Interior design firm's boss learns business lessons the hard way

As a rookie boss, Terence Neo made all kinds of beginner's mistakes and nearly went bust.

IF anyone has experienced the struggles of starting up, it is Mr Terence Neo. The 33-year-old is the design director of eightytwo, a local interior design boutique. While he now has a sizeable portfolio under his belt, his journey to this point has been far from smooth.

After working in various architectural and contractor companies, Mr Neo took to a colleague's idea to start a practice together.

A newcomer in a viciously competitive industry, the company laboured to differentiate itself from other interior design firms. But from prior job experience, Mr Neo saw a gap in the market he sought to bridge.

He said: "Most homeowners either went to places which gave them half- past-six work for a low price or they went to overly expensive places. I wanted to balance that out so my clients could enjoy the best of both worlds."

That meant quality, customised service at a reasonable price.

"Every project is individualised painstakingly with careful attention to detail. It is unlike the 'rubber stamp' business model where projects are cloned, which gives them a much faster turnaround time."

However, the partners struggled to find clients who would give their newly formed company a chance.

Mr Neo recounted: "Back then, clients would walk in and request to see our portfolio... And I would respond: 'Would you be my first portfolio...?' Nobody was willing to give us that first project."

Having spent too much money on renovating the new office from the get-go, the company struggled to stay afloat. Things took a turn for the worse when the company's second shareholder made an exit six months into the venture.

"That was the toughest period. It was hard for me to accept his departure because he was part of the reason we started in the first place. He just walked out when he realised that it was not going to be easy."

The company continued in financial hardship for the next two years. With clients turning them away and employees leaving, they were "bleeding money every day", he said.

On hindsight, Mr Neo admitted it was a predicament that could have been avoided.

"New business startups tend to get overly excited about their concept and about being bosses. I went into a ditch because I wasn't mindful about my finances. Looking back, I could have tuned it down by two or three notches and started a lot smaller."

Gesturing to his rustic two-storey office unit, he said: "We had this office six years ago when we first started, and we are still in the same office, with 18 employees, triple the original number."

He also had to eat humble pie. In the past, he used to turn down clients with a smaller budget, such as newlyweds who wanted work done for their flats or do minor renovations for their rented apartments.

Mr Neo said: "I used to think that I was curating (my portfolio) and had wanted to market ourselves as a boutique agency. But because of how small we are, we need to take on such projects to keep overheads low."

Plagued with financial woes, the company reached a tipping point when bankruptcy loomed.

"My accountants told me that I had to pitch in another S$50,000 or wind up the business for good," he said.

For a man who had just gotten married and had the weight of his young family resting on his shoulders, it was a difficult decision to make.

"I did not know whether to contribute another S$50,000 to a company on the edge of bankruptcy or save it for my daughter's education."

His wife firmly believed the company needed more time for people to believe in their work and encouraged him to take the plunge. She offered to pitch in S$20,000 to keep the company going.

With her support, he took a leap of faith and was more determined than ever to make it work.

With a renewed perspective, he opened the company to a broader range of clients and was more mindful of his finances. Slowly but surely, business began to pick up.

On eightytwo's concept for design, Mr Neo said: "We build homes, not houses."

He explained: "Homes are where people live in, so we have to care about the day-to-day aspects. It's very easy to get carried away in creative design, but we don't want to push boundaries just because we like something.

"It's so much tougher to be considerate and think of something that will be timeless in the next five to 10 years."

So, eightytwo has adopted a muted, airy and minimalistic design strategy as its main attraction.

He also cautioned home owners against designing their houses like cafes. "Trends come and go, but houses have to stay timeless. We've been trying to educate our clients to keep things sustainable as functionality is so much more important."

On the commercial front, one of the company's most prominent projects is the design of Starker Bistro at Katong Square. The 200-seat restaurant has a provincial rustic interior adorned with real trees and hanging flowers. There is also an al fresco dining area.

The satisfaction of running his own interior design practice extends beyond being his own boss. Mr Neo also plays the role of a mentor to his employees, through harnessing their creative ideas into feasible designs.

Mr Neo said: "When people leave the company, it's almost never a relationship gone sour. These people have grown to start their own companies and that, to me, is an accomplishment as an employer."

Unlike most firms in the interior design industry where it is not uncommon for employees to work past 10pm and on weekends, his team works five days a week and he "chases" people home at 7pm.

Mr Neo said: "While we want the business, we are not going to be desperate. Seven o' clock is the cut-off and it doesn't matter if someone is going to present a S$100k cheque or has a 50k square feet house to design."

He added: "We do compromise, but our clients have to respect us too. If not, how are we going to work together in the coming months? We don't sell short, but we also don't sell too hard."