people, we just roll with it. We solve it, we figure it out. But y'all, sometimes, just over time, something's settled, just.

happens and that is that the business slowly becomes dependent on the designers constant motion. This is where the trap begins because motion can feel like progress. Okay, but they're not the same thing. When when my interior design firm ML interiors group started gaining traction, I remember a very specific period where things looked really good from the outside. We were getting better projects, larger homes, higher budgets.

more sophisticated, more interesting clients. My portfolio was looking really a lot better. The portfolio was definitely improving. And from the outside, it probably looked like everything was working exactly the way it should, but y'all, I was so tired. I was just internally exhausted. And it's not the kind of tired where you feel proud. It was the kind of tired where I was asking myself questions like, is this sustainable?

Michelle Lynne (04:22.07)

Is this really is like, is this really how running a design firm is supposed to be? Because the workload just kept growing. There were more projects, more decisions, more vendors, more logistics, more site visits, more coordination.

and more on my calendar. It just kept filling up and filling up and filling up.

Michelle Lynne (04:48.822)

And at that time, I realized that one of the biggest misconceptions in the design industry, probably in other industries as well, but that is that revenue equals success. Like I was proud to say I was a seven figure interior design firm, okay? But revenue does not equal success. Revenue simply tells you how much money has run through your business. It doesn't tell you what it costs to earn that money.

Let me say that again, it does not tell you what it costs to earn that money. And that distinction matters a lot because I can speak from experience. You can have a design firm doing 700,000s of dollars a year, okay? A million plus dollars a year and you can still feel financially squeezed. You can have projects that are like ongoing and they're constant and they're beautiful and creatively they're very rewarding.

but it still feels like you're working far harder than the numbers justify.

Why? Well, because the structure underneath that revenue might not be working efficiently. Likely it's not. It could be that the design fees are too low relative to the complexity of the work. Okay, that's what we talk about. What I do and what I teach is we charge by the square foot based on the layers of complexity in the room. So design fees are going to change

based on the complexity of the project. OK, maybe procurement is happening, but the margins are thinner than they should be. We talked about that in the last episode, your margin should be a minimum of 42 percent and margin and markup are two different things. Markup. 75 percent or more gives you a 42 percent margin or better. OK, so if procurement is happening, you're buying furniture wholesale.

Michelle Lynne (06:52.974)

If your margins are thinner than they should be, you're not making the money reflective of your work. Okay? Are you doing hours of project management that were not built into the pricing? Construction administration.

Maybe the firm is absorbing logistical responsibilities that quietly consume time and it doesn't generate revenue.

Okay, here's the tricky part is that from the outside none of this is visible. Projects are happening, furniture is arriving, installations are being scheduled, Instagram gets beautiful photos, your portfolio is growing, but you're stretched thin.

I remember a moment years ago when someone said something to me that really stuck and they said, you must feel amazing. Your firm is so busy. I can still picture where I was standing. I was in my old studio. Okay. I smiled. I said, yes, because I knew from the outside it looked amazing, but internally y'all, I was thinking something very different. What, you know, like.

I can't even say it on this podcast. I thinking a lot different because I, but I knew how much effort it was taking me to maintain that level of activity. And I had a team at the time. It wasn't just me. Okay. But this is when I started realizing something really important. And that's that design firms don't automatically evolve into profitable businesses. They evolve into whatever structure the designer is going to tolerate. Guilty.

Michelle Lynne (08:31.232)

OK, guilty on all accounts. So I'm here to tell you, if you tolerate underpricing, the business grows around that underpricing. If you tolerate unpaid project management, the business expands around that unpaid project management. If you tolerate scope creep.

If you tolerate low margins, the business is going to expand around it. The structure of the firm slowly shapes itself around the boundaries or the lack thereof that the designer allows.

and eventually you're gonna reach a moment where you have to step back and ask a bigger question. And it's not, do I get more clients? But is the structure of my business actually supporting the work that I'm doing?

or actually it's more along the lines of is the structure of my business actually supporting the level of work that I'm doing?

Michelle Lynne (09:38.306)

What I've seen is that most designers track revenue, but very few track profitability per project. I actually offer a...

software program to my clients. It's called Profit Mixer. And in that software, it's project management tied into QuickBooks. Actually, it's QuickBooks tied into project management. And we have all of our steps broken down into this program. OK, but I have built in a profitability per project report that is not optional.

because every designer should be tracking profitability per project.

Additionally, fewer designers that I've ever seen track the time to deliver that revenue.

