← Trade Tales
Trade Tales
Why Hanna Li’s design proposals include a sustainability fee
00:53:06
Los Angeles–based designer Hanna Li on how she’s measuring the carbon footprint of every project, why she produced short films about her firm’s work, and the reason every role she hires for comes with a five-year plan.
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- [00:03]
Hannah Lee
Design isn't all about aesthetics, you know, I talk about these three principles. How do we allow clients to live happier, promote better relationships, and live longer?
- [00:15]
Caitlin Petersen
Hi, I'm Caitlin Petersen, the editor in chief of Business of Home. Welcome to Trade Tales, where I'll be talking to interior designers about the challenges, pivots, and perspective shifts that come with growing a design firm. My hope is that you hear your own why echoed in these stories for an idea that sparks your own breakthrough. I hope it helps you realize that even when entrepreneurship feels lonely, you're not alone. My guest today is a designer who has developed a process and recruited a team that allows her to truly serve as the creative director of her firm. From that vantage point, she's able to think big about topics like sustainability and longevity and to examine what it takes to embed each of them into the fabric of every project. I can't wait to share it with you. But first, the quick word about Becoming a BOH Insider. If you're ready to get some real momentum behind your goals this year, consider becoming a BOH Insider. It's a membership program tailored to the needs of busy design professionals that gives you access to exclusive BOH reporting as well as a weekly curriculum of online workshops led by some of the most respected voices in the industry. You'll also get access to a rich archive of past courses so you can always find the guidance you need no matter what challenges you're navigating in your business. Explore the benefits of becoming a BOH insider today@businessofhome.com bohinsider.
- [02:04]
Hannah Lee
I grew up in a very small village in China where life was very close to nature. There was a specific kind of rhythm, and I knew at some point I was going to do something very hands on, having such a wonderful exposure to a world that was in constant development at the time. That led me to study furniture design in college and allow me to deepen my understanding of, like, craftsmanship, form, proportion. But over time I realized, you know, I didn't want to just exactly focus on designing objects. I wanted to learn more about how environments in those objects that they lived in interplayed with how people interacted with spaces. So I transitioned from a painting major to furniture design and into interior design. That's Hannah Lee.
- [02:52]
Caitlin Petersen
She earned her design degree at RISD as well as a minor in environmental science at Brown. After school, she went on to work for several boutique design firms and furniture fabricators. Both disciplines held her interest, but defining the next stage in her career would require her to pick a side.
- [03:12]
Hannah Lee
I First was very fascinated in continuing my furniture design work. I thought about moving to like Hudson Valley, where there was a high concentrations of incredible builders. Thought about living out in Joshua Tree as well and fabricating my own line of furniture objects. However, as I saw how the market unfolded and I saw how contextually interior design played such a big part in bringing the artist's story alive and bringing objects alive, I was always fascinated about how I can also dabble in that space.
- [03:44]
Caitlin Petersen
As Hannah began thinking about what it would mean to start her own design firm, someone very close to her was also considering their next move.
- [03:54]
Hannah Lee
My brother was trying to figure out where his path would end up and his role as a data analyst in Silicon Valley and where I was landing as a multidisciplinary designer. We both decided we should start an interior design practice together. And combining both of our very different skill set could really hone in a really cool combination of what is, you know, family craft and bringing a firm that has a very different cultural perspective. It's also shaped how we've approached the business. It never really felt like, you know, we're just building a business. It feels like, at least for my brother and I, it's continuing a lineage and translating that into a more contemporary context.
- [04:39]
Caitlin Petersen
In 2016, Hannah launched her Los Angeles firm with her brother Jeff.
- [04:44]
Interviewer
I wanted to talk to her about
- [04:46]
Caitlin Petersen
how she's measuring the carbon footprint of every project, why she produced short films about her firm's work, and the reason every role she hires for comes with a five year plan.
- [05:02]
Interviewer
You were talking about this idea of, you know, getting more and more confident, I would say, in sort of the values and the worldview of your firm. But what were the early days of the business like as you really tried to figure out what it was going to take to apply those values to client work?
- [05:20]
Hannah Lee
The early days at our firm was difficult. We were in our early 20s, so I think we were trying to understand what our brand would look like. And that took a lot of less active force of participating in design, but more so on the back end of just listening to clients, to references and what I thought design should be. So it's definitely a lot more flexible than I should have been. A lot of accommodating, trying to make things work, prioritizing, you know, harmony over clarity of the business. It wasn't until we started working with an executive coach, I think year four, how we gain a lot more clarity into what exactly it is to sustain a business, but also create this vortex that feeds our creative soul.
