How Interior Design Business Owners Can Thrive in 2025 Despite Economic Challenges
2025 brings economic uncertainty—but also opportunity. Discover how interior design business owners can adapt to rising costs, diversify revenue, and thrive with these 7 essential strategies.
PROJECT: THE FRANKLIN / PHOTOGRAPHY: AGNES ART & PHOTO
The economic landscape for 2025 is shaping up to be unpredictable, with new tariffs, immigration policies, and rising costs already on the horizon. As interior design business owners, it’s crucial to prepare for these shifts to maintain profitability and ensure long-term success. While these changes bring challenges, they also create opportunities for businesses that adapt and plan ahead.
Here’s how you can position your business to thrive in 2025.
Adjust Client Expectations Around Budgets
With rising tariffs and labor shortages driving up costs, it’s time to reevaluate how you communicate project budgets to your clients.
Update Your Tools: Ensure your budget templates and estimation tools reflect current market conditions, including higher costs for materials, labor, and timelines.
Be Transparent: Set clear expectations about potential cost increases and delays early in the process to avoid surprises later. Educating clients now can build trust and reduce frustration.
Show Value: Highlight the quality and expertise your services bring to the table, especially when budgets are tight. Clients will pay for the assurance that their investment is well-managed.
Diversify Your Income Streams
When costs go up, demand often goes down. If the remodeling and construction side of your business slows in 2025, having multiple income streams will keep your business resilient.
Target Economically Advantaged Clients: Shift your marketing to attract clients who will be less impacted by economic shifts, such as affluent residential homeowners, corporate clients, ex-pats or international clients or government contracts.
Explore New Revenue Streams:
Sell physical products, especially those made in the U.S. to avoid tariff-related price increases.
Offer virtual services, like e-design or consulting.
Create digital products, like templates or guides, that provide value to other designers or DIY clients.
Leverage Passive Income: Consider collaborations, sponsorships, or affiliate partnerships with brands that align with your audience.
Keep a Close Eye on Your Business Budget
Economic uncertainty calls for extra diligence in managing your expenses.
Review Regularly: Sit down weekly or at least monthly to analyze your spending and income. This will help you identify waste and adjust quickly to changing circumstances.
Cut the “Nice-to-Haves”: Evaluate your current spending. If a tool, service, or expense isn’t critical to operations, consider pausing or eliminating it.
Build an Emergency Fund: Aim to save 3-6 months of operating expenses to protect your business from potential downturns.
Plan for Price Increases: Budget for higher costs across software, supplies, and labor, as inflation and tariffs ripple through the industry.
Raise Your Prices
While it may feel counterintuitive during challenging times, increasing your prices is often necessary to keep pace with rising costs.
Communicate the Value: Show clients how your expertise saves them time, money, and stress.
Reposition Services: Consider bundling or restructuring your offerings to create premium options that justify higher rates.
Adjust Annually: Build in annual pricing reviews so your business can keep up with inflation and market trends.
Seek Guidance From Experienced Professionals
Running a business during economic uncertainty is no small task. Lean on the expertise of those who have weathered similar challenges.
Invest in Coaching: Partner with a seasoned designer or business coach who can help you navigate the unique challenges of 2025.
Learn From the Past: Look at how businesses in your field survived previous downturns for inspiration and proven strategies.
Build Community: Join industry groups, trade organizations, or local business networks. Sharing resources and advice can make all the difference.
Consider Bartering and Collaboration
If cash flow becomes tight, look for creative ways to exchange value with other businesses.
Trade Services: Bartering can help you secure what you need without additional spending. For example, offer design services in exchange for marketing or photography.
Collaborate Locally: Partner with local businesses to share resources or cross-promote services.
Stay Vigilant and Adaptable
The businesses that succeed during uncertain times are those that monitor their finances closely and remain flexible.
Monitor Expenses Weekly: Tracking cash flow frequently allows you to catch problems early and make adjustments.
Keep an Eye on Industry Trends: Watch for changes in demand, pricing, and materials so you can pivot quickly.
Stay Positive: Focus on the opportunities these challenges create. Times of disruption often lead to innovation and growth for those who are prepared.
Looking Ahead
While the road ahead may feel uncertain, it’s also a chance to strengthen your business, diversify your offerings, and build resilience. By preparing now—adjusting budgets, finding new income streams, and staying flexible—you’ll set yourself up not just to survive 2025, but to thrive in it.
Remember, you don’t have to navigate this alone. Building community and seeking guidance from experienced professionals will help you weather these changes and come out stronger on the other side.
If you’re looking for support or strategies tailored to your business, I’d love to help. Let’s connect and create a plan to ensure 2025 is your most successful year yet.
About Mackenzie Collier Interiors
Established in 2011, Mackenzie Collier Interiors is a Phoenix-based design firm specializing in residential and commercial spaces. Our team crafts unique environments tailored to client visions, tackling projects from home renovations to large-scale multi-family housing developments. Proudly LGBTQ owned, Mackenzie Collier Interiors prioritizes transparency and efficiency, offering inclusive design services nationwide.
