[00:00:12] Speaker A: With over two decades of experience, Kate has mastered a signature style that feels both fresh and timeless, captivating clients across the country. What really sets her apart isn't just her aesthetic. It's her innovative approach to diversifying revenue streams. In her design business. Kate believes that a well designed interior should be a sanctuary, a comfortable haven that reflects the natural world and the unique personality of its inhabitants. Her philosophy goes way beyond residential design. She's carved out a space in E commerce, launched a showroom, and expanded into short term hospitality, all while maintaining a cohesive, curated aesthetic. In today's episode, we're going to unpack how Kate effectively uses these diverse revenue streams not just as standalone ventures, but as an interconnected sales funnel that enhances her design practice. From creating an inviting online shopping experience to showcasing her work in physical spaces guests can actually enjoy, Kate exemplifies how to turn multiple income avenues into a powerful marketing strategy. We are so excited to invite you to dive deeper into the Interior Collective. Podcast episodes now on Patreon unlock access to in depth analysis, helpful downloads and worksheets created with each podcast episode. Subscribers gain behind the scenes access to additional resources like examples and screens, screenshots of guest spreadsheets, construction documents, and so much more. Your subscription also gets you immediate access to our private community of interior designers and our team of industry experts ready to answer your questions? Subscribe
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Hello Kate and welcome to the show. I'm so excited to have you back. For those listening, Kate is my first recording of this season, season five of the Interior Collective and I'm kind of like pinching myself because it's a really big deal. I've actually never even gotten to talk to Kate before, which seems weird because I've been Instagram friends with her for a very long time.
[00:02:12] Speaker B: Thank you so much for having me, Anastasia. This is exciting.
[00:02:16] Speaker A: I'm super excited about today's episode because we're really talking about not just different revenue streams, which obviously is like critically important. I'm a huge fan of it. I practice it in my own, but also how they work as sales funnels for each other. So before we get into the nitty gritty of each of that, let's go ahead and give like a basic foundation platform to understand kind of where where you started, where we're at now. And then we'll start breaking down each of those businesses individually. So where are you based and what areas does your design business serve?
[00:02:51] Speaker B: I'm based in Barrington, Illinois, just outside of Chicago. My firm is Kate Marker Interiors and we work with clients all over the country. We handle projects from coast to coast and who knows, maybe eventually we'll add some international work. But right now we're only in the US so. And then my three businesses, I have Kate Marker Interiors, which is my design studio, Kate Marker, which is our retail and e commerce store, and Kate Marker Vacations, which is all about short term rentals and investment properties.
[00:03:29] Speaker A: I cannot wait to dive into each one of those individually. But I'm already, I'm already going off script gate because I thought it was interesting that you're like, eventually maybe we'll dive into international.
I just would love a little bit of thought process from that. For me, I'm just like, oh, the logistics of figuring all of that out in another country seems overwhelming. But I'm just curious why you haven't dove into that yet because I'm sure you've gotten requests.
[00:03:54] Speaker B: Yeah, we actually just got a recent request. We were doing a project for a client and we've done two homes from him from, for him now. And he says, well, I have a flat in London. Would you be open to London? And so we said, absolutely. And then we kind of all looked at each other like, wait, could we be international? So, you know, we would just jump right in and figure it out. But no, I haven't really thought about it too much more than trying to just, you know, extend help to a current client.
[00:04:24] Speaker A: Well, if you need someone to come hold your purse while you're working in London, I volunteer.
So let's go ahead and talk about the design studio. I'd love if you could break down what your team structure looks like in that field.
[00:04:37] Speaker B: Of course. So at katemarker Interiors, I lead the creative vision, but I really have an amazing team that makes everything happen. We have designers, project managers, support staff, all working together. We believe in collaboration to make sure that every project reflects our client's unique style, while at the same time having that cohesive KMI look.
[00:05:02] Speaker A: And how many people are on the team?
[00:05:04] Speaker B: We have a total of 16 right now, but we also have some part timers from our Kate Marker home retail brand. So if you total everyone, it's generally around 20, you know, through the holiday season we have a little bit more help too. So. And we're just, we're getting close.
[00:05:24] Speaker A: Absolutely. So, okay, you have a new project, they're going to have a project manager and a Lead designer. And then who else is assigned to that individual project?
[00:05:33] Speaker B: So project manager, designer, design assistant, and I, you know, lead the creative vision. I'm in all the presentations and just day to day, you know, of every really. Of every project.
[00:05:45] Speaker A: Absolutely. And then do you have like an executive team? Do you have someone who's acting as CEO and then like operations, or does that kind of all get divided up and split amongst the team and those roles kind of get broken apart?