- [06:17]
Interviewer
Yeah, I think it's really easy in a design business to get lost in the details of executing a project.
- [06:25]
Hannah Lee
Absolutely. It's challenging to kind of have an executive eye, especially because that wasn't something that was taught in college. So when we quickly shifted to, you know, wearing multiple hats and learning how to build a business while maintaining the creative feeling, it really also shaped us to become young adults in our early 20s. And that was kind of cool.
- [06:52]
Interviewer
What made you realize that you needed or wanted to work with an executive coach? And what was that process or experience like as you moved through it with that coach?
- [07:03]
Hannah Lee
It was one of the most transformative things I've ever experienced. When I was working just with my brother as partners at the firm, and we had, you know, a few designers, it was very lean. We weren't able to create frameworks on our own. And so there wasn't a lot of clarity about the next stage. There was a lot of clarity about the different years and how they were trending. But how do we strategize and how do we make decisions? How do we create protocols and standards? How do we communicate as a team? And working with an executive coach really addressed all those pain points that we were struggling with. What our executive coach, Chris brought in was so much of the outside world experience that applies to all businesses. And so I think now, if I was to start another business in furniture production or whatever, fashion, apparel, I can apply the same business principles and practice into those businesses.
- [08:09]
Interviewer
What were some of the most transformative questions you had to ask yourself in that process? And how long was the process before you really kind of came out the other side and felt like you had made major change?
- [08:22]
Hannah Lee
Yeah, it was a course over one years. We saw our company 2x our revenue. That was so satisfying to see.
- [08:32]
Interviewer
That's like, that's a pretty great proof point to be like, oh, this works.
- [08:36]
Hannah Lee
Absolutely. I mean, we thought what we were doing was working already.
- [08:41]
Caitlin Petersen
What were.
- [08:41]
Interviewer
What were some of those things for you? What were the problems you had sort of seen in your business that were like, the initial things you wanted to tackle?
- [08:49]
Hannah Lee
What we thought. Yeah. So originally we thought we would tackle more business practices. And it. A lot of it actually was more relational. The relationship that I have with my brother and how, you know, just certain decisions were being made at our firm because running a family business, it's. It's so different. We have. We constantly step on each other's roles, and that creates a lot of frustration and stagnation. So having discernment of certain responsibility is going to fall Under a certain role and who is taking ownership of that role, who's responsible for that role. So those boundaries created a framework for us to have leadership and ownership in our role. And that was really beautiful.
- [09:37]
Interviewer
Where did you land? Where is your kind of purview and what is his zone of the business?
- [09:44]
Hannah Lee
I think in the beginning, you know, the lack of clarity, it felt like both my brother and I and I think everyone else at the business were all of our roles felt interchangeable. I think after working with a executive coach, I can clearly say my role is the creative director. My role is vision creator. We don't explicitly have like a CEO role at the firm, but Jeff, my brother, takes on all the sort of business development side. And our team, our, you know, project manager designers, they really manage operations, they really understand how to run projects. I would say they we had additional support roles that are part time. That also helps with Jeff's role in business development. So our business now feels like sort of two branches. The business execution and then the creative force.
- [10:44]
Interviewer
Did your team's roles have to change as a result of your role and Jeff's role sort of crystallizing?
- [10:52]
Hannah Lee
I think so. I think early on our project manager was doing a lot of creative work as well as purchasing and procurement. Our assistant designer were doing intern work, you know, and almost sometimes like, yeah, just the business assistant kind of work. So as we learned how to have structure that defined our specialty, our area of focus, and that then allow each an individual one of us to build sort of a program and like the five year plan of what we see for our role. And that really helped us create a bigger roadmap of how do all those team players come together in, you know, the five year plan?
- [11:36]
Interviewer
How big is your team today or what does the firm look like now?
- [11:40]
Hannah Lee
Yeah, our Firm is a 8 to 9 people firm and we have, you know, Jeff doing the business admin kind of work I do, you know, I'm a creative director and founder. Brittany is in charge of process and procurement purchases. We have a project manager, we have three designers on staff as well as a part time graphic designer.
- [12:08]
Interviewer
Where do clients see you in the process and where do they interact with Jeff or someone else on the team?
- [12:15]
Hannah Lee
So Jeff is the first person on our team that every client speaks to. He qualifies the leads and he speaks to the clients. And once he feels like that client is a really good fit with our firm, he'll direct that call to me and I'll briefly kind of understand what the client is looking for from There we'll schedule an on site. So I'm the first person on the team to meet the client, like in their physical space and get an opportunity to get to know their personality, their lifestyle and, you know, what do they value and what are they trying to do.
- [12:54]
Interviewer
Is that before you've decided if you'll take the job?
