Staging Diva Debra Gould warns home stagers to be cautious about investing in furniture inventory for rental to their clients.
Home Stagers Cautioned Against Racking Up Debt for Furniture Inventory
(UNITED STATES) June 4, 2012 – Many home stagers assume they must build up their own home staging furniture inventory in order to attract clients. On the Home Staging Business Report blog, expert home stager Debra Gould tells a cautionary tale about Kimberly, a home stager who found herself $100,000 in debt after purchasing furniture inventory for her clients’ homes.
Gould, founder of the Staging Diva Home Staging Business Training Program, believes it is important to share Kimberly’s story with her readers, especially those who are considering getting into the business of furniture rental. She hopes to help them approach such a venture carefully with a lot of business analysis and their eyes wide open to the potential pitfalls.
Kimberly had been staging high-end condos with her own home staging furniture and accessories. According to Gould, Kimberly is a talented decorator and home stager, and her work looks like it belongs in a decorating magazine.
“To put her creative vision into action, Kimberly bought everything she needed during several ‘don’t-pay-a-cent’ events that defer payment for two years,” says Gould. “That’s how Kimberly amassed so much home staging inventory—project by project. Every time she had a new condo to stage, she would buy all the furniture and accessories for that particular condo. Then another project would come, and she’d go out and do it again. Kimberly believed that since she didn’t have to pay for her home staging inventory for a couple of years, she could make a small fortune in the meantime.”
According to Gould, Kimberly made the mistake of setting up her contracts so that people could have her home staging furniture and accessories for up to a year for a fixed amount. This meant there was no ongoing revenue stream if the items remained with the same client month after month. She assumed that if her home staging customers only needed the items for a few months, she would be able to re-rent the items 3 or 4 times in a single year, and that by the time the debt was due, she would have made enough in home staging rental fees to pay for it.
Because Kimberly’s contracts were open-ended and did not ensure that she had a steady cash flow coming in, she had nothing to protect her when the real estate market slowed down. Her clients’ luxury condos were not selling, and she had all her home staging furniture and accessories tied up for at least a year with no other income coming in.
“Unfortunately, Kimberly didn’t approach her home staging business with a business focus,” Gould explains. “Instead, she was obsessed with how lovely she wanted to make all her clients’ condos look. Creating beauty was her driving force rather than making money. There’s nothing wrong with allowing your desire to decorate beautiful spaces to be what keeps you inspired, but unless this is a hobby, it’s also critical to remember that you’re creating a home staging business that’s supposed to make money!”
Facing a financial crisis, Kimberly hired Gould to help her with one-on-one business coaching. Gould helped her restructure her pricing strategy and develop new terms for future furniture rentals. Together, they also developed a strategy to maximize the value of Kimberly’s current inventory and turn some of it into cash to pay down her debts.
Gould has run her own home staging business since 2002 and staged many vacant and occupied homes. During this time, she has not invested in her own inventory.
In the Staging Diva Training Program, Gould teaches home stagers how to manage their own inventory, but she also teaches them how to work without it so stagers do not have to take so many financial risks.
About Staging Diva
The creator of the Staging Diva Home Staging Business Training Program, Debra Gould has staged millions of dollars’ worth of real estate, including 7 of her own homes. She is the president of Voice of Possibility Group Inc., which operates a home staging division, SixElements.com, in addition to StagingDiva.com, which has trained over 7,000 home stagers to start and grow their own businesses.
Debra has gained international recognition through features in major media in the US and Canada including: This Old House, HGTV, CNN Money, CBC National News, CBS Radio, Global TV, City TV, The Wall Street Journal, Women’s Day, Reader’s Digest and more.