098: How to Stop Worrying About Your Interior Design Business
Michele 00:01
Hello, my name is Michelle, and you're listening to profit is a choice. Joining me on the podcast today is Katie Baldwin, the founder of Katie Baldwin Designs out of Lakeville, Connecticut. Katie is an awesome designer who has started shifting her business just a little bit to focus on some of the areas that she really loves. Instead of doing what she thought she had to do, she's following her heart, her strengths, and skill set, and finding that there's so much value in that, but joy that has been returned to her. She’s also found really great opportunities for collaborations with other professionals.
And so I hope that you will enjoy listening today. Maybe take a step back and look at your own life and your own business. Ask yourself where you're doing what you think you have to do, maybe where you have an opportunity to do what you want to do. Enjoy the podcast.
Every day empowered entrepreneurs are taking ownership of their company's financial health and enjoying the rewards of reduced stress and more creativity. With my background as a financial software developer, owner of multiple businesses in the interior design, industry, educator, and Speaker, I coach women in the interior design industry to increase their profits, regain ownership of their bottom line, and to have fun again in their business. Welcome to profit as a choice.
Michele 01:32
Hey, Katie, welcome to the podcast.
Katie Baldwin 01:34
Hi, Michelle. I'm so happy to be here.
Michele 01:37
Oh, I'm thrilled to have you here. So before you jump in and tell us everything about yourself, I just want to point out when you and I met. We met for the very first time, face to face, and we were in line. You came up to me and started talking to me about a podcast episode that I had done, one that you'd listen to. I just remember, I don't know if I ever told you this, but I was looking at you and thinking that you seem like one of the sweetest women I've ever met. You just have a sweet face and a glow about you. That immediately made me thin, oh my gosh, she's so sweet. And then I got to see you. I don't know, maybe a week and a half later at High Point, market. I think we were in the Crabbit show room. I was in there doing a seminar for my DOMA. You came and listened, and we got to talk again. I was like, oh, I like her. Then, when we started connecting more and more, and coaching, working together, we've been able to assist you with your business. It has been a super, super big pleasure for me. I'll tell you. Some of my best clients have just been of a similar personality, just kind and generous and warm. It makes you want to spend time with them. So I clearly have an ideal client.
Katie Baldwin 02:57
That's awesome. Thank you. I felt the same way about you. When I met you I knew right away when I saw you on that stage that you're someone that I wanted to work with. Someone that could help me take my business to the places I wanted it to be. I found you so approachable, and I really enjoyed how you stood on that stage and said, do not apologize for being profitable. I always felt like I was apologizing at that point. It's only been a year; it feels like a lifetime ago in my attitude and the way I ran my business. That was such a pivotal moment for me. Do not apologize. I was apologizing constantly.
Michele 03:38
As you know, it's so interesting. That was certainly an unscripted moment. None of what happened on stage, I would say for all of us is, as far as I know, my recollection, none of us had anything written out. It was a very organic conversation the way that LuAnn pulled us all together, asking me questions and answering and so totally unscripted, but I just remember, like my heart started pounding in that moment because I could tell from the questions. Of course, I've been in this industry for 20 years, and I have coached for quite a few and then educated 10 years before I even started coaching. So absolutely was able to hear people, especially women, constantly apologizing for the choices they were making. It's kind of like, ah, we got a snob, and I remember just standing up and going, stop apologizing, you have the right to make money, don't do that. Cut it out, go earn your money, feel good about earning your money. There's not a man in the world who walks around who's got any sense about him who goes I'm so sorry that I'm making money off my business. They don't do that, and we don't need to do that either. I probably got more comments from that one sentence. I mean, it was like a highlight for many people, because they started reflecting and realizing that there was a lot of I'm so sorry. I'm sorry. Even if we don't say it, it's an attitude or a thought process that we almost need to apologize for being successful and profitable and charging what we need to charge and doing what we need to do.
Katie Baldwin 05:11
So true. When I think of that feeling I had in that seat, I was still at the point in my business where I was explaining to clients why I had to mark up every purchase. I mean, I'm embarrassed to even say what I was marking up like 10-15% of the time on product purchases, and then again, apologizing for it. I walked out of your specific speech and then the whole Lewin experience. So much more confident. It was like I had a new pair of glasses on.
Michele 05:41
I love that new perspective. Absolutely. So, Katie, tell us a little bit about how your business started, and then tell us a little bit about what you're doing today. Because I know one of the things we're going to talk about is kind of like your metamorphosis right now and how your business has shifted and changed, and what were some of the defining moments that created that change?