- [12:57]
Hannah Lee
Absolutely. And I think that's really, really necessary to understand like qualifying clients. It's like dating, you know, like you kind of want to do a quick video call, then you might want to schedule coffee and then if that goes well, you can build sort of a relationship off of that. And I think that's, that's, you know, relationships are really, really challenging. And our business is, you know, we operate on very, very intimate relationships that can last for six months to a year. So it's really important to know what is the next few months look like and how are these people in your life shaping who you are and advocating for you as a designer, but also you being their advocate.
- [13:45]
Interviewer
After that meeting, after that in person meeting, do you know right away if this is a job you want?
- [13:51]
Hannah Lee
I am so like, my heart isn't so much of like being in service of others. So I tend to lean more optimistic and I tend to qualify clients, I would say easier than my firm. I think they have a lot more discernment about like, oh, like is this personality going to be very difficult when, you know, we have a fire to put out and is their budget realistic? So I think it's interesting because I get to meet the clients and I get to be so involved in their personality and their values that I'm sold. I'm like, yes, like, let's do this together. And when that project gets triggered to our firm, who has to build a budget framework, has to create timelines and you know, create all the constraints about like what we can do and can't do. They have a much different perspective because they're, you know, they don't, they don't get to have that in person meeting.
- [14:48]
Interviewer
So they jump right into sort of the budget piece of it. At what point have you signed on, signed a contract and started the project? Is that after the budget process?
- [14:58]
Hannah Lee
Yeah, we, we first qualify the lead with Jeff, then I meet the client on site. I get to, you know, understand their, their needs. From there. I passed all that information to our team, to our project manager and she'll run through kind of a list of priorities and lower priorities. She'll build that budget with our time estimate. Our firm charges by time and billing so we bill by the hour. So she'll create an estimate of how much time that takes for a firm to execute. When she packages that, Jeff and I will forward that budget proposal to the client, which then we hop on a call with them to kind of discuss, you know, does this look in alignment of what they're seeking? You know, are they comfortable with it? And then that's when they kind of give us a stamp of approval and we'll draft a deposit request as well as a formal contract agreement. I try not to be too hands on with, like, all the operational aspects of the design. I think my most valuable asset is being a vision creator as well as running the business. So if I'm involved in every single client, it would take so much more time for my firm to understand, you know, my thought leadership. A lot of that is built into a protocol, a lot of that. They are already trained on what we call. We schedule an internal discovery meeting where they get to learn about, you know, things that I care about and the values I want to bring forward in the project, certain things that the client and I discuss on our initial on site, and from there on, I really expect my team to translate that into the physical, tangible manifestation of all these things. And so I trust them and they're all leaders at the company. And I try to be very hands off with the projects. I mainly am the source of decision making when it comes to, you know, overall vision and how do I see this project evolve?
- [17:00]
Interviewer
Are you meeting with the client again to get more information as you build the design? You know, are the, are the designers in touch with the client, who's presenting, who's sourcing all this stuff? I'm getting really granular because I think so many designers I talk to want to move more into that creative director role. And it sounds like you have it figured out.
- [17:23]
Hannah Lee
Yes, I think the first thing is relinquishing control and trusting others, trusting that you have the ability to communicate the vision and that there will be people who can deliver that. Like, having that trust is so difficult. You know, I struggle with that in, like, my romantic relationship, so. Right, right. It's. It's been hard to harness that in my business practice. But luckily all of the, you know, people we've recruited and hired are so outstanding and so outspoken, so they hold a very strong boundary. When I do cross that line with them, I'm just like, no, that's my role and that's. That's me making decisions. And so I'm so grateful that I have a team like that. I think the most important thing is the hiring process. What are you qualifying when you hire and what kind of, what are the qualifying traits that you see necessary when onboarding designers or project managers? Because our project manager, you know, she, she goes on site and meets a client, she asks for, you know, all the deliverables and also interviews a client for inspiration and lifestyle and you know, any like nuances they care about in their space. Does it have to be baby proof? You know, are there any materials that they just absolutely. To test so our designers can take kind of our in person survey and allow those filters to create like the agenda of the project and then at that point they'll come to me. You know, I think that's like a couple weeks in the project. They'll come to me and go, hey, look, this is a floor plan. You know, this is what the clients value. This is what we surveyed with our project manager and this is what the project looks like. Is the vision that you want to bring to executing for this client still in alignment? And that's when I'll tweak my vision because the initial onsite and kind of the in person discoveries that my project manager will learn, sometimes there are disconnects and then when we bridge all those disconnects together and we kind of problem solve as team, we can then repackage, you know, a more cohesive vision, a more updated design deck to present to the client. And I don't sit on those meetings purely because I really am like cognizant of clients time as well as my time and not sort of over billing for having too many, you know, cooks in the kitchen.