[00:06:01] Speaker B: Of course. So we have an operations manager that is involved in really day to day operations. She also does a lot of hr. She's not really our HR manager, but you know, she kind of falls into that, of course. And then she manages like the overarching bookkeeping and finances and all that fun stuff. And my husband's a little bit involved in some of those bigger operational moments as well, but he's not involved in any day to day of my business. Mostly he's just my emotional support.
[00:06:36] Speaker A: Totally. Like a consultant as needed.
[00:06:39] Speaker B: Exactly.
[00:06:40] Speaker A: Um, curious. Who's handling procurement on your team? Is that going to be your project manager, your designer, or do you have a procurement officer that does it for all of your projects?
[00:06:49] Speaker B: Great question. So we do have a procurement manager that does all the procurement and expediting and that's been new to us actually. We've had her for just over a year and that's really transformed, you know, orders and proposals and just overall, you know, coordination for receiving for furniture. Just all of it. It's been amazing to have her.
[00:07:15] Speaker A: Oh, I'm so glad to hear that. I didn't mean to put her on the spot. So how's that going?
[00:07:19] Speaker B: It's been awesome.
[00:07:20] Speaker A: I'm curious, who did you have doing that on the team before?
[00:07:24] Speaker B: Really? Our designers, actually. And I think it was just overwhelming. I mean, I have a very small but mighty actual design team. There's only six of us total on the design side or the Kate Marker interior side. So that has for sure shifted where we needed a procurement manager.
[00:07:42] Speaker A: Yeah, absolutely. Does that procurement manager work on the E comm and retail side of things too? Are they purchasing kind of for both sides of the business?
[00:07:51] Speaker B: No, we have a buyer for. So we have a buyer for Kate Marker Home that does all of the buying and the management of Kate Marker Home.
[00:07:59] Speaker A: Got it. Okay. Thanks so much.
[00:08:01] Speaker B: Yeah, of course.
[00:08:02] Speaker A: I'm curious, with your small but mighty design team, how many new projects, like new start projects a year, is really your studio sweet spot? Like, what's a number that feels good for you?
[00:08:15] Speaker B: That's A good question, because that's shifted over the years. I think at one point when I was a baby designer, I was taking on like 20 projects a year. It was absolutely crazy. But currently we have gotten so much better about, you know, giving every project the time that and detail it deserves. So four to five large scale, full scope projects per year is our sweet spot for Kate Marker Interiors. And then we have a small scope project team and they take on about 8 to 10 projects per year.
[00:08:47] Speaker A: And when you say those numbers, that's like new projects starting. So you probably are carrying like 20 projects a year as they roll over from year to year.
[00:08:56] Speaker B: Yeah, it's pretty close to it. But as they roll over, you know, and with COVID the last several years, everything has really changed. I mean, projects have taken two and a half, three years when they used to take 12 months, maybe 15 months. So yeah, there's just this long year process that has just changed. And we're getting back to those days where projects are moving quicker because we can get product faster and be more efficient. But yeah, we're really, really trying to shift, shift to giving each, you know, project more focus and the time and detail, like I said that it deserves. And while we're also keeping those creative juices flowing, I know that for those.
[00:09:41] Speaker A: Listening, a lot of people are in that baby designer feeling. Yes, I will take 20 projects this year because, you know, it's a great project. It might not be as it's not necessarily a custom build, you know, new home, but I like the client and those three rooms are going to be great.
But there I know people are wondering, okay, well, how do I get to the point where just five projects a year is going to be enough for us, as in enough financially? And so it's like, how do I level up to that, to that next tier of client that has, you know, larger budget and is prepared for a larger scope.
Where in, in your career were you like, okay, I'm gonna start saying no to some of these inquiries to make room for those. And how did you start getting those inquiries that were like, okay, this is a, this project is worth four other projects.
[00:10:38] Speaker B: Right. And I think that happened for us just not that long ago, maybe two or three years ago in the COVID shift. To be honest with you, you know, I, I had, I hired my first employee back in, let's see, was it 2012? And you know, I worked on my own since 2007. So for five years on my own. When I hired that employee, she was with me for several years. And when she left to start her own business, I kind of had this pivotal moment like, where do I want to be in five years? Where do I want to be in 10 years? And you know, just for the overarching, you know, do I want to add a retail brand? Do I want to, you know, now, which we'll talk about more, I'm sure, this vacation rental business, all these things. And I hired a consultant that really helped me kind of shift our thinking with our projects. And that was a pivotal moment for my business at the time because it really helped me step back when I wasn't so integrated in every little thing. And you know, Covid, I think that, you know, happened for a lot of businesses at the time, but we really shifted some mindset and goals as a team and what we were looking for. And that's when things started to change where we said, we're only going to take on full scope projects from the Kate Marker interior side. And we launched Kate Marker Home and changed over to only small scope projects. So it's pretty great to be able to service clients all around.
[00:12:19] Speaker A: Yeah, absolutely. And we will dig into that a lot deeper because I think it's such a brilliant business model. But Kate, I'd love if we could chat a little bit about this concept of you hiring a consultant.
