What should I ask about an interior design studio’s unfinished client projects and orders?

Request a schedule of open work with the client, scope, deposits received, orders placed and delivery dates. Interior projects involve many moving parts, and orders for custom items are often hard to cancel. Ask which orders are paid, which are not and which could not be returned if a client backed out.

Then read how the studio handles money. Were client deposits used to buy goods, or were they spent on something else? If deposits have been spent on general costs, the buyer may inherit an obligation to deliver without the cash to do it. Your accountant can trace this, and your lawyer can advise how it should be handled in the purchase.

Ask about problems too. Are any clients waiting on delayed items, disputing an invoice or unhappy with the design? Speak with the people who have run each project, since they know the risks. Finally, settle who gets the profit and who carries the loss on each open job, and put that in the written terms rather than leaving it to goodwill. Ask also whether any client has paid in full for items not yet received, since that creates the sharpest obligation. Note also any deliveries promised to clients by dates that have already passed.

Key takeaways

• Get a schedule of open projects, deposits received and orders placed.
• Trace where client deposits went and who owes what.
• Agree in writing who takes the profit or loss on unfinished jobs.