- [19:54]
Interviewer
You have these incredible testimonials in a part of your website with clients talking about, you know, your approach to conscious living, to breathwork techniques. I'm reading one specifically how to be healthier. The details of that feel really powerful to me. Can you talk a little bit about how you're bringing some of those core beliefs of yours about how your clients can live better, better and really folding that into kind of the fabric of the work the firm does?
- [20:31]
Hannah Lee
Yeah, absolutely. I think what's been really special is that all the projects we designed, we really care about building environments that people can live in emotionally and not just physically. And every project is this beautiful narrative of culture, of heritage. But most importantly, it's the sense of living and also future living. It's a lot about, you know, treating everything as an art form, thinking about ancestry, thinking about discipline, thinking about how to incorporate technology and how do we think about living close to the land, simplifying our life, living a more intuitive life, and working with nature. And so that naturally encouraged us to just focus on like, you know, modalities that are very sort of wellness biohacking driven. Whether that's like, you know, living off of the land and having a community garden or doing breath work workshops at our home. All of this is just to allow our spaces to feel more grounded and more personal. And so I, you know, I talk about these three principles, which is like, how do we allow clients to live happier, promote better relationships, and live longer? Longevity is something that we like, deeply emphasize at our firm.
- [21:54]
Interviewer
How can you shift design to create all three of those things? What are examples, maybe in recent client projects of the interventions you are making that lead to those outcomes?
- [22:07]
Hannah Lee
I have been really inspired by longevity for a very long time. I think, like, you know, growing up in an eastern society or embodying kind of Taoist spiritualism, all of us feel in some way like a deficit of like, living our fullest potential. And it's the food that we consume, right? It's. It's our relationship with the food. So I think it's been a long time in the making of like, thinking of, hey, if we're gonna do a, a landscaping project, how can we incorporate a lot of those elements that are edible, right? Like, how can a lot of those plants promote more bee colonies around the neighborhood? Like, but it can also just be herbs that we can make tea with, right. That we can make, that we can cook in our food and, and vegetables that we can eat. And so a lot of that plays into, you know, longevity and the products that we source in the interior, right. Like the fixtures, the materials we really promote for natural materials. So using a natural marble over a quartz, a man made material, I want to bring us back to that place of like, living in harmony with nature. Understanding, like imperfection is, is part of the beauty. You know, the marble chipping and wearing, like, degradation of material that is part of the natural way of life. And us learning, like beauty is in aging. So a lot of how we design is it's more a sense of living less so than like, discipline, structure of how we think of, like, what interior designers play in beautifying homes.
- [23:58]
Interviewer
How do you teach that mindset to your team and how do you teach that mindset to clients so that they can truly live better in the homes you're creating for them?
- [24:09]
Hannah Lee
Yeah, as part of our, my initial on site, a lot of these questions come up. You know, the Client will kind of ask me, hey, what do you think about this kitchen layout? And immediately I'm like, well, how does it make you feel when you're in here? Like, what makes the space come alive? And they're like, well, making coffee in the morning for me. And I'm like, great, then let's think about that as like, one of the design elements, right? And how if. If this is so special to you, how is it organized and what kind of coffee maker? You know, the smell of coffee. Then what do you see? Like, do you want to be a teleprom? Port it into this sort of like hi fi environment in Tokyo? And that's kind of the. The coffee brand that you embody, or is it something more rural and Peruvian and, you know, layered? What is that tone? When we feel that, right? And that allows us to extrapolate colors and the tiles and the materials that play with, you know, this idea of like a coffee making station. When I communicate that to the team, it's very philosophical because I'm not exactly pointing out like, oh, we need this material, and then this would equal that. There isn't, like, one product solves all. And so I really layer my communication with, like, certain design philosophies. I talk a lot about design philosophies, I talk a lot about way of life. And then I let them explore that notion because they can interpret that and bring something completely different and still land as long as those same values are embedded in their sort of design presentation. So I think this is what makes it really fun at our firm, is like, each one of us is going to express differently. It's going to. We're going to interpret that philosophical approach really different. And I think that's what makes our firm, like the product of our work, constantly evolving and very unique. It is a lot about working together and not an isolated. Like, this is Hannah's vision and this is the material she wants to use, and this is the output of the look. It is so much formed around, like, oh, you know, if this is how a client wants to feel, like, how do you interpret that? Right? And it's really fun and it's constantly evolving, and I'm constantly, like, just surprised with what my firm and I come and bring to the projects.