Katie Baldwin 05:59
So interior design is my second career. Just to give you some background; I spent 17 years in the fashion industry. I went through the executive training program at Bloomingdale's, and then I worked for a few different retailers, including the Gap, Ann Taylor. So I come from the corporate world where I owned a business, and I ran a business, had a whole team between planning and distribution. I have a business background. When my last company, Claiborne, and after they closed, we were all laid off and given a package. I just decided I needed a break. I was burned out working, New York at the time. I took a few months off and took a part-time job with an interior designer, literally just needed to fill my day while I was taking some time off. This gave me a little spending money, and within two weeks of working for this designer, who's still my mentor and close friend, I knew I’d found my second career. I was in love from the start. A lot of my project management and business skills from that previous job applied right away to the position she ended up hiring me for, which was a project manager. Very soon after I dove in, I started taking classes at New York School of interior design, and the Institute of Classical Art and Architecture. I was a sponge for knowledge and information, and took as many courses as I could. About five years after working for Robin Bell design, I started on my own was, you know, small at first, pillows and a slipcover here and there. About three years ago, I actually opened my own design studio. I have one or two people working for me part-time right now. And I offer full-service interior design.
Michele 07:41
You know, it's so interesting. I just interviewed Kara Cox on a prior podcast; I'll link that to the bottom. But she was in fashion, worked in New York and did the executive training for Saks. It's like your beginning stories are so similar. And then. So then she left before and moved on and started working for a designer and then went out on her own as well. So just very cool. Yeah, very interesting parallels to see between the two of you there. All right. So you started your own business three years ago. My question to you is this. You had a good, I would say, some business background, maybe not a business degree, but you had it You certainly had a business background from all that you'd learned with project management. Did you start with a full-blown business plan or a more like, say, maybe a business idea, loose ideas of what you wanted to do? Like how defined were you when you started?
Katie Baldwin 08:44
Not at all. I am the opposite of what you would do. Like if you had hired me from day one. Everything I gave you probably would have said no, no, no. Let's get a plan together. I did not have a strategy.
Michele 08:56
I didn't have one with my first. Remember. It was only when In 2009 I went into a partnership for CHF, we had a very defined plan. And then when I did Scarlet Thread Consulting a very defined plan, my very first one was loosey-goosey. That's why I learned from all the mistakes I made to share with everybody.
Katie Baldwin 09:15
That's really what it was. I mean, again, because I had the business background, I had an idea of based on the income that I was making, how much I would need to sustain my own personal bills. Then my overhead as far as hiring someone part-time, my sister had just gotten laid off at the time and was able to give me a few hours a week to help support me in my home office, which was an old bedroom we converted and I was able to start. I had a credit card, and I started figuring out how to buy client fabrics and purchases and then pay them back quickly when funds started coming in. I had no software; everything was Excel and Word. And then, over time, I adopted a studio designer because that's what my old my old firm worked with and what I was familiar with. But there was no plan in place I learned as I went and made a lot of mistakes that I've learned from.
Michele 10:09
One of the things that when you and I started working together last year in 2019, we were having a conversation, and you had come to my retreat, right big mastermind retreat that I had. I remember we were a very small group of people. We were in the Isle of Palms. In a beautiful, beautiful home, you know, it was super chill. We were working, but it was chill. I remember sitting at that table, and I was encouraging all of you to do what you love to do. You had started to work around the idea of apologizing for charging, all the way back in the April timeframe. When you did Lewin Live in and some of the other things, and we start working through that. But you were then also almost, at least this is how I remember it, you were apologizing for the parts of business that you enjoyed more than others, or that you excel at that more than others. And you were apologizing for them. Because in the grand scheme of how many interior designers present their work, they present that the design piece and they only want to do an entire house at a time. And if it's not done with the highest of all budgets, that they don't want to participate. I mean, I'm not saying that's what everybody says. But that is a prevalent comment in the industry that it's got to be the cream of the crop the top of the top and it's got to be photographable. Or I don't want to touch it. And I am not saying that some businesses cannot sustain that, but not every interior design business can sustain that particular model. But that model was kind of held up for what Whatever reason in front of you as legitimizing what designers should want, that all designers should want that, that should be the goal for all designers. It's not that you wouldn't take that. It's not that you haven't done that, but you found joy. You really found your joy and your excitement in the project management piece, and window coverings. You had earlier that year gone to the custom workroom conference that Susan Woodcock puts out, you had started digging into a lot more to do with the window coverings and the pillows and the soft furnishings. That area and project management were two areas that you were finding that many designers don't love, don't enjoy, and it bogs them down. And I remember sitting at the table with you and you almost being apologetic The things that you really like to do wasn't what everybody else likes to do. And then you said it almost in a way of that made you less of a designer or made your firm less than. Do you remember that?
Katie Baldwin 13:13
Absolutely. I felt that for so long, I was constantly apologizing for some of my skills. Quite frankly, I am really good at creating. For example, in the project management sense creating the calendar for the team, managing multiple tradespeople, partnering with another designer, which I often do, and pulling in their designs and managing the deliverables. It's a world that I feel I do really well and I enjoy. I get so many compliments for, and I was feeling like it made me almost less than and what I realized that when that experience that I opened that it's actually what makes me different. It makes me unique; it makes me sellable. And I partnered with a few other designers in my region. I've started doing that for them. All those things that they don't necessarily like to do on a daily basis. I've been able to come in, and we partner sometimes it's me contracting with them for the design. Other times, they're just subcontracting me to do the project management. But it's a whole support system. And it's a very profitable business for me. And it's kind of creating a niche.