Was it an interior design business specific consultant? Was it more of a startup consultant? Like what type of person or offering did you seek out to find someone that seemed like it was transformative for your business? And the trajectory of Kate Marker Home, it was amazing.
[00:12:48] Speaker B: She actually came to me through just like reaching out. And it was at this time where I needed it. And I like really stepped back and listened to my gut like, hey, this could be something great for me. I remember having a conversation with my closest girlfriend at dinner saying, okay, I'm at this transition moment and. And she said something about like, oh, would you hire a consultant ever? And I thought, oh, there's no interior design business consultant. Like that's not a thing, you know, and. And then like a week later, I mean, it was, it was crazy. I got this call, like sort of a cold call from this company out of Texas. And he, this man told me about what they were doing and it was a referral through another designer friend of mine. And I listened and his business partner is now my business consultant. He kind of shifted, you know, shortly after and started running a different type of business. But I'm now with her and she's been with me really for the last three years. And Just kind of, she's not local to Chicagoland, which is where I'm at. But she, you know, is really involved in some of the bigger picture, you know, business, not pr, nothing like that, but bigger business details and setting goals and culture and you know, all that kind of stuff that I was like figuring it out as a, as a baby designer, but I didn't really have it figured out. So. Yeah, that's really, really helped the business grow. Absolutely.
[00:14:20] Speaker A: Thank you so much for clarifying that. I have just a couple more questions about that for someone who's interested in working with someone like that. And I'm sure every business consultant prices and does things differently, but was it like a one time fee and it's like, okay, we're gonna do an overhaul, like a full audit essentially, and then there's an option to continue and like we'll check in quarterly. Or is it like, like a PR agency in the sense that like you'll have a monthly retainer with them and it's just sort of an ongoing program?
[00:14:50] Speaker B: Yes, it's a monthly retainer and then it's an ongoing program, depending on what your needs are and your business needs. Yeah.
[00:14:57] Speaker A: Okay, that is super interesting because I think a lot of us get in the mindset that like we're in this business, it's kind of, it's getting better, but it's sort of a hush hush business. And like you said, there's not consultants who specialize in this. Like you can't just walk into some office building and find someone who's going to talk to you about it. That's true. So that is so helpful. You mentioned back in 2012 was when you had, you made your first hire, is that right?
[00:15:25] Speaker B: Yes, yes.
[00:15:26] Speaker A: And can you tell me what that role was?
[00:15:29] Speaker B: Yeah. So my first hire was a design assistant. She was such a huge help and it allowed me to focus more on my creative work. Why someone else was managing my day to day. It was a crucial hire for me, but a scary hire, you know, to hire somebody. You know, I was doing it all myself, trying to figure it out and. But it was exciting to, to hire. That was. So in 2007 I started my own design business and then my first hire was five years later.
[00:16:00] Speaker A: Now fast forward to today. If money was no object and you were just evaluating your businesses, where they are, what would be your next hire? Today?
[00:16:10] Speaker B: Today a cfo.
Absolutely.
Getting those finances in order is a game changer for sure.
[00:16:19] Speaker A: So your next step in your business was that Kate Marker Home or was that you diving into those vacation rentals?
[00:16:27] Speaker B: It was Kate Marker Home. So we launched Kate Marker home back in 2019, so about five years ago.
[00:16:34] Speaker A: And when you launched Kate Marker Home, had you always had your warehouse brick and mortar like a physical space, or did you launch E Commerce first?
[00:16:45] Speaker B: We actually opened our brick and mortar store first, which is attached to our design studio. And then later we expanded into E Commerce, you know, as a way to reach more people.
And it was then 2000, a few years later actually where we expanded into our warehouse space. And our warehouse was just, I mean, we had worked with so many different warehouses throughout Chicagoland. And you know, the business is really about serving our clients right from all the way to the beginning to the end. And it was just a very tricky process for us. And that final, you know, I always say the final 10% is what every client remembers. And when other warehouses were receiving our product for our clients, it was, it was just sort of a scramble and you know, products were broken and not, they were shifted to another designer's order. There were so many, so many problems. So we ended up starting doing our own receiving. And that was like a really big shift too in our, in our design business to have that control from start to finish as a full team.
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So this is a perfect example of kind of those sales funnels that we're talking about today. Do you feel like you run the warehouse through the design studio, or does that really run more through Kate Marker Home? Obviously, it services both, but from, like, an operations standpoint, which one do you say it would like leans more on?
[00:19:52] Speaker B: Oh, definitely Kate Marker Home. We call the warehouse space our Kate Marker Home store, because that's where all product is being received, but also being shipped out of if it's, you know, not local. And then we have a little design shop attached to our design studio and downtown Barrington.