- [26:37]
Caitlin Petersen
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- [27:41]
Interviewer
One of the things I was thinking about as you were sort of explaining those kind of thought starters or the way that you're kicking off a project is a challenge that we had here at Business of Home Covering. And I'm gonna use the word sustainability as a category because it was so kind of slippery. Like, what is sustainability to you? Right? What is wellness to you? I feel like you are someone who must think about this a lot. What does it mean to you?
- [28:11]
Hannah Lee
That is literally the million dollar question. I care about investigating this so deeply that our firm, on every single budget proposal, you will see a 1 to 2% fee. And it's like, it's literally called like sustainability fee or recycling fee, whatever it's called, we use that 1% kind of a donation, non negotiable fee to fund a group of researchers that I've been working with to literally investigate like what is sustainability so much. So I enrolled at the, the Harvard Graduate School program to learn about sustainability and global development. And what I have now gathered is, you know, sustainability isn't so much like a material. It's not just a logistical thing. It's not like how we source. If we want to be sustainable, it would mean having the entire vendor ecosystem pivot their way of operation and their sustainability practices, their recycling practices in order for us as a product that sources from like hundreds of vendors to become sustainable or you know, like have a zero carbon footprint. Either that or we build a studio like the one that I'm really inspired about to build a woodshop in Bali that's completely living off of the grid. Even so, there is still a little bit of like logistical involvement with like, you know, shipping, but that's really low. And I mean what's great about AI nowadays is you can, you can prompt like on, you know, chat, hey, these are the two alternatives and break that down into what the output of like carbon footprint looks like. So there is actual transparency and measurable tools that we can use with the support of AI engines to learn about like, pros and cons. I think it's very difficult to build a project and form a project around sustainability. Your client has to want to investigate it as deeply as you do. Right. And it can eliminate a lot of vendors that simply are not up to the standard of like, whatever you're measuring. And so our firm, you know, starting like, like last year, we built our own wood shop and we are experimenting heavily with how do we rethink furniture with, you know, all the instruments that we have to measure output and measure waste and measure carbon footprint. How can we better our system? So a lot of the custom millwork we're doing is in house and it has complete transparency, but that is still like, I don't know, 5 to 10% of the project. Right.
- [30:56]
Interviewer
And is it more expensive for the client? Not to be a naysayer, but it's
- [31:00]
Hannah Lee
expensive for us because of all the upfront work we had to invest and do, getting the equipment, you know, just the education. Right. And we're so blessed. Our clients have never like, you know, raised a question on like just not wanting to support the, the little donation they give on, on their project. So we're very lucky that our clients are in support of that. But, you know, it's, it's difficult if you want to really have full transparency. You truly, really have to like, do a lot of things in house. And like, we try to do that as much as we can as it comes, but it's difficult, it's difficult to invest in that because it feels more like a passion project than a necessity. And I think this is the thing, right? Like, sustainability doesn't happen overnight because it's incredibly inconvenient. At the end of the day, it's like, how much do you value something? Right. Like, I have decided we're going to commit 10% of the projects to doing in house meal work. Okay, great. And can we continue to trim in other aspects, sourcing vintage and putting all the things that we source into a spreadsheet, allowing Gemini or chat to kind of do a run through and give us like carbon footprint output. Right. Like that has really helped our business. And just to go, hey, every month we're going to change one decision we make. We're going to change one habit that we make, but not shifting the business entirely where it's impossible to scale because it's not profitable. And so I think we are learning, we're continuing to be profitable and becoming more profitable, but it just takes time and it takes patience and it takes the desire to Inquire, what does sustainability mean for you?
- [32:53]
Interviewer
Can you tell me a little bit about the research that you're working on or the research you're in, the research you're funding?
- [32:58]
Hannah Lee
So one of our projects that we're building right now is just incorporating more recycled materials. And that was a research that we did with Max Lam, where our firm got to go to Bali and see a hotel called Potato Head and how they're reimagining waste and lowering, like, you know, their. The landfill problem. So that was really cool. To learn how they're taking, like, old linens and remaking them into, like, backpacks and T shirts. And they're taking, you know, all the glass bottles from. And recycling that into, like, I think they made, like, ceramics and other cutlery from, you know, the. The glass. So that was really cool. And one of the other research that we're investigating is just logistics.
- [33:55]
Interviewer
Do you mean, like, all of the freight sort of that's associated with moving all this stuff to install day?
- [34:00]
Hannah Lee
Exactly. And so we literally spent, you know, weeks, like, calling a lot of these vendors and just asking them, like, hey, how does this work? You know, and, like, what are your sustainability practices? And, you know, how do you compare to these other firms? So we can also have more. I think it's about having transparency. Because once we have transparency, then we can kind of ask, like, well, is there a better option?