Michele 14:21
Absolutely. So that was one of the things that I challenged you on at the table. And when we were sitting here, I'm like, why would you like that's your strength. That's where you shine. That's where you're most comfortable. That's what you love. It doesn't mean you don't love the sourcing. It doesn't mean you don't love the pulling together in the design, phase. You did, and you do that beautifully. But this like, I mean, your face lit up. Every time you talked about window treatments in the project management. It had created this thirst in you for how can I do it better and how can I streamline it. It was visible. And what I thought was so very cool was if it were just me and you talking it would have been very easy for you, I'm not saying you discount what I say, because you don't. But it would have been easy to almost argue that yes, Michelle, you think that, but nobody else is going to think that. But what was super cool was there were like, almost eight other designers around the table, and all their heads turned to you, and they're like, you love to do that? Oh my gosh, if I needed help with that, I would totally hire you to do that. And you were like you would? And yes, if that's not the part we go, we can go move on to the next thing, and you can make the plan become a reality. You then, you get paid for managing that we get paid for doing what we do. We move on you move on, like beautiful. You know, like you've had opportunities since then to do like, I don't know 60 something windows in somebody's home. Because the designer in the space. It wasn't what they wanted to do. And they wanted to move on to somebody else. They call you in and said, Katie, you get to do all 65 windows. Do you know many designers would be like that sign me up to do 65 windows in a home. And so I think it was in that moment that you not only didn't have to apologize for charging, but you didn't have to apologize for loving what you love and doing in my mind what God created you to do best. So it allowed you to do what you wanted but then to really niche down specifically to the project management or the window coverings, in support of other like businesses in your area. And then that opened up another level of opportunity to charge in a different income stream. You know what I mean? You now have an income from other designers professional and professional business to business, as well as from homeowners to Katie Baldwin designs.
Katie Baldwin 16:45
And let me give you an example of exactly how that has quickly changed my business. In February I hosted a lunch and learn. I had one of my window vendors come in, and we did a presentation I had about 5 to 10, let's say eight contractors and seven designers, and we talked about all different kinds of window treatments, some of my floor covering category. Within a week, I got an order that was 50% of my sales goal for the month of February. It was so quick; it's happening so fast. And it is exactly what we're saying that there are designers out there that just, you know, to her, that was the biggest support I could ever give her. She didn't have to worry about it. She could come in, see the product quickly. Show samples to her client, and then pass the baton to me and say you handle everything. You handle the ordering, you handle the installation, you handle the fluffing once it gets on the windows, the wall icing, and it just it's happening fast because there is a need and it's going really well.
Michele 17:51
That's awesome. I mean, right and you love it, and they love it. It suits what you do well it suits what they don't do well. I mean, it's just such a beautiful marriage of opportunity there. What do you think? I know you said you remember being at the table. You remember the conversation. I remember just watching you take in the reactions of the other business owners. They're going Yes, Katie? Yes, Katie. Yes, Katie. I'm curious about a couple of things. Where do you think of the need to apologize for doing what you want to do? Where do you think that stems from? Do you have any idea?
Katie Baldwin 18:28
Well, yes, I can tell you that. I was raised in a world where, my dad was a banker. He was very corporate, like everything was there was no entrepreneurship in my immediate family. So when I first was talking about leaving the fashion industry, and I had an amazing job. I had an amazing career in that world. I got so much pushback from my friends and my family that at the time. I owned an apartment in New York, a weekend house in the country like, life was really good. I went from this world that I was working 60 hours a week and had no work-life balance. I was fried. And all everyone could see from the outside was she's driving the BMW. What, is she crazy? Why is she wanting to leave that world. I felt that horrible need to apologize like, that is not doing it for my soul anymore. That world did it for a long time. But I was burned out. I was fried. It didn't mean anything anymore. I went to bed every night with my laptop next to me. So when I was coming into this world of entrepreneurship, owning my own business, I felt that that confidence level I had working in the fashion world had really diminished. I had this fire in me and I had this idea and I always envisioned myself coming back to the town I grew up in and doing something entrepreneurial. I had had the vision, but I was afraid to stand my ground and really do it without apology because that not good enough voice quite frankly was screaming the first few years inside of me like what are you crazy? Like I heard those people who are looking like what are you not to left that amazing ride you're on for this, and you're making my first year in the business I made less than my last year's bonus. It was that kind of jumped down. And I felt a little bit of shame about it. And I'm so glad I did it. I thank God every day that I did it.