[00:20:10] Speaker A: You mentioned earlier in the show that, you know, you feel like you're at a really sweet spot where you can serve really all different types of clients. And I feel like Kate Marker Home is probably where that really comes into play. Can you talk to me about who Kate Marker Home is really serving? Are they your existing design clients, potential design clients? Are they people who are likely to actually not end up hiring you? Like, what is that ideal client for Kate Marker Home?
[00:20:39] Speaker B: I would say all of the above. Some of our clients for Kate Marker Home are current or past clients, But a lot of our customers are people who love our esthetic and want to incorporate it into their homes. Even though they might not be ready to fully invest in a full service design, they can come shop our product and get our look and style into their home.
[00:21:02] Speaker A: And can you talk to me a little bit about. I know that you said you have kind of like a. A smaller or I guess you could say more brief design service that runs through Kate Marker Home. What does that look like?
It's.
[00:21:16] Speaker B: Yeah, it's a small service design. So it's mostly working with product that we have in stock, but it's also doing custom furniture. But it's really the decor side of our business. It's not intricate, you know, construction designs or millwork designs or plumbing or electrical like we do from Kate Marker and tears. But it's, it's. It's decor. So it's a small one room all the way up to a whole home of a home that's ready for decor.
[00:21:49] Speaker A: And so for that kind of service, that would be someone who's like, hey, I just moved into this, you know, new Build or we love our historic house and we're not ready to renovate it, and they can come in and essentially you'll furnish everything for them. And is that something. Are there additional design fees associated with that, or is it just like you guys make the markup on it? How does that work as far as, like, profit margins for your team?
[00:22:14] Speaker B: Sure. Well, we quote it. You know, we quote it like we do in a large project where we give a design fee. I did hourly years ago for clients, and it just never worked. It was so stressful to send out those, like, hourly invoices at the end of the month. And no matter what, all clients were always shocked about what it takes to do a design. And so now we come in and we say, this is what it's going to cost upfront. If there's major changes of scope, then we have to have a conversation. But generally, we're all. Whether it's a small project or a large project, we're giving a design fee.
[00:22:51] Speaker A: Got it.
Okay. So I feel like. I mean, I'm thinking through this timeline. You opened this in 2019, 2020. Covid hits. How. How much did Covid affect the, you know, kind of infancy of Kate Marker Home? And was it a really scary thing when everything was closing, or were you quickly putting things online? Like, how did you make it through that storm?
[00:23:18] Speaker B: Well, it's great to ask about. It was. It was a great time in retail for everyone. Right. So we really exploded. We already had our business, and like I said, we. We started in 2019. It started with vintage rugs. I had this passion for sort of the. The history and a story that comes behind vintage rugs. And then every one of our projects, we were posting, posting, posting about them and sharing, and everyone was asking, where can I get that vintage rug? So we launched Kate Marker Home just with the start of vintage rugs. And then it eventually grew. And. And then when Covid hit, you know, shortly after, in 2020, it just. It really expanded from every accessory, you know, down to the vintage rugs, to lighting and more.
[00:24:08] Speaker A: And so did you. I mean, people stopped coming into the small retail space attached to your design studio at that time. Right. So it was really. You really shifted to E Comm at that.
[00:24:20] Speaker B: Before shipped. Yeah, it was all about ecom. And, yeah, it really expanded, and it was exciting, but a little bit hard to keep up with because all of our, you know, design team was working from home. I remember we had a retail stylist and specialist that would come in on her own to get shipments out at the door at the time.
We would, like, do shifts. You know, she would come in and somebody else would come in and. Yeah, a lot.
[00:24:46] Speaker A: That is a lot.
[00:24:47] Speaker B: But it was nice. Like, you know, it was nice to get out of your home for a change. You just couldn't really be around each other.
[00:24:53] Speaker A: I bet. I bet it was nice to have somewhere to go.
So we get. When we're working on branding and websites for our clients at IDCO Studio, we get so many designers who were like, okay, I've got to open E. Com. Like, they're like, that's my next step. And just being on the back end. Logistics of, like, actually facilitating this for someone, it is really a expensive. But also just like, there's a lot that goes into it between preparing for damages, figuring out shipping, having to compete with things like Amazon. That was like, something shows up in two days and it was free.
What are some of the hidden costs that you weren't anticipating when you launched E Commerce?
[00:25:39] Speaker B: I would say, you know, start small and build gradually and, you know, focus on curating a collection that's cohesive with your brand. Hidden costs. Online retail is just expensive. And shipping is, I would say, probably the biggest part to figure out freight. And shipping in general is something that a design firm does not have control over. I mean, it's just. It is what it is with. With getting product to and from. Right. So I would definitely, you know, keep that in mind. And that's definitely something that we've had to work through, and we're still working through.