- [34:25]
Interviewer
Right. You can start to, like, chip away at it.
- [34:27]
Hannah Lee
Yeah. If you don't really understand the ecosystem and kind of your. The sustainability practices in your vendors, then it becomes very difficult to build, like, a clear report to see. Does it make sense that we get a lot of things on first dibs, but it requires, you know, these logistics company to ship them and how sustainable are they? And does that offset, you know, what we're trying to do by sourcing vintage, or does it actually make more sense? This is something that we build in house, and, you know, maybe the client pays a small markup, but we really can justify the betterment of the environment because, you know, this. This is really valuable and this really matters. And then a lot of times what we find is the client is on our side and they do value the things that we value, but they don't have the time or bandwidth to also create, like, these transparency reports that, you
- [35:22]
Interviewer
know well and to build out, like, the model of, like. Well, what's actually better.
- [35:26]
Hannah Lee
Exactly. Yeah. If they could really see what's better in terms of environmental impact, then they can make a more clear assessment.
- [35:37]
Interviewer
When you think about, you know, you've taken so many steps to explore how to make meaningful impacts in your project work. But for someone at the beginning of that journey, what are the most impactful first or second changes that they can make? What are the first places to explore or start questioning the way that they're working?
- [36:03]
Hannah Lee
Yes, I think, you know, if you want a business to work, the business has to sustain itself first and then you can think about sustaining, you know, I don't know, like, other elements such as, like, what are you sourcing and you know, product lifespan and all that. Because without a business, you can't implement what you want to implement. Right. So learning how to build a sustainable business is one, learning how to build sustainable principles is two. And then learning how to build both those two things in harmony and understanding. Like at the end there is a reciprocity that happens when those two things are, are in flow. I think that's kind of the ultimate stage that, you know, really has allowed our firm to feel like we have a really strong foundation.
- [36:59]
Interviewer
Big picture. How does the firm talk about what design costs? How do you help clients wrap their head around the financial investment piece of this work?
- [37:11]
Hannah Lee
Yeah, I think early on we have already established what kind of price points the client is comfortable with. And if CB2 is where they feel like that's what they know, then we kind of have to go, well, is that kind of client a fit for our firm? And if we really feel like, okay, our responsibility here is to like complement their design taste. And we really care about people having design. A lot of times when we take on these clients, it's about getting clever and learning what are the constraints and how can we still feel incredibly creative. It's not really about upselling and pushing for things that they simply do not have the stomach to pay for. It might be just not at that stage that they're ready for. If we feel like the client is open minded and they have vocalized, hey, if there's a piece that's over my budget, I still want to take a look at it. I don't want to miss out. With that permission, we do present maybe like 10 or 20% of the furniture pieces or accessories fitting that requirement. And a lot of times I think how we present the product isn't so much like selling it isn't like, hey, we think you'll love this. This is beautiful. Like, we never open with like, I in mind. It's always about them. It's like, hey, well how do you feel about this? And they're like, this is really cool. You really hit the nail on the head. Like, this is exactly what I was looking for. That's what we want. Less so as needing to persuade a client. I feel like if we ever need to persuade a client, it's because the product did not speak for itself. And it did. It did not land in the true alignment of what the client wanted in the first place. You know, I never want to convince someone like, you must date me. And here's why. Like, this is all the wonderful attributes our firm offers. You know, it's kind of like, hey, this is what we are offering and this is what we, you know, feel like meets the alignment of what you're looking for. What do you think? And they'll land at that decision themselves. And that decision will feel so much more empowering when it comes from them. Rather than us suggesting, do you present options then? Absolutely. We create a mood board of sort of our favorite picks and then sort of a secondary mood board or flag. You know, these are secondary runners. Then we have multiple slides that might offer, like, three to five additional pieces that we can kind of bring in and swap into the mood board.
- [39:50]
Interviewer
And then are the designers workshopping? Like, okay, if you picked this off of that secondary page, here's what it looks like in the mix in real time, or is that something that they see later?
- [40:00]
Hannah Lee
We love having working design meetings. I find it a lot more efficient than having, like, all these, like, small meetings and, you know, email revisions. So we use Google Slide when we present to clients. We literally pull the furniture item, we scale it in real time, and we drop it into the mood board. And clients also love this because then they start kind of playing around as well, and they're like, oh, my God, you know, this is like dressing up your little Barbie. And so they also get to see in real time, like, oh, this is really funny. Brandon, one of our designer is, you know, is making this decision, and Hannah's on, you know, like, the back end, like, making these decisions, and they get to see how we play. And I think clients love to see that more than. More than we know. Yeah.