Michele 20:32
You know, that's true. I think I even though I mean, I know I felt so even when I left corporate America and then started my own business. I almost felt like I needed to apologize. Like I had given up everything that I had worked for, like I walked away. Now I keep thinking I would be a horrible employee like I'm too headstrong. I've got too many ideas like nobody would want me to come back and be their employee now, but I felt some of the same thing, and because in the world that I was in, you know, doing software and financials and all of that, I was good at what I did, I had a degree to back it up. And then I moved into a world where I didn't have the degree to back it up. Then I moved into a world where I didn't have the years behind me to back that it was a dream and a goal and hard work and learn as you go. That created a bit more of like this imposter syndrome. Right, then what I had because I had the documents, and the certifications and all the things behind my name and corporate that kind of proved that I was okay. I didn't have those things yet in my new world of design, and so it put me in that place of doubting. I remember apologizing to people for the fact that I even had to charge them. And then I remember the day when I first did my taxes and we realized that my husband had been working to put money into my company so I could serve rich people and make nothing. I was like, forget that! Done with that. Like it took every bit of joy out of everything I'd done and just crushed it. I was like, I'm not working for free. I'm not doing this. I'm like you, I gave up way too much to do this and work for free. So that's not happening. We got to fix that. I'm very, very thankful that I have, which is why don't apologize for being profitable and making money. That's what makes your business sustainable. That's what makes success. If we're not sustainable, we're not profitable, we can't succeed. You and I are recording this mid-April while we're home with COVID. It was having our businesses in some type of an order that is giving us a little bit more of breathing room as we're even going through this, and this is stressful. I mean, we can all admit there is stress involved no matter how prepared you are. You've worked really hard as well over that last year since last April. A little bit more than a year now, to really get your finances in order to then meaning both the from the income and not apologizing and making what you need to make, but then also managing that money properly and accounting for it properly, which puts you into a better position to move through some type of business disruption, like we have right now. Tell me how you've kind of managed that and what that process has looked like for you.
Katie Baldwin 23:28
Absolutely. What I've realized over the last year is that, you know, as my business was growing and changing, I really needed to bring in a different bookkeeping team that fit my business better. I actually listened to your podcast and found Emily, my bookkeeper in September of last year and it has been an incredible fit. We work really well together. We have cleaned up and changed the way all of my banking works, we're starting to work towards profit first. I've changed to an S Corp. The day to day running of my business is so different. We're looking at p&l every month for analyzing the business. And it has been incredible. It was a long, I would say five solid months to get it cleaned up. I've also started using QuickBooks alongside my studio designer. And that process was also it took time. You know, we have a system, it's about getting systems in place that I didn't have before. A set monthly call set deliverable dates, very simple things. But if you don't do them, you're not going to have the monthly reports that you need to make decisions about your business. And it's getting down to basics that has really changed the way my business is running and made it much more profitable.
Michele 24:45
Those small things have huge impacts. And I do know this, I know that there are many because I talked to them who maybe you're in a position somewhat similar to yours where their financials maybe weren't where they needed to be, or they need to change the way they're done. They need to, you know something about their finances, either they weren't on QuickBooks, or they are, but they only half did it, forget who's to blame for any of it. It's just not always in a place that they can make decisions. Finding that bookkeeper who's willing to go back and do the forensic accounting to clean it up and really help you go through that is super important. Then putting the process in place. This is what we look at. This is how we look at it. This is when we do it. Emily is great. I'll make sure I put her podcast in the show notes, and I love working. I love working with all of my bookkeepers that I have a close relationship with. But Emily is really just fun, and she's down to earth. And we were working together when you're going through that process, and it's not easy, and it's layers and layers and layers. To clean up and go back and make sure it's right. But I remember one of the days when you email me, and you're like, they're clean, they're clean, my books are clean, and we can use these numbers, and we can actually build a plan off of these numbers. And now, what do we get to do next? And we never get to take our eyes off of it, but there isn't. It's like having a clean design. Like it's clean. Okay, they've agreed I've agreed, go, like there's so much freedom to move forward then to feel like this anchor who's holding you back and pulling you down.
Katie Baldwin 26:31
I remember the day I got the first accurate printout. Like I felt so confident that the numbers were right. My assistant was in my office, and I literally printed it out and was like screeching running around my desk holding it in the air. And she looked at me like I was nuts. And I'm like, do you have any idea how much work went into this piece of paper? I mean, just studying it, being able to being able to look at all the elements that you know, landed me my year and understanding what categories were as a percentage of the business and what the profit was the you know, within each of those categories that helped me make so many smart decisions, and it felt I felt so empowered. And I felt legit. Like, quite frankly, that was so incredible for my confidence to like I had all these gut instincts like you know what window treatments are working, it went from zero to 30% of my business. I mean, maybe it was the year prior somewhere under 5%. But window treatments were 30% of my year last year and all that hard work that I put into them, the numbers it was paying off, it was so clear when I saw them in black and white. And then on the flip side, other categories that just didn't do it for me. The amount of work I put into things like pillows or some of the accessory categories, hours and hours and hours of time, and the return on them was so minimal that it helped me rethink where I was focusing my energy. So whatever and Emily if you're listening, that happy dance was really fun.
