Brooke felt like she had done well to grow her interior design business, Brooke's Designs, to over $1,000,000 in annual revenue with only twelve employees.
But it had been two years and she was continually fearful that she would lose the ground she had gained over the last decade. She remembered when it was just her. She was an interior designer with some great ideas and got some traction with a few customers to start.
Her customers loved her designs and she continued to gain popularity. It wasn't long until she had to hire an administrative assistant and then a few helpers. Customers loved her designs and her ability to completely refurnish and decorate a house within a single month. She now had four other designers; four staff who moved furniture and hung pictures; a few administrators and herself.
She felt like she was at an impasse. If she hired more people, she didn't feel like she had enough work for them to do. If she didn't hire more people, she felt like she couldn't take on more work. What was wrong? While she was proud of her million dollar business, she didn't seem to make much more profit than when she was on her own. She remembered meeting a business coach at a recent networking event. He called himself, Coach Russ. Maybe he could tell her how to make her interior design practice more profitable.
Brooke met Russ at his favorite coffee shop. They got their coffee orders and got to know each other a little better.
Brooke decided to talk to Russ about her dilemma, "I just don't know what I'm doing wrong. I've successfully grown my interior design practice, but feel like I'm not really doing much better financially than I did when I was on my own."
Russ asked, "What kind of profit are you making with your current practice?"
"I'm making about $100,000 in profit with $1,000,000 in revenue."
"That's pretty respectable. What did you hope to make?"
"I guess, I thought I could do a lot better. I mean, I am doing okay; but I was making $200,000 per year when it was just me."
"How much do you work in your interior design practice today?"
"I do a lot of the high-visibility designs and I help with the hiring and firing of employees."
"Interesting. Do you want to continue to do the designs yourself? Or do you want to grow a business?"
Brooke looked confused, "I don't understand. Why must I choose one or the other?"
Russ responded, "You don't have to do anything. However, it's been my experience that a business owner either wants to grow a business; or they want to practice their profession while they surround themselves with helpers. If they want to practice their profession, they will naturally be limited in how much they can grow. Does that make sense?"
"I suppose. Are you saying that I will never be able to do any better than I'm doing right now?"
"I suppose that by BETTER, I mean, I will grow to $2 million in revenue and be able to sell my company and be able to retire."
"Got it. Then, my answer to you is, NO. You will not be able to do any BETTER than you are doing right now."
Brooke was shocked. Here I thought that Russ was some kind of business guru. Why couldn't he tell me how to grow my business? And, why was he so negative? I would probably pay him big bucks, if he could tell me how to grow my business. What was his problem?
After a pause, Brooke asked, "Aren't you a wise business coach? Why can't you help me?"
Russ responded, "I can help you grow your business. I cannot help you grow a business where you insist on being its key performer."
"I don't understand. Are you saying that I would need to give up doing interior design in order to grow my business?"
"Not exactly. I'll tell you what. Give me your most recent financial statements and complete the questionnaire that I give all of my first-time business owner clients; and I will schedule an initial coaching session with you, and we can dig into your situation in more detail."
Brooke felt like Russ may just be trying to get her to agree to a session without any promise of being able to help her in any way. What was there to lose? It was a low price to figure out if she could move forward or not. Brooke agreed to Russ's terms and they scheduled a coaching session for the following week.
Brooke and Russ met in Russ's office. There, Russ had taken a lot of the information that Brooke had given him and he had created several sketches on his white board. They both sat at a small round table that was directly in front of Russ's desk.
After the typical small talk, Russ started, "I want to know the answer to a question. Do you want to be an interior designer; or do you want to lead an interior designing business?"
Brooke thought this was as ridiculous as the conversation they had in the coffee shop, "I want to do both."
"You can't do both. You can do one or the other. Which will it be?"
"I don't agree. I've grown my interior design business to $1 Million per year... and I am still doing my own designs."
Russ could see that Brooke would need some convincing. He pointed to one of his sketches on the white board. It was a sketch of an organization chart of Brooke's employees. Russ pointed to a group of boxes that was supposed to be the designers that Brooke hired, "What do these people do?"
Brooke smiled, "They are my interior designers. They do designs for our customers."
Russ smiled, as he pointed to Brooke's position as manager, "What does this person do?"
"I manage my team and I also perform interior designs for high-visibility clients."
"No you don't."
Now, Brooke was a little indignant, "Pardon me! I think I know what I do."
"Brooke, as long as there have been small business owners, there has been small business owner role confusion. I want to describe your company; and I want you to correct wherever I go wrong. Deal?"
"You work with your other interior designers. When you have a high-visibility client, you do the work. When you have an average client, you give that client to your other designers and they do the work. Right so far?"
"Your company is operating like an ad-hoc interior designer pool that operates under your brand name. Your other designers do their own thing, but are too afraid to go out on their own; because you help them get clients. However, all of your clients would get no different service from your company, if they decided to hire one of your designers without you. Is that right?"
Brooke seemed a little upset at this point. Russ seemed to be saying that any of her designers could work on their own and probably be better off than working for her. She barked, "Look, Russ. I wanted some helpful advice from you... not insults!"