- [40:49]
Interviewer
So you're in that meeting.
- [40:50]
Hannah Lee
I tend to be more back end. So as our team is, you know, shuffling designs, they already will kind of say, hey, you know, actually, Hannah really like this. If this wasn't your, like, runner app, this is what she thinks. So kind of my. My input is already, like, seated in there. Yeah, exactly.
- [41:10]
Interviewer
What's been the biggest financial challenge of making a design business work for you in the firm?
- [41:16]
Hannah Lee
I never really Played by the same rules, like, as most firms, I took a lot of risk, we were in a lot of debt, and then we spent two years getting out of that. So, like, I wouldn't prescribe that to be the way to build a business now.
- [41:29]
Interviewer
Okay, I hear that. What kind of risk. What was your. Can I ask what your debt was?
- [41:34]
Hannah Lee
Totally. I mean, in the first couple of years, I think we were in debt, like, 150k because we took the first project. And with, you know, the $30,000 design fee that we made, I invested a team to continue pumping out more projects. And I was like, you know, at some point this will taper out. Like, at some point, we'll see the profit margins grow greater than the debt. And that did happen, but it didn't happen in year two. It happened in year like, three or four. So it was just one of those things where I was like, hey, I believe in what we're going to build so deeply. I believe this is going to become, like, feel for ambition and motivation rather than feel for fear.
- [42:19]
Interviewer
But you don't recommend that as a business practice.
- [42:22]
Hannah Lee
I don't. I see so many of my friends going from employees and wanting to take leadership positions with, wanting to grow their own brand. And then when they asked me this question, I'm like, oh, gosh, okay, this is how I did it. And I don't encourage that for anyone else. I don't think a lot of people have a kind of stomach to pull that kind of risk. Right. And I, you know, I always suggest to them, like, save up, have a little bit of savings, but move fast. And don't think about the money too much. Think about what you're bringing to the table, how are you helping other people? And if that's truly rooted in what your. Your mission is, your clients will see that, you know, these projects will really, really shine, and they will refer you and they will come back in tenfold. And that is just how the Seed of Life works. So that kind of, like, philosophical approach worked for our firm. And I believe there's a way to do it with a lot more structure. And I actually think working with the executive coach is one of the best things to do that in the beginning of the startup phase.
- [43:32]
Interviewer
Oh, like earlier, you wish you had done it earlier?
- [43:34]
Hannah Lee
Absolutely. I wish I had done it maybe a year, two.
- [43:38]
Interviewer
Okay. Like, I know who I am a little bit now. Help me crystal, like, shape it.
- [43:42]
Hannah Lee
Exactly. And just learning how to, like, build more profitable projects. Because I think as a young creative, you really don't understand, like, the concept of, like, self worth in your work. And I really identify with that. You know, I really struggle to feel like, hey, we're deserving of this and we should charge for this, and. And, you know, this is the quality of the work that we're delivering. And I think that sense of self worth translates to confidence. And when you're confident in what you do, people will trust you and they do want to give you projects.
- [44:25]
Interviewer
What is the volume of work that makes the business profitable today?
- [44:31]
Hannah Lee
So what makes our business profitable versus how many projects we do actually sometimes don't play a very close relationship. We consistently want to make sure our team is busy, so we fill our pipeline with small projects and big projects and small projects. If they have high markups, that's really wonderful. But typically we do them because we just, you know, we're at the end of day. I'm like, we're not just a business. We're in the. We're in the business of serving others, right? And, like, we should really focus on that as the forefront of our business. So we fill our pipeline with, like, two small clients a month, and then we'll have kind of an ongoing bigger project that lasts for, like, three to four months. So in totality, we do about 40 or so projects a year, maybe a little less, maybe like 30 to 40. And there will be about three larger projects that truly, like, pay for overhead and, you know, allows us to have, like, the. The funds to invest in the following years. And with all the other small projects kind of more being, like, opportunities to just, like, cultivate our team's, like, process and protocols and, you know, an experiment.
- [45:48]
Interviewer
You produce films about your firm's work. Can you tell me about those?