Michele 28:05
That was what I loved in our retreat was sitting down and analyzing the categories and showing how to look at the cost of goods category as compared to an income category that was the same. And where are you making your money? And not only that, then looking at all of the income categories as a percentage of the total, like, Where am I really, you know, the same thing happens when you start thinking about who are my top clients. Sometimes we think the top clients are the ones that may take the most time, but they're not necessarily the one paying you the most money. So when you start looking at who's taken all my time, and who's bringing in all the money, it could be two different lists. The same for me, you know, I think that there is a certain client that's paying me the most because of the need, but when you go back and do the work, you're like, no, they're really not well, that person was the one who paid me the most, and you're kind of shocked about it. It's good to make these items available to you and to be able to run those reports. What I love is you were so thirsty Katie, to understand what the numbers were telling you, I kept talking about the story of your numbers, the story of your numbers, and you kept saying, tell me what this is meaning Tell me what you knew a lot like you knew a good amount coming in. It was the nuances of things like what should I be looking at? Or tell me another way to look at this? How can I look at it this way? And I remember sitting at the table going through all of that, and then you've done some of it with Emily as well. I can start to see like you're able to now spout. This is 30%. This is 12%. I don't want to do this, this this this. I mean, it's just empowering. It is absolutely empowering. It is legitimizing, and it removes that imposter feeling, and it removes the need to apologize for the field and that you need to apologize.
Katie Baldwin 29:53
You nailed it. Bye-bye imposter syndrome. Like looking at those numbers, that insecure voice in my head goes away because I have validation now. And I did need that I admit it. Not everyone needs that. And I wish I could be that person sometimes. But I did need it. And it just proved to me how important it is to keep organized, keep my systems in place, and keep a partner and a bookkeeper. That's so critical.
Michele 30:18
It also I think, let's go back for a second. We even talked about being a good resource for window treatments, not only for your one to one clients, but also for other designers, and then helping in that project management. Because we broke out your income streams to show you like everywhere you were making your money, you can then start to see how putting some efforts into creating those relationships with other designers. Like we can literally see the number as it pays off, which then goes back and strengthens the idea of Katie keep working in areas that you love and are strongest in because there is a payoff like we had a direct correlation between you doing what you love to do. Part of this entire industry, the importance of it, the need for it, because it was valuable and was paid for.
Katie Baldwin 31:07
Absolutely. You taught me and made me realize that this goes back to the numbers as well. But I constantly was feeling that fear of missing out, we call it FOMO. And, for example, if I suddenly saw there was a conference in Detroit on how to hand knot rugs, like I always was looking and thinking, oh, there's a bunch of other designers going, this is something I need to learn about and, or if there was a webinar that I could attend, it was a half-day, I'd wasted an afternoon on indoor and outdoor fabrics. Now all of these things are very important. They're very good resources. But when I look at those categories compared to what my volume was, suddenly, a two day trip to Detroit for a rug seminar was not going back to what was making me money on my profit and loss statements. So what you've also helped me do the last few months is remind me to sort of pause and look at, is the thing I want to attend or the conference or the webinar, going to give me what I need for my bottom line and support my goals. And it's so simple, just like I said, it's that new pair of glasses I'm putting on suddenly doesn't matter. Like, there might be 10 designers that I love and know and want to spend time with going to this conference, but it's not necessarily what I need to do for my business today. Maybe next year, I can add that, but I can't be everywhere and do everything. So it's continuing to ask myself those questions to stay focused on what's going to do best for my bottom line.
Michele 32:49
We had quite a few conversations. We've we all have them. Should I go here, should I attend that? Should I do this? Should I do that and you know, We get a pre-coded society, there was absolutely an opportunity to meet as a community every other day with somebody. I mean, there just was because we're community, people, everybody sharing, there was Dallas market. There's High Point market; there's Vegas market. I mean, there's market after market. And each of them are, you know, Atlanta and they’re twice a year on top of that, plus all of the other more niche conferences that were there, plus the individual learning education that maybe a vendor would offer. And so one of the things that you and I worked on most Katie, what is it that you want to be known for? What is it that you do? Where do you want your business to be at the end of the year? And what is going to get you there? So let's look at what education or experiences do you need. They're going to help you reach the goal that you have already set. And then we also talked about what is the amount of time that you're willing to be out of the office because you were finding yourself. It wasn't just about the money, it was about constantly being out of the office and then having to work like a dog at night, and then having to spend your weekends catching up, which puts you back into that yuck feeling of corporate, which you would work so hard to get out of, we were now recreating it in your own design business, which was not good for a family life balance. And then let's add the monetary expense on top of it. And so we kind of looked at, where is Katie going in this next one year, right? And then maybe three years? What's most important? What education did you just do that maybe you haven't even put into practice yet? So why would we go do more of the same education until we put the first in practice? So what did we learn? How are we going to put into practice? And do we have an education budget? And when we budgeted, we decided like, here's how much I can spend for the year. Here's how much time I'm willing to give up. So what is the best use of my education budget of dollars, and