[00:26:21] Speaker A: How did you. One of the biggest barriers that I come across is like, what happens when someone in rural Idaho purchases one of your beautiful custom sofas? And you're like, how do I even get this to you when, you know, you have. You don't even have their address at that point until they place the order. How are you providing those shipping codes? Or are you just prepared that on some pieces you're going to lose on shipping?
[00:26:51] Speaker B: Yeah, I mean, some pieces we are going to lose on shipping. It's just. It's part of it. But we have with our. Our retail E Commerce. I mean, I have a whole E Commerce team, and they're amazing. And they. They've got that dialed in and figured out, but it changes. It's a. It's pretty much an app that attaches to your Shopify page and helps you. Helps you figure that out. But sometimes we do lose because with. If it's a white glove that's, you know, it adds up. It's expensive.
[00:27:21] Speaker A: Yeah, absolutely. So before we move on to your third major business category, how do you feel? Like Kate Marker Home funnels the other two businesses.
[00:27:33] Speaker B: Yc. It supports both the design studio and Kate Marker Vacations by offering an extension of our aesthetic. You know, clients and guests can bring pieces of our designs into their homes whether or not they hire us for full scale projects.
[00:27:54] Speaker A: When you're thinking about Cape Merker Vacations, I'm really excited to talk more about this. How many properties are you up to now?
[00:28:04] Speaker B: We have three properties right now and we have. And one of them is a collection of cottages. So it has four cottages on it, so we could say seven.
And then we have one that's in the works.
[00:28:20] Speaker A: So exciting. Do we get to know where the one in the works is?
[00:28:24] Speaker B: Yes, it's in Lake Geneva, Wisconsin, which just is a click away from where I'm located. It's about an hour from us.
[00:28:32] Speaker A: Oh, well, that sounds ideal for you.
[00:28:34] Speaker B: I know. It's like the one that we finally feel like we can actually potentially project manager ourselves. You know, our property manager, I should say. Ourselves.
[00:28:44] Speaker A: Yeah, absolutely. That's so exciting. And how far out is that. Is that property?
[00:28:48] Speaker B: Probably we're just getting started on it, so we're trying to finish it by this spring so that we can have, you know, this, this great vacation rental and in Lake Geneva. It's bumping there. I mean that it's crazy, the real estate and how much. How much is happening in Lake Geneva, Wisconsin?
[00:29:07] Speaker A: Amazing. Okay, so let's dig into the short term rentals, vacation rentals side of the business. What was your first project and what made you feel like it was the right time? Because I feel like this category is super interesting to interior designers. Like it's like passion project or it feels like it would be a passion project. So talk us through where it started and like how you took that leap to make it happen.
[00:29:32] Speaker B: Of course. It definitely was a passion project. It was back in 2016, we purchased the property. So the Leo cottage was our first property in Union Pier. It was. It just felt like the right time because I wanted to offer something beyond just design images or mood boards to create a space that people could live and experience our designs but not necessarily have to hire us to. To experience them, you know, not just see it on an Instagram page or a social media page. So really all of our vacation homes are extension of our brand, so it's been very rewarding to see them come to life. And, you know, it's actually fun not to have a client for once to kind of feel like, yeah, you're a client for all these people that are going to stay there. But it's not like you're getting into that nitty gritty, like personal experience like you do when you're doing someone's own home.
[00:30:28] Speaker A: Yeah, absolutely. So when in 2016 when you were purchasing the Leo cottage, was there, was it always 100% meant to be used exclusively by clients or guests who were going to come stay? At that point, were you still thinking like, this will be our family cottage and we'll rent it when we're not using it or like what was the intention for the business at that infancy moment?
[00:30:57] Speaker B: Yeah, Anastasia, it was exactly that. Like we thought with this would be an investment property because it's about two, two and a half hours from our home. But we thought of course we were going to try to stay there as much as we could ourselves and enjoy it as a vacation, you know, second home property for us.
[00:31:14] Speaker A: So the, it's such a romantic concept and like I, I 100 bought a lake house during COVID My husband and I renovated ourselves and I was like, yes, we'll totally rent this out. And then it was four hours each direction and now we have a baby on the way. And we literally just, just sold it to friends of ours last weekend because I was like, this is not something that we're gonna be able to use nor is something gonna be able to.
[00:31:40] Speaker B: Pay me on the way. For sure. That's a lot for you.
[00:31:43] Speaker A: Yeah, that four hour drive was a kicker. But it was romantic. The concept and the, you know, the weekend spent working on it and getting to design it, like you said, as yourself, as the client is so fantastic. But romance aside, there's obviously huge capital investment in a project like that, no matter how big of a property you're getting. When you guys were ready to do the Leo cottage, what type of capital investment did it, did the first project really require? Did you guys take out loans to do it? Had you set aside cash and like you were ready to, to really just finance the thing entirely? Did you take on investors for that?