- [45:54]
Hannah Lee
During over the pandemic, I really got into, like, wanting to focus on, like, social media and being more engaging with my audience, but not in person. So that led eventually to, like, a series of, like, making these four short films that. That, like, was through my lens of how I understand design. And, you know, they're all very kind of satirical and fun. One of them being like, hey, design is not like. Spaces are not isolated. They come alive when we live in them. And the experiences that we have in them, the interactions, the conversations, the fights, like, everything that happens in them is what creates an imprint and what makes them so memorable. Like, this was one of the narratives that I really wanted to explore in the short film. One of them was about, like, spaces are never stagnant. They are constantly changing. And even just changing furniture placements can Allow us to feel fresh all the time. And it's so much about who we are, this constant need of change and how, how a home is like this, this really fun medium for us to do that. And then one of the other short films was a satire about like a client who hires a designer. And she's this very kind of stereotypical, like, very high end interior designer. She mentions a lot of things that completely goes over the client's head and it talks about how like, in the modern day and age, we're so tied to the idea of beauty that we no longer understand what beauty is. We look at these trends and go, oh, that's beautiful. That's what we want. But truly we have no like, personal relationship to those products. And this one short film kind of explores this notion of like an interior designer curating all these products in a home. But it's so, it's such a delusional idea of how we live. And I thought that was really fun to kind of play on, play on those concepts because, you know, our, our brand identity is all about living with nature and feeling grounded and believing in design. That is about the story of our clients and what's sentimental to them and not just the idea of a well designed space.
- [48:32]
Interviewer
How did clients respond to that? How did potential clients respond to that? Has that been an important sort of spark of conversation as you're assessing client fitness?
- [48:42]
Hannah Lee
I think it was really fun for clients to see, like, the range of creative mediums our firm likes to play with.
- [48:49]
Interviewer
Because you're acting in all of these, right?
- [48:52]
Hannah Lee
I was acting all of them. Yeah, it was, it was really fun. Yeah, it was, it was just so fun. And like, I am, I'm, you know, I'm definitely not camera shy. Like, I love expressing, I love, you know, acting. I love playing. And just for clients to go like, okay, like this designer is. She doesn't follow like the traditional, like, method of what works. You know, she's not doing like a specific marketing campaign that I see everyone else does. Like, she's indulging in her own personal endeavors. And this is really special.
- [49:26]
Interviewer
What does success look like for you today and how do you think about it?
- [49:30]
Hannah Lee
That is such a beautiful question. I'm in such a different place in my life. You know, when you enter your mid-30s, you have, you've learned so much, right? Like 20s. I was so ambitious. I was so, like, financially motivated in how I make decisions. And nowadays I'm just like, I'm at such a different pace. So I've just seen this business grown bigger than. Than me, right? Like, it doesn't feel like sometimes it's my vision. It feels like it's collectively something that's always evolving. So something I've learned is just to have humility in the work and trusting the way that we're growing in a much more sort of not a vertical growth, but a horizontal growth in, like, everyone growing together. How does that impact the way it grows? And surrendering to trusting that the vision will sort of come versus, like, in the past, I've been very like, here's the vision and this is how we're going to get there. And this is, as the coach helping us get there. It's so much more open, and it's so much more about building this. This harmony as a hive rather than an individual, like, spearheading the way. And you know, me playing such a heavy director and kind of a masculine role that I had in my 20s
- [50:49]
Interviewer
with that mindset, you know, shift. Did you have to set new goals for yourself?
- [50:56]
Hannah Lee
I have learned that, like, ultimately now my role is exactly where I. I want it to be. And it's so beautiful. And constantly I'm like, you know, is. Does my firm feel okay with that? Right. That, like, my role has, like, changed because I think I do a lot more admin. I think I'm building out a lot of other parts of the business. I'm heavily, you know, investing in the growth of our business, and I'm not as much client facing. Right. And so I think I really measure the success of our company's health based on our culture, like our team culture, and how happy is everyone at the end of the day, our clients, our contractor to the people that we work with. Do they feel like we've been a really awesome company to work with, and do they feel like they're waking up and this is their ikigai? This is the thing they want to do. This is not just a job, but it's a career. When I feel like I get to see my team dedicate themselves beyond just like, this is the protocol and this is what you have to do. And, you know, these are the tasks. It's so rewarding. It's so rewarding for me as a business owner to see how much they care and how much they love showing up because they really, really wanted.
- [52:18]
Interviewer
That's our show for today.
- [52:19]
Caitlin Petersen
Thank you so much for listening. If you'd like to keep up with
- [52:22]
Interviewer
the latest design industry news, check out
- [52:24]
Caitlin Petersen
new products or browse job openings, head on over to businessofhome.com and if you're enjoying Trade Tales, please leave a review on Apple Podcasts to help others discover the show. If you have a note for the show or a story of your own to share, I'd love to hear from you and you can email me at tradetales business businessofhome.com Trade Tales is produced by me, Kaitlyn Peterson and Caroline Burke. This episode was edited by Caroline Burke and Michael Castaneda. Our theme music is by Kyle Scott Wilson. Thanks again for listening and I'll see you back here next week.