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A Case For Keeping It Small

When it comes to a custom installation business, bigger is not always better.

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“How are you going to expand and scale your business?”  That is a question Mark gets frequently from many of his business school classmates when they are discussing work. The assumption is always that bigger is better. We see it with the dealer rankings that come out — they are based almost exclusively on sales volume. We see it in how our vendors treat us — the more you buy, the better you are treated, the more access you get, and the bigger your discounts are. We are here to tell you that bigger is not always necessarily better. Having a small, nimble, profitable, and manageable company is a very exciting and fulfilling business model.

Todd has been in business for almost 20 years. He started with a larger staff, doing everything from the AV work to carpentry, custom furniture, millwork, theater design, and more.  About 12 or 13 years ago, he streamlined the business to AV and networking and has since added smart home technology as part of being a Crestron dealer. With a more “traditional” integrator focus, he has been able to steadily grow sales and profits, while keeping complexity and headcount low. The business is really just four people — Todd (programming, network configuration, sales, etc.), an office manager (scheduling, purchasing, proposal generation, etc.), and a two-person install team. Everything else is outsourced — legal, accounting, graphic design, web design, and so on. He focuses on the core of the business and lets experts in everything else handle their domains.

Mark’s business is similar in size.  It is just him and two installers/techs. Mark does most of the finance and marketing strategy (since that is his educational and corporate background). He handles all the technical aspects of the business (programming and networking) and does all the scheduling, sales, and proposals. He does outsource some bookkeeping, all website development and management, and graphic design.

So, what are the benefits of keeping it small?

Financial Flexibility

When the NYC market took a major hit last spring because all buildings closed up tight and would not let any contractors in, Mark was able to remain profitable without laying anyone off because it just took a couple of mid-size jobs in non-doorman buildings and the revenue from recurring support plans to be able to make enough profit to keep the lights on and maintain his team. While he was not rolling in profits, he did not lose anything either. Larger companies either laid off employees or went into the red (although PPP loans likely helped, which both Mark and Todd did receive, as our revenues and profits were down dramatically in Q2 2020).

High-Touch Customer Service

Clients are impressed and feel they are important to the company when one of us shows up for an install or a service call. With such small companies, we are involved intimately in every project and know all our clients by sight. We can picture every project in our heads when a call comes in, making the client feel listened to and supported. Being able to talk a client through a solution to an issue or to even mention where something is located, when a job was done years ago, instills a sense of comfort. Every client gets our full attention. We do not book multiple projects at the same time, so we can always be onsite if necessary to kick off and/or wrap up a project and be sure things are done to our specifications. We can also be the ones doing the final walkthrough with the client to ensure they are comfortable with everything and know how to use their system inside and out.

Also by Todd & Mark: Running a Better Business in Times of Inventory Uncertainty

Personalized Sales and Support

Clients often ask during the sales process, “Who will be here when it comes time to install everything?” or “Who do I call when I have an issue?” They are very relieved to hear that we will be onsite for the installation and they will have our direct lines to call us during business hours for support. We have both closed many sales because a client feels very reassured that we are not just the salesperson, but are the business owner and will be with them throughout the process. It also means that long-term support is likely to be more consistent, since it will not be a different tech showing up for every service call.

Quality Of Life

With a smaller client base and just a few employees, we are each able to run our businesses during regular business hours and spend quality time with our families. Todd regularly spends time with his kids, driving them to and from activities, and he is incredibly involved with his church. Mark’s son was the starting goalkeeper on his high school soccer team in the fall of 2019 and Mark made it to every game (they were all weekday afternoons) to see him play and cheer him on. During Covid, he has signed off every night by 6:00 PM to go for a walk around Central Park with his wife and then come home and cook dinner for his family. Mark is making more money than he ever did in corporate life, and is much happier and a better spouse and parent.

Yes, we often do spend time on evenings and weekends responding to clients, architects, and designers, but with our partnerships with Parasol to provide 24/7/365 support, the client demand after hours has diminished dramatically, making our quality of life even better. But we love what we do (as do most of the dealers we know), so sometimes we bring it on ourselves, because it does not always feel like work.

The next time someone asks how you are going to grow, expand or scale your business, be comfortable telling them that you are just fine where you are.

Also by Todd & Mark: Is the Small Fill-In Project Dying?