How do I sell an interior design business?

A design studio can rest on the owner’s taste, relationships and name, which is what makes it hard to hand over. Buyers will ask what they are actually acquiring besides you. The more of the answer you can put on paper and show working without you, the easier the conversation becomes. Start well before you list the studio, because several of the fixes take months to show up.

Make the studio less dependent on you

Look at who the clients call. If every inquiry, site visit and approval comes to the owner, a buyer sees a job, not a business. Begin moving client contact to senior designers or a project manager, and write down how a project runs from first meeting to install. Keep notes on which clients came from builders, realtors or past customers, since a buyer will want to see where the next work comes from.

Document open projects and deposits

Prepare a clear list of every project in progress: what the client has signed, what has been paid, what has been ordered and what is still to be delivered. Deposits taken for work not yet done will draw questions, and your lawyer can say how they are handled in the deal structure. Showing clean records here builds confidence and avoids disputes about who owes what at closing.

Sort out accounts, rights and relationships

Many studios buy through trade accounts and vendor discounts that were set up in the owner’s name. Ask each key supplier whether the arrangement can continue with a new owner. Also check who owns the portfolio photographs and whether clients agreed to their projects being shown. A buyer will want to keep using that material in marketing.

• Client and referral source list, with the history of each relationship
• Open project schedule with deposits and commitments
• Supplier and trade account terms, and whether each can transfer
• Staff roles and who the clients already know
• Photo and portfolio rights

Plan the handover

Ask prospective buyers whether they want you to stay for a period after closing and introduce them to clients and suppliers. Decide in advance how long you are willing to do that and what you will do during it. A business valuation firm can help you understand how buyers view a studio like yours, and your broker can advise on how to approach the right buyers.