my budget of time. I remember asking you the question, do you want to go because you really want to learn something? Or do you want to go? Because that's who your friends are. You sat back for a minute and you went, ah, I really just want to go because of my friends. And are you? And then I just said that until, you know, are you willing to take this and this and have this happen and spend your educational budget to be with friends for education that you might not need or put into practice? And then you went? No. Okay. So will your friends be at this event? Well, at the time, we thought, yes. Maybe we go there, or like you went to one conference last year, that supported or a certain area of your business, you didn't need to go to that same conference this year. Maybe you go in every other year to that conference, and you put something different in its place. But we just got very intentional. And you did a lot of soul searching on this because I can't answer this for you. All I can do is give you a framework to review it. You had to sit down and say, will this really get me there? The questions that I would pose to all the listeners are, you know what some of the things you ask yourself is, you know, does it fit into my budget? Does it fit into my goals? Does it fit into the timeframe that I have? Have I already been putting moving forward in that position? Do I have a plan to use it? Will I do something with it? Or is it that I'm going to go it's going to be so fun, and it's really just to design vacation? Yes. And can you really afford that many design vacations? And it's just a good way for you to think through it
Katie Baldwin 36:35
Completely. And I have to be honest, there are some days I scroll through Instagram, and I still, I mean, not today, obviously, with what's going on in the world, but in general, and I think, why aren't I going into Paris? Live at this event in Paris? Or how can I save up to get to Dallas market next, and I have to pause, and it's so important. I've learned to spend time with a coach. We've had great conversations about this with another person and just really laid out on the line. It seems so simple when I look in the rearview mirror and see how that conversation went. But I didn't see it at all. I was thinking I had to be everywhere and involved in everything all the time. And it was only making me more frantic, if you put the word, you hit the nail on the head when you said, it took me back to where I was when I was working in the fashion industry, working 24 seven, and that didn't feel good. And I don't want to get back to that place.
Michele 37:26
You know one other thing if we really think about it, when you're looking at a business and the income statement, this was the other thing that we talked about, with all things not just with travel, but with everything is we looked at your budget and kind of really got your numbers laid out in a way that they made sense to you and gave you that power was you then had the power to realize every dollar that you spent as an expense item in the company was a dollar that didn't come home and go in your personal pocket. I'd asked you, would you rather go on this trip or spin this or go there and do this? Would you rather have that? Or would you rather have the salary and income? And if your company needs it to go forward if your company? Absolutely, you need to look at it and do it, but it is so easy in our businesses to spend money doing things, and then and you weren't complaining, but I've seen it before. We complain, why did I not get enough home or I can't pay my taxes, or I can't put money in my IRA or 401k. And the truth of the matter is many businesses can they've just chosen to spend that money on 45 educational programs on 32 trips on bringing in a green smoothie for everybody every day. I mean, they're spending the money in a different way. Until they stop and realize every dollar I spent in that company is a dollar that doesn't come home with me. You're not going to be changing it, and so then you got to not just look at am I going for friends are going for education and how is it you know, working for my company but do I want to be paid more or do I want to go on Do I want to be paid more? Or do I want to buy that service? Do I want to be paid more? Or do I want to do this?
Katie Baldwin 39:06
You know, or one of my biggest angsts every quarter, like many of us was, can I pay my quarterly taxes, whatever those bills are, like, I can confidently tell you that money is set. Since this time last year, when I started looking differently at my business, like there is not a quarter that I have been, you know, losing sleep at night because those systems are in place. So you just hit the nail on the head yet again.
Michele 39:32
And that's why I love profit. First, you know your numbers, you pull it out, you save it. I mean, look, we are, you know, right past first quarter, we just had all the payroll stuff due from the first quarter, it didn't, didn't get forgiven, we had to pay some of this stuff. And so if we hadn't saved it, and we're in the middle of COVID, it could be quite a strain on many businesses to do first quarter payroll, first-quarter taxes and all the things that we had to do keep ourselves going when maybe our income is diminished or slightly changed right now. Having that money set aside into the all the locations that it needs to go, oh my gosh, it is. I mean, I'm not saying you still don't sometimes golf in the middle of a business disruption, but outside of a business disruption. It's amazing. You know, for me one of the big things Katie, and I think you've done this too, and that you started it for 2020 was I started looking at where I want to put money in my 401k instead of waiting to the end of the year, and the accountant came back and said to me, Michelle, you can put X amount of dollars in I started planning in advance from day one, how much am I going to put in this year and saving it into a separate account like I do to pay my taxes, and then every quarter I can make a contribution to my I have a solo 401k plan. Every quarter I can make a contribution to that 401k plan, knowing that it has been accounted for and planned for in advance and so I love to go travel, I love to do things too. But if it meant that I got to go to one extra trip, or I got to fund my 401k, while I'm in my 50s, I'm going to fund my 401k. I mean, I just am, you know, but everybody gets to make their own decision. The truth is just we need the data so that we're not making decisions just on gut reaction. I think that's what you mean; your gut was leading you in some ways. But my goodness, to have that empirical data down in front of you, it didn't make you go back and second guess can I trust my gut, you could trust the numbers because they were on the paper.