[00:32:24] Speaker B: Yeah, so it required a pretty significant investment. But we were, we were careful to figure it out and plan it out. My husband is very conservative and so he has to like make a plan for everything and I'm the risky gal. So we're kind of a good mix. But yeah, we had to balance the design studio's cash flow.
We of course, like, we're bringing extra funds in to make sure the Renovation can happen without disrupting the studio at the time because it is a part of our business. It's not just a side, you know, side rental. It was, it's truly. I mean, at first, when we bought the Leo cottage, we did not establish, like, Kate Marker Vacations as a thing, but we quickly did after. So it took a bit to figure that all out over the years, but it was a slow and, you know, steady process. But bringing in investors? Yeah, I mean, we did a little bit of both. We pulled funds, like I said, from the design studio, and then we did a small mortgage loan to make it happen. And yeah, I mean, we didn't. We didn't bite off more than we could chew, but it was a great, great process. And it's one of our places that I don't think we'll ever sell like the rest of them. They're a little open to, like, they're definitely investment property. But the Leo cottage, maybe just because it's our first and it's named after my grandfather, that's where the Leo comes from. And that's just really special to us.
[00:33:52] Speaker A: It's such a charming, beautiful property. When you bought it, what was the condition of the Leo cottage? Was it like a full gut job? Was it like semi reno? What kind of was the workload expected with the project? Besides, obviously, furnishings and finishes?
[00:34:08] Speaker B: Yes, it was a full gut. I mean, we had been looking for a while because we loved that community in that area. But when we first walked in, we just, we said to each other, we're like, it smells like it's our cottage. Which sounds like, really funny, but, like, I knew I would fully gut the entire inside. So it didn't really fully matter to me exactly, you know, fully what it looked like. And I. Because I knew I would touch every corner of it. So it was pretty extensive. I ended up having to bring my contracting team in from Chicagoland because I just, at that time, I did not have, you know, trusted trades there in that location. And so I think that really helped not to have to completely start over with a whole new set of trades.
[00:34:54] Speaker A: How long after taking ownership and like getting the keys to Leo Cottage before you were able to welcome your first guest?
[00:35:02] Speaker B: We opened right around fourth of July weekend, and the next weekend we had our first guest. It was busy.
[00:35:09] Speaker A: Oh, wow. The same year.
[00:35:10] Speaker B: Crazy fast.
[00:35:12] Speaker A: Oh, my gosh.
[00:35:13] Speaker B: I mean, it's not very big. It's only 1400 square feet and there was no addition, but that's still pretty.
[00:35:18] Speaker A: Fast, especially when you're bringing your Own team in from Chicago area.
[00:35:22] Speaker B: Well, that was kind of the beauty of it is like because they're not local, they would go and stay in a hotel. They would do like crazy 12 hour days, which they never do here on any project. You know, they start at 7 in the morning and they leave by 2 or 3 when they were there. Like, let's just get it done. So it really worked out for me.
[00:35:40] Speaker A: Oh wow. Yeah, that's a good hack.
[00:35:43] Speaker B: I know, right?
[00:35:44] Speaker A: You guys up at a hotel and we can get this done faster.
[00:35:47] Speaker B: Yeah, they wanted to get, get it done and get back, so.
[00:35:50] Speaker A: Okay, I have a couple vacation rental like specific technical questions.
What is like your average occupancy rate across the rentals? And I'm sure every property is different but like what is your goal occupancy rate to feel like you're really retaining a positive return?
[00:36:10] Speaker B: It really depends on the different locations. But we can't, we've been talking about Leo Cottage, so we can just use that as an example. So for Leo cottage we average 60 to 70% occupancy. But it also depends on the season. You know, it's not really warm there much except the summertime. But yeah, working with different property managers and different locations is definitely tricky to figure that out and like what occupancy really means and what's general to the area. But then also when you add my brand on top of it, it's pretty unique because a lot of the people that are staying in these vacation rentals are followers or clients or you know, relationships that we have. So I think our occupancy is a little higher than some other rentals in the areas that we're at. But you know, I'm just going to keep thinking it is whether it isn't or not.
[00:37:06] Speaker A: I've always had that mindset that like people are booking Leo Cottage because it's Kate's home, it's Kate's space that she designed. And your vacation rentals are a destination in themselves, regardless of what the destination actually is. So I am a firm believer, and I will back you up entirely that your occupancy rate is probably it out.
[00:37:29] Speaker B: Like a few years ago with our property in Florida and we, we had some code that you had to enter, you know, if it was a follower to try to track it. And it drove my property manager crazy. So I got it. So we got rid of that real quick. But we've, we've, we've tried to figure out that, you know, you always are trying to figure out Logistics and statistics and what's working and what's not working and do the research. It's part of business. So. Right.
[00:37:56] Speaker A: I'm interested in the property manager aspect of it. That's not someone that's like regularly employed by you. That's like a third party company that you hire to handle these. And did you know right off the bat that for instance, on your first property, the Leo cottage, that like, it was absolutely going to need a property manager? It's not something that you guys would be doing.