"Look, Brooke. I think you've done a great job with your interior design practice. Very few interior designers have created the kind of success you have. However, I feel like it's necessary for us to start off with a truthful foundation. I can't help you if we don't start from the right place. I believe that your interior design practice operates as a group of independent interior designers and helpers and administrators; but is not what I would call a genuine business."
Brooke had calmed down, "Okay. What would make my interior design business, a REAL business?"
"I'm glad you asked. You have a knack for interior design. You've said as much. You even say that you are the one that will take on your high-visibility clients. You give your other clients to your pool of designers. In order for you to become a business, you need to figure out what makes your design talent so special; and package it."
"What? How can I package my talent?"
"Let me ask you a different question. If you were to sell your practice some day; which is what you say that you want to do; will you still work in the company after it's sold?"
Brooke started to see what Russ was saying. f she was so special that she needed to handle all of the high-visibility clients, and she wanted to leave the company, then her company would not be able to serve the high-visibility clients; and it wouldn't be worth as much to a buyer.
Brooke responded, "I guess I see what you mean. How can I convert my current practice into an interior designer BUSINESS?"
Russ smiled, "You just took your first step. Realizing why you don't have a business now, will help you create a REAL business. Next, you need to stop doing interior design for high-visibility clients."
"What? I love interior design. Why should I stop?"
"Do you think that Michael Dell or Bill Gates like programming computers?"
"Just because you have decided to take what you love to the next level doesn't mean that you don't love it. In fact, it means exactly the opposite. It means that you will share your amazing talent it to a much broader audience."
"I think I get it. If I train my designers my way of doing interior design; it will be like I will be multiplying my signature way of designing."
"You got it."
"So, what will I need to do in order to make this transition complete? Do I just start training my designers?"
"If only it were so easy. Training is certainly a start. However, you need to go deeper than that. You work with creative people who value their artistic creativity. You need to collaborate with your team; and develop a collective culture... a way of doing things that you can repeat and extend beyond your current employees."
Brooke worked with Coach Russ weekly for several months. She learned that it was a lot harder to off-load her high-visibility clients to designers who she thought were rookies. Russ helped Brooke change the way she saw her staff. She started taking their input and together they created a genuine, repeatable design process that was called the Brooke Designs Way.
Brooke had another hurdle to overcome. While she had offloaded much of her design work, she felt like she didn't have much to do in her company. In fact, she felt as if she wasn't really needed at all. She met with Russ for one of their coaching sessions to share her new dilemma.
Russ asked, "What would you like to work on today, Brooke?"
Brooke responded, "While I feel like my design team is quite a bit more competent, we have still not grown beyond the $1 Million revenue ceiling that I was experiencing six months ago when we first started working together."
"I see. Tell me what you think is causing your stagnation?"
"Russ, I thought that you could tell me."
"I can. But, just like I've taught you how to get your designers to think creatively, I want you to come up with some possibilities."
"I just don't feel like I'm productive. I feel like if I was 'doing something' as a designer, we would be further along than we are now."
"Let me ask you. What's the job of a business owner?"
"I suppose that I tell my designers and other employees what to do."
Russ frowned, "You know better than that. What have we been talking about this past six months?"
"Ok. I don't tell my employees what to do; I inspire them and they figure out what they need to do on their own. But, if they are on their own; what am I supposed to do?"
Russ could see that he may need to offer some help, "What is preventing you from hiring an additional designer or helper in your business?"
"I can't afford to pay an additional designer?"
"Because I don't have enough interior design work for them to do?"
"Why don't you have enough work for them to do?"
"Because I don't have enough interior design customers."
"How will you get more interior design customers?"
"I suppose I will have to market and sell... right?"
"Wrong. You need to hire a marketing and sales person to do it for you. Haven't you learned anything from our past six months?"
Brooke smiled, "I got it. I need to stop DOING and start LEADING."
"You got it. So, what are you going to do?"
"I suppose I will hire a sales person."
"Good for you."
Brooke was gradually turning into a genuine business owner.
After she hired a sales person, she realized that sales would increase and so she hired a manager to run her business. They created a system on hiring and growing as they increased their interior design backlog. Not only were Brooke's designers on auto-pilot; so was her manager, her sales woman and everyone else.
While her interior design business had reached $2 Million per year in revenue, Brooke decided to open up another design studio in another city. She had created a sure-fire business that didn't require a second of her time. The only thing she had to do is duplicate her business model in a different location.
Two years after she started working with Coach Russ, Brooke was approached by the largest builder in the United States. This builder wanted to offer interior design services with every home they built. It was a high-end custom home builder and they were convinced that Brooke's Designs was exactly what their firm needed to dominate the high-end customer home building market.
Brooke now had an odd decision to make. Does she take the $5 Million buy-out offer; or does she continue duplicating her business model in major cities earning a seemingly automatic $200,000 profit per year per location?
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As a business coach and 30-year business veteran, I help my business owner clients change their mindset in a way that allows them the freedom and profitability they’ve always hoped for, but never thought possible. If you’d like to develop a successful business mindset, I offer online training along with individual and group coaching sessions.