Self preservation

From left to Right: Paul Bishop, Ellen Bishop, Steven Charlton and Fernando Arteaga.

The current economic climate is forcing interior design firms to become far more business savvy. In the second of a two-part series, Selina Denman sat down with members of the Index Steering Committee to find out more.

The current economic climate has changed the way most people do business – perhaps forever. This is particularly true in this part of the world which, up until very recently, was one of the last remaining bastions of the relaxed verbal agreement and open, trusting business relationship.

Times are changing. This is the age of unanswered phone calls, unsightly squabbling over contractual small print and hard bargaining over payment terms. The glory days of the ‘gentleman’s agreement’ have come to a close.

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As a result, interior design firms are having to closely scrutinise the way that they relate and interact with both their clients and suppliers. Essentially, they are having to become far more business savvy. Circumstances are dictating that they turn their focus very firmly towards self-protection and self-preservation.

Interior design firms across Dubai have spent the year patiently awaiting payment for services already rendered. In many cases, they are waiting for money from clients that are either unwilling or simply unable to pay their debts.

“We’re owed a lot of money because we started getting involved with a larger scale of project and a different kind of project – towers, hotels, that kind of thing,” noted Paul Bishop, owner, Bishop Design Associates.

“Obviously we have not received due payments because in many cases, the developer has fallen flat on their feet. Sometimes you are calling them up and they aren’t even answering the phone. And their accountants are nowhere to be found,” he continued.

This is an experience shared by design firms across the UAE. One problem is that design companies have never been particularly adept at protecting themselves – business practices pre-crisis never really demanded it.

“I actually think that the main reason that interior designers are suffering so much now is that we are not corporate enough in our documents. I honestly believe that,” insisted Ellen Bishop, owner, Bishop Design Associates.

“We are not corporate enough when it comes to protecting ourselves contractually. I think that’s an important point. Interior designers are not banks; we do not have the necessary processes in place to make sure that we are protecting ourselves like we should.”

In practical terms, this means becoming more stringent with things like transmittal sheets. “I think one of the main things is that designers did not use transmittal sheets,” Ellen Bishop suggested.

“So, when we were handing over drawings that were sometimes worth literally half a million dirhams, we just handed them over, with no proof. We have had clients who then came in and said: ‘We never received that. We don’t know what you mean’.”