[00:38:17] Speaker B: Yes, well, because our brand is really on the line, you know, we're very different than someone just purchasing a home or second or third home or whatever it may be and then, you know, giving it off to a property manager and getting rental income out of it. Most of the time you don't know who the owner is of a space right when you go to rent it. And in my case, they know me typically and they've been following the brand and, you know, we're kind of publicly sort of everywhere within it. So that is something where we knew we had to give that service. I mean, it's the hospitality, you know, area of design. And we knew that they had to align with my brand. And so there was no question whether we would have a property manager, you know, take in the bookings and work on, you know, making sure it's styled the way it's supposed to be styled and doing all of the intricate details with the renters that are staying there.
[00:39:17] Speaker A: I'm curious, over the course of your journey with now three different locations, did you guys play around with like, where the property gets listed to rent? Is it always just directly through your website or is it on vrbo? Did you try Airbnb? Like, what made you, what did you settle on and what made you decide on that?
[00:39:37] Speaker B: Well, our property manager in each location, they manage that part of it, so they get it on. Also VRBO and Airbnb as well as their own website. And then I, as an extension of it, have put it on my website and I run the Instagram or social pages, but they manage the rest of it.
[00:39:57] Speaker A: That definitely brings me my next question, but I have one more that I wanted to squeeze in before we move on. What would you say in hindsight now that you've been doing this for, gosh, eight years, what intangible benefits do you feel like running these short term rentals have brought to you? Both from like a personal level and also a professional level?
[00:40:19] Speaker B: I would say for me, the joy of designing these spaces is huge.
There's also a great content creation aspect of it. Plus, it gives me, my family, a chance to actually use and enjoy these homes, which has been really special. We've created our own memories at each of them. And, you know, they're all named something that's like special to us and our family. And it's. That's. I mean, that's right. Memories are worth everything, right?
[00:40:52] Speaker A: Yeah, absolutely. So you were mentioning that as an extension of your brand, you have it on your website. And I've noticed that each of your websites for the three different businesses clearly highlight the other brand offerings.
How do you feel like the Kate Marker vacations business acts as a potential sales funnel to the design studio and Kate Marker Home. Like, I know you are a data girl and you have people looking at all of these stats. Do you have like, you know that you've definitely booked three clients, like design clients, because they happened to have stayed at the Leo cottage before or what kind of, what kind of return are you looking for between the three?
[00:41:33] Speaker B: Yeah, I wish I knew that if, you know, every client that potentially stayed there turned into a. Turned into a client. But, you know, the rentals are a perfect way for guests to experience our designs in real life. A lot of them end up wanting to bring that same aesthetic into their home. So typically when they stay in one of our vacation homes, they end up shopping at Kate Marker Home. So we actually even have a QR code to shop, shop the product and we link it back to our website and say, oh, the Salty Rose or the Leo Cottage or the Townie Cottages. And you can shop the product that you see when you're staying in one of our. One of our vacation rentals.
[00:42:13] Speaker A: Do you. Are you often or at all updating the furnishings or changing things out? Obviously, as things are, you know, get wear and tear, you would need to replace them. But are you changing them out like a catalog in the same sense? Or is it like once it's been designed and furnished, like, that's pretty much what that's gonna.
[00:42:31] Speaker B: We've had to change it out because, you know, vacation rentals just get destroyed. I mean, we've had to be very thoughtful about the pieces that we put in there. We want it to represent the brand and, you know, quality items. But, you know, of course, we're always having to change on a rug. I think that's the number one thing we're always changing. If it's not a vintage rug and it's a, you know, machine made rug, it's always getting changed out because people just, they want to just vacation and relax and not be like they're not taking the take care of the home like it's their own. Unfortunately, of course you have some people that stay there and it looks perfect when they leave. But generally you have to go in with that mindset that they're going to be lived in and used and a little bit abused.
[00:43:17] Speaker A: Yeah, absolutely. Especially on vacation, coming in off the pool or the lake. It's.
It's getting gross in there.
[00:43:26] Speaker B: Exactly.
[00:43:27] Speaker A: So I'd love to talk about these three different businesses as revenue streams. And if you had to create a pie chart out of the three business categories, what percentage of revenue do you feel roughly would make up each?
[00:43:43] Speaker B: I would say roughly speaking, the design studio makes up about 70% of our revenue. I know Kate Marker Interiors is, you know, is our, is sort of the mothership of it all or it is. And Kate Marker home probably about 20% and Kmarker vacations is right now only about 10%. But we're really working to expand more into the KMV brand. So I'm looking forward to that changing soon.
There's a lot changing in the retail world right now. So we're making some edits to really focus and shift more to the vacation homes because those end up selling some retail.
