While making an interior designing business plan for it is essential to be aware of ones strengths and weaknesses to be able to capitalize on them and improve upon them. A SWOT analysis is a critical analysis of the strengths , weakness, opportunities and threats to a business. This detailed report is again very useful to any business to know the ares where it has an advantage and the opportunities and threats that are present in the chosen.A detailed report can help transform threats into opportunities for an interior designing business and can thus lead to improved efficiency which contributes to increase in business profits.
Psalms interiors also conducted a SWOT analysis of their business plan and came up with the following conclusions;
- Psalms interiors has already studied that there is a large scope for small interior designing businesses to flourish since the major players in the area control only about 8% of the business clientele and only contribute only 27% of the service revenue,hence leaving a large scope for players like Psalms.
- Psalms is led by a person who is an old resident in the area and hence has is known to many of the prospective clients.The owner is also aware of the tastes and preferences to many of the prospective clients and thus can provide an excellent client service.
- Being a small firm it has no overheads like maintaining a large staff or an impressive office and hence this can lead to Psalms offering a very competitive price to its residential interior designing clients.The price can be kept very competitive in the first year to gain easy entry into the market.
- Psalms has a strong relation with the suppliers and vendors in the area and this will come useful at the time of procuring special product requirements for its clients.
- The owner being an old resident of the area can also get good referrals from vendors,suppliers and even real estate agents in the area.
- The owner has a keen eye for interiors and can also tie up with local vendors to replicate high end models but with a better quality and finish than discounters.
- Since the initial investment has been kept very low for Psalms interiors and the designing will mainly be done by the owner it can cater individually to the whims of every individual client and thus get referrals and build up a loyal client list for future.
- The absence of a major in house product also makes the business flexible to cater to the needs of the do it yourself type of clients who mainly look for assistance to implement their design ideas and hence are skeptical to approach large and established residential interior decorating and designing business.
- The presence of established names and individual interior designers in the area who already have a loyal clientele makes it a hindrance for a new entrant to get established in the market.
- Absence of any previous business experience of the owner.
- Absence of specialized product or service.
Presence of other design options available in the area.
- As indicated by market analysis a significant portion of the clients are looking for residential interior designers and hence there is a huge scope for start ups like Psalms interiors.With competitive pricing and proper client service it would be easy to break into the new market.
- Increased construction activity in the area has also led to the opening up of a completely new market for home interior designing for Psalms interiors.
- Good relationships with all stakeholders like suppliers,vendors and technicians can also help to generate good referrals for the business which can then lead to increased sales.
- The market segmentation has also thrown up an opportunity in the form of people who will buy a new home or will renovate. Also 68% of the ladies who form The Trendsetters will look for interior decorators and will require personalized service and hence this will prove to be a big area for Psalms interiors.
- Constantly changing consumer tastes in terms of residential interior design will provide a challenge since they will have to continually update themselves.
- There will also be an intense price war among the smaller players and individual designers with each trying to use the price as a unique selling point for themselves.
- No specialization will not allow them to cater to the customers who need a particular service.
- Intense competition from technology driven companies like reflections since many customers prefer to buy products online.
- Increase in the product line and services by established stores like Sofia’s decor will also erode the client base of smaller interior designing firms.
- Price escalation by suppliers and vendors will force many smaller firms to make an exit from the market.
This self analysis indicates that there is ample scope for Psalms interiors to come into the residential interior designing business and they have a solid strength on which to build up the business. However it also needs to be remembered that the threats have to be taken into consideration and they need to consolidate their opportunities into strengths and convert threats into opportunities.