Michelle Lynne (10:36.47)

So there are three numbers that every design firm should know. Okay, first it is that revenue per project. Okay, not what the client spends, but what the firm earns. Okay, so it's actually profitability per project. The second is your procurement margin.

Okay, when you're purchasing furniture for your clients and you're buying it wholesale, this can be incredibly profitable when it's structured well. Okay, or incredibly draining when it's not. And then the third is time. Designers consistently underestimate how much time goes into a project. Are you tracking it? Even if you're charging by the square foot, you should still be tracking your time.

Okay, because there's vendor communication, client communication, site visits, order follow ups, damage claims, installation preparation, the design presentation, okay? The acquiring of the samples, the returning of the samples. When you start adding all of these hours up, the picture becomes much clearer. At ML Interiors Group, I eventually had to start asking a really pretty simple question.

and that is does this project compensate the firm appropriately for the complexity involved?

Michelle Lynne (11:59.946)

Sadly to say, part of my learning curve was that no it didn't and I knew something needed to change. Okay pricing, process, expectations, yes all of them needed to change.

Michelle Lynne (12:19.234)

You know, I don't have to tell you this, but designers care deeply about the client experience, right? We all do. And it's wonderful, but it creates this trap for us because when something goes wrong, our instinct is to fix it, even when it's not technically our responsibility. Okay, what I mean by that is maybe a vendor misses a detail. We smooth it over. A contractor has a question. We jump in.

A client asks for another option and we redesign. None of this feels unreasonable, not in the moment. But over time, over moment, over moment, over moment, it creates a business built on emotional labor instead of structure.

How does that land on you when you hear that? Emotional labor, because emotional labor is exhausting. It requires constant responsiveness. Kind of reminds me of my seven-year-old. Like, she needs something all the time. Okay? Like I only have enough to go around for a seven-year-old, not my clients now. Constant responsiveness, constant availability, constant problem solving. Eventually the business becomes dependent on your...

you, the designer's personal tolerance, rather than clear systems.

That is where burnout, that's where it began for me. And I've seen that's where it has begun for other designers that I've coached over the years.

Michelle Lynne (13:54.286)

So as designers, we spend our careers designing beautiful spaces.

That's exactly what I was doing. I was not intentionally designing my business. But what I've learned from experience, as well as from coaching hundreds of other designers, after my own reformulation of my design firm, and that is that the structure of your business determines everything. It determines your income, your scalability, your growth, your stress, your joy.

The structure of your business determines everything.

Michelle Lynne (14:38.06)

When I work with designers in either my VIP intensives, my 90 day advisories, any of the audits that I do, this is where we start. We step back and we evaluate the business the same way we would evaluate a renovation. OK, or the decoration of a completely jacked up room or a completely empty room. What works? What doesn't work?

What needs reinforcement? What needs to be rebuilt? What needs to be removed?

Michelle Lynne (15:12.108)

I've been going through this whole marketing focus over the past few months. You've recognized it in the podcast. You've recognized it in my coaching. Okay. But I'm also here to tell you that sometimes profitability isn't about getting more clients. It's about creating a business structure that actually supports the level of work that you're already doing.

So if you have a good pipeline of clients, but it still feels like you are not making the money that you should be for as hard as you're working, revisit your business structure.

Michelle Lynne (15:54.188)

This is exactly the work that I do inside our revenue audit, inside my VIP intensive one-on-one training, my 90 day advisory, private training, private coaching. Okay, it's not surface level advice. It's real business diagnostics. Ooh, that's a mouthful. Real business diagnostics.

Michelle Lynne (16:19.522)

We look at pricing structure, procurement models, project profitability, operational bottlenecks, team structure.

Michelle Lynne (16:30.732)

the places where revenue just quietly slips through the cracks. Because sometimes the difference between a stressful design firm and a profitable one isn't working harder. I like to say it's efficiently lazy, okay? You take the structure underneath the work and you set that up so that it holds itself and it holds firm.

You just have to touch point it on a regular basis.

So if today's episode made you pause and think about your own firm, babe, that's a good thing. Awareness is where that change begins. And I just wanna leave you with this, and that is that busy is not a business model. Structure is. Our hustle culture, okay, or our society oftentimes glorifies being busy.

I would much rather make a bucket of money and not feel stressed out busy. I'd rather make a bucket of money being productive and joyfully busy. So once you start designing the business with the same intention that you bring to your design projects, everything, everything begins to Step back.

Take everything out of your business and examine do you need to put it back in. Okay, and next week we're gonna talk about something equally important. And that's the client red flags that can cost you thousands of dollars before a project even begins. We're gonna talk about how to spot them early. So, I'll see you next week.