Just as you know, in the world. Like retail is just tricky. So. Yeah. And my husband is very. It's the only part of the business that he's really, you know, heavily involved in. Kate Marker Vacations. So now that he's finally becoming a big key role in it, I foresee it really growing.
[00:44:47] Speaker A: Amazing. That's so exciting. I can't wait to see more of them. And I cannot wait to come book the Leo cottage. My two of my sister in laws both live in Chicago and so we're actually talking. Yeah, we're actually, we spend a lot of time up there and our only, only niece is up there with another one on the way. And so I'm like, we've got to go next summer. I got to get on there because I'm sure it books up really far out.
[00:45:11] Speaker B: Or you might have to go to Lake Geneva to our cottage up there too. So hopefully it's done by summer.
[00:45:17] Speaker A: Absolutely. I will definitely be your guinea pig.
[00:45:19] Speaker B: Yeah, you can either go Michigan or go to Wisconsin.
[00:45:23] Speaker A: I'll be like, I don't need Sheetrock. It's fine. I can just sleep. Sleep with Stu. Dad's still exposed. It's no problem.
[00:45:29] Speaker B: Yeah, and your new baby too, so.
[00:45:31] Speaker A: And the new baby she won't know the difference.
So are there any other revenue streams that you've toyed with or considered it for your own business and either decided against or it's still kind of like lingering in the back of your mind as a designer?
[00:45:47] Speaker B: Yes. I mean, we've considered launching a furniture line, but we just haven't pursued it yet. It's something we're continuing to explore. We want to make sure that it aligns with our brand and, you know, current capacity. I always want to kind of remain small and more boutique.
[00:46:06] Speaker A: So would that be like your own. You are producing your own furniture line or potential collaborations with a furniture brand?
[00:46:13] Speaker B: Well, kind of both. We're exploring both right now. We. We have our own sort of a few items in Kate Margaret home right now that is made by another vendor. And, you know, they've done a more of a collaboration with us, but it's. It's very small. So we're really been talking about expanding it and making it more official.
[00:46:38] Speaker A: Before we sign off, Kate, I really would love to hear from you about your freshly released book, the Love of Home and Tears for Beauty, Balance, and Belonging. Congratulations. It's such a big deal, but I would just love to hear how it came to fruition and what you're most proud of about it.
[00:46:57] Speaker B: Thank you. I'm so excited about this book. It's like, I'm, like, deep in it right now with all this book tour stuff, so it's. It's.
[00:47:06] Speaker A: It's.
[00:47:07] Speaker B: It's like I feel like all I talk about lately, but the love, you know, it really reflects our design philosophy, blending beauty, balance, and the sense of belonging in every space. It's dialogue of our projects and our ideas and our personal stories that showcase how to create spaces that feel authentic and lived in it. It was a dream of mine as a designer for, you know, this business of almost 20 years, to have a book and have our favorite accessory to style in every home and now to actually have it out there and the world is. It feels great and it's exciting and a big step for us as a design firm.
[00:47:46] Speaker A: Are you already dreaming up book number two?
[00:47:49] Speaker B: That's a big question. A lot. I'm just so in it right now with this, with all of it that I haven't. I've had that. Asked to meet several times and of course, because there's, like, there's parts of the book that I would change, you know, just being a designer and a creative, nothing's perfect, right? So, yeah, of course I'm thinking about how, how it could be different for, for book two.
[00:48:13] Speaker A: So that's so exciting. Well, again, congratulations and you've been so great, Kate, with I feel like telling us secrets that are coming up for you. But before I let you go, Anything coming in 2025 you can share with us? We'd love to hear news first.
[00:48:29] Speaker B: Yeah, I mean I can't reveal too much yet, but we do have some exciting projects on the horizon and including the short term rental opportunities and expanded e commerce offering. So stay tuned.
[00:48:44] Speaker A: That so exciting. A big year ahead. It's been such a joy to watch your journey, especially over. I feel like the last six years in particular is just like you've just blown up. It's so amazing. Thank you for your time today. It's been an absolute pleasure and thank.
[00:49:01] Speaker B: You for having me.
[00:49:03] Speaker A: You can check this off. Your book tour stop.
[00:49:05] Speaker B: Yes, exactly. Thank you.
[00:49:08] Speaker A: Thank you so much, Kate.
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[email protected] the Interior Collective thank you so so much for tuning into this episode. Producing this show has truly been the honor of my career and I cannot believe I get to have these conversations. A big huge thank you to our production team at IDCO Studio in Quinn Made, as well as this season's presenting sponsor, Ann Saks. Your contribution literally makes this podcast feasible and the biggest thank you to you our listeners. Your sweet notes, DMs and reviews mean so much to us as we work to keep our show free and always accessible. Until next time, I'm Anastasia Casey and this is the Interior Collective, a podcast for the business of beautiful living.
