By Ken Peterson, CKD – President and Founder of SEN Design Group
For growing businesses, the question of when to hire additional staff will undoubtedly come up. Business owners may also struggle with deciding what kind of professional they need to hire or what role to fill. Each business is different, but contracting business owners are facing one single choice: should they hire someone to help with the project implementation or with the sales tasks?
The simple answer can be found by looking at the difference between the traditional Showroom Business Model and what we, at SEN Design Group, call the Studio Business Model. The Studio Business Model has been responsible for helping business owners achieve an increase of 25-28 percent of revenues by leveraging their design skills, professional salesmanship, and experience to serve customers. The key factor is what is the business owner’s best personal skillset. Most often in a studio model, it is meeting with clients closing a sale.
Showroom Business Model Vs. Studio Business Model
Are you, as the business owner, filling the role of sales manager or general manager? If so, your business fits the traditional Showroom Business Model. If this has been successful and you plan on growing revenue, you might want to simply hire an additional salesperson as you grow the business. This extra person would be able to help you gain new sales contracts. You would continue to be heavily involved in sales management and other administrative parts of the business, such as personnel management, estimate review, creating the contract, etc.
Now let’s consider a different route: The Studio Business Model. Let’s look at a scenario where you are the lead salesperson and the only one driving revenue. As you grow, you find you need help, but you are the best in the world at meeting with clients and closing projects. The problem with you, the owner, selling is that none of the backroom work (such as planning, project management, pricing, ordering, POs, etc.) gets completed. Hiring a project assistant, a design engineer or a project manager and training them on your system will help you increase the amount of time you can spend with prospects. Increased time in front of prospects will increase sales and your revenue.
Given their professional skills, a design assistant can take on design, estimating, and administrative responsibilities off your plate. This would free you up to engage more leads and develop them into clients. Later, when more leads have been generated than the two project assistants can handle, the showroom can add a second design assistant. Then a third one or a project manager. In this format, design assistants are assigned to each client, and the owner can work as a team member to develop the design and produce the project.
Moving to a leaner format with you as the main point of contact with active clients and a project assistant may lead to more contracts signed. One upside of the Studio Business Model is that, by fronting every single lead yourself, you ensure that the conversion ratio into clients remains high and you can disqualify ones that are not a fit. In addition, business owners can achieve superior customer service through a clear division of labor and use of management systems.
Several factors, including increased homeowners’ disposable income and time at home, favorable mortgage rates and rising home prices, continue to benefit contractors across the country. The growth may be signaling that it is time to expand your team and a Studio Business Model can increase your sales while maintaining you at the center of your business.
SEN Design Group is the industry’s premier business education, DesignAlign™ selling system technology resource and buying group for independent kitchen and bath business owners, including showrooms, dealers, and design-build firms. As a 26-year-old professional organization, SEN has nearly 200 members nationwide and growing. It has more than 60 quality vendor partners. Learn more about becoming a member or vendor partner at SENDesignGroup.com.