Katie Baldwin 41:33
Absolutely. And my financial advisor was so happy I had set up a 401k on my own a few years ago, and every quarter I had a plan I articulated with her, but every quarter there was an excuse, or it was fractions of what we agreed to. And just like you said, that money's been put aside now, and it's part of my process. Every dollar that comes in, there's a piece of it that goes into an account and each quarter, I can fund my 401k, that's huge. Since I've been in corporate, I have not been making those, you know, it's not something I'm proud of, but it's reality I have not been making those contributions that should have that will help me in my future.
Michele 42:13
Because we get so busy managing the day to day and not analyzing and not looking at all the dollars, that is easy at the end. That's why, you know, I keep screaming profit first. But that's why we don't take profit at the end, because they will almost always not be any at the end. We tend to overspend. But if we pull out some profit at the beginning, and again, I'm not talking about robbing the business, you're I'm talking about doing a financial analysis to know what the business can bear and then to work up towards a goal that you've set for that company. But you start pulling out your salary, you start pulling out a profit, you pull out your retirement, and you manage the company on the expenses that are left. Now you're going to start making different decisions. I will tell you, the businesses that are going to do so much better after all of this COVID are going to be the ones that realized they better have three to six months of expenses set aside, like we can't go back to, to scraping down to zero every month, we were going to lose so many businesses across the board that honestly many of them, they were probably in a bad way anyway if they are, if we're all running on that level of debt, we're struggling anyway. So we need to get our financial act together, every one of us does, to make sure that we are running sustainable businesses where we know the money, and we know the money out, and we're saving for that rainy day. Because by gosh, we are in the rainy season. We are in a deluge right now. And you know it again, if we've never done it before, it's not too late to do business better, we can start putting a framework in place so that as business returns, we do it differently. Because if it's not another return of COVID in the fall like you're saying or some other time could be the next business disruption that comes in, you know, they show up in multiple forms. And I am just so proud that you have done all this amazing work over the last year because you are absolutely walking into this in completely different mind space. And, and with different levels and understandings of your business than if this had happened last April, I think it could have been very, a lot more devastating to you last year than it would have this year.
Katie Baldwin 44:31
I can't imagine I would have been an absolute mess. Such a different mindset I have from a year ago.
Michele 44:41
So what do you do now to work through that? FOMO, so outside of asking yourself all those questions that we talked about, I know everybody needs a good coach who will ask them 1000 questions who you want to keep saying quit asking me all the questions. But I think the beauty of that is there's a difference between education and coaching. I can educate you by telling you something, telling you what to do. That's not coaching. Coaching is helping you learn how to make your own decisions and giving you the info, I might tell you a small piece, but then ask you, like, you have to own these decisions, right? I can't own them for you, you have to own them. But once you learn the frameworks of how to be strategic and intentional, and to really think through, you know, like we're working through a methodology that aligns your team, ignite your process, managing money, people process profits, you then start to pick up that framework, and you can use it in your own life, even in your personal life, like Okay, do I want to put this money here or there and how do I want to spend it? It just teaches you that new way of being put the new glasses on the new perspective. What do you think have been outside of what we've talked about? Are there any other like really big sweeping changes or thought processes that you've gone through to help you handle FOMO?
Katie Baldwin 46:01
I think it's been, you know, it's been a learning curve for sure. My natural instinct sometimes, you know, takes me down the wrong rabbit hole, and I'll be researching a conference and two hours later catch myself like, wait a minute. This is not in alignment with my plan right now. It sounds simple, but it really is just about continuing to practice the pause. I think the pause is so simple, but it has been critical. Like is this what's going to get me to where I need to be for my yearly goals? You know, can this be put on the back burner and put on the list, I have a long list of things I want to do 2-3-5 years out, but for right now today where my feet are, this isn't going to get me where I need to go. So it's simple, but it's the pause.
Michele 46:47
I love that. We do that exercise. Look forward to look back. Remember when you look forward, we are here. And so we're we started it, and I think because we were meeting in November, I was like look at the end of 2020 Which is so funny now in the middle of all the crazy we have the end of 2020 and tell me, you just had the best year ever what just happened? And then when you do that, and you identify, here's what just happened that got me to where I want to be at the end of the year. We can like see it almost like visioning is backwards. Visioning is what it is, yeah, you've done that work, then it actually gives you the framework to review these ideas, and then you start reframing. FOMO because it's not fear of missing out, is fear of spinning my time and money in a way that's not going to serve me.
Katie Baldwin 47:35
Yes. It is.
Michele 47:37
Yes. Right. So it's that awareness that creates the pause. At do I want to do this because it serves me, or do I want to do this because I just want to be with the people or I don't want to miss out, or I don't want to then go back and see the pictures of what everybody else did. And what we don't always know is it may be serving where they want to be. Go.
Katie Baldwin 48:01
Right, exactly.
Michele 48:02
So they may not be going because it's fun when they need to go in because it literally serves a goal that they have in front of them. But that doesn't mean it has to serve the goal in front of you. And so each of us has to stop and look at that. You know, there's that saying, you need to love saving more than you love spending. I always talk about profit first thing, our money and profit posting our time, meaning do what's most important with your time because it's a currency that we're spending on the calendar. When we spend that currency, doing something that's not the most profitable and the best for our business, we're wasting it the same way that we would waste money that we spent without thinking. I think that's where we sometimes are not looking as closely is that how we're spending our time and how we're being efficient. That's why processes and systems that's why all of that's important, but it's also important with where we go and what we do and Are we doing a job we don't like or are doing a job, we're not as great at like why, you know, the more that we can profit first and air quotes our time. And by telling our time where to go and how to be best spent, the better off we're going to be the faster we're going to get our work done. And the more we're going to have a work-life balance.
Katie Baldwin 49:19
Absolutely. And I think that for me, part of that pause for this year and like you were just talking about the rearview mirror, I am continuing to focus on two things. One are the processes. You know, I've come so far in a year, but I still have a long way to go. And the second is just figuring out my team who owns what and what their roles and responsibilities are. As I said, I have one or two part-timers right now. And you know, their time is depending on what type of projects I'm working on, they flex, and that's really what I have to keep focus on to get through this, you know, tab a year, a successful year. I know that.
Michele 50:05
So, you know, I’m a Fix This Next advisor. And we've been talking about the business hierarchy of needs. And the bottom level is sales. And the next level is profitability. You've already worked through both of those, and you have those pretty darn solid. And you know, we're working with you on that next level called order. And that's where we're working to put the systems in place. And the thing I would say is, we have to realize that this is an iterative process. So we're going through it over and over and over, because the business that you originally build is going to shift and change. So we kind of have to go back through and realign those processes to support the business. And that's where we really get into what's most important for Katie to do, what's most important for her staff to do and what do we delegate and how do we empower them and educate them and equip them and that's kind of the process we're working from now. It's hard to get to that process. If you don't have the sales coming in, you don't have the profitability. So all the work that you have done, has really been building this, this business building that you have, that's putting you even more and more. And listen, once we get your order in place, we're moving on to your impact, and your legacy like this is going to write it blows up. And that's what we're working on now is really making those transformative impacts in society and on your clients and then leaving a legacy that extends or that is still there beyond just the work you do because you're transforming the lives of your clients allows transformation in their family and in their home. I mean, I know. You know, you're transforming some homes right now, just so that some of your clients who have immunocompromised family members can get into a home. You have really just busted your rear to get some of these things done. And that's a big deal. When we talk about design. It's a big deal because you're getting that house ready so that they couldn't be safe and healthy during a health crisis. And so we just we have to keep that in mind. And you've worked so hard to get to the level of going back through your processes and fine-tuning them and honing them and realizing what's working now and what's not, where are the holes, and fixing them so that we can keep moving you up. And I'm just; I'm so super proud about the work that you're doing.
Katie Baldwin 52:24
Thank you. I'm grateful to have you in my life and in my business, and it's really, you know, been fun to talk today.
Michele 52:33
Even with my 10,000 questions to ask you. I love it. Well, Katie, thank you so much for joining us. Tell everybody your website and your Instagram handle so they can go hang out with you.
Katie Baldwin 52:44
Sure. It's Katie Baldwin Designs for both. Instagram - @katiebaldwindesigns website - www.katiebaldwindesigns.com
Michele 52:48
Yes, perfect. Perfect. Well, once again, Katie, thank you for sharing your journey. Thank you for being willing to talk about FOMO and imposter syndrome and getting your books in order. You know, there's so many of us all had to do it at some point. And I just appreciate you sharing kind of that transformation the before and after around that. So thank you. Thanks again to Katie for joining us today, just such a great conversation. You know, we all probably have FOMO in some ways when we're watching in such a visual way through Instagram, or Facebook, or Snapchat or tik tok, or wherever we're watching, we probably are seeing other people do some things that give us this idea that maybe we should be doing them as well. What I want to challenge all of us to do is to really sit down and kind of quiet our minds, reduce the noise, and listen to the voice in us. It's telling us what we want to do. Don't be afraid to do that there is a way to monetize just about any aspect of interior design. Follow your heart. Follow your strengths, do what you want to do, and really stand back and ask yourself, where is this idea of FOMO coming from? One of the things that Katie mentioned is that she is a member of The Designer's Inner Circle, and the private Facebook group that I have for them. This is where I help all of you align your business, ignite your processes, manage your money. But even more than that, to create a business with structure and with intention, with strategy, and just learning how to think and just learning how to ask yourself certain questions will create a framework and a template that you can pick up and move to any part of your life or any part of your business at any time in your business. And so I want to invite you if this is something that's interesting to you, go to my website, reach out, let's have a call and talk about it. You can find more at www.scarletthreadconsulting.com, and just remember, profit is a choice and it doesn't happen by accident.