Key benefits of being a large closets and home organization company
By By Tim Coleman, SCE Unlimited Chicago
January 14, 2022 | 9:34 am CST

Photo By Pexels

Last month we shared “how” to grow your small business. In the next two issues, we will look at “why” you may, and may not want to grow your business.

In my experience, anyone who has started a business, at some point, dreams or envisions what it would be like to evolve into a large business.  

You might think that having a larger business means you will make more money, which could be true, but losing money because of growth could also 
be true.  

Remember in the last issue we discussed “Making Your Plan for Growth.”  The reason you want a plan is because growing takes money, usually lots of it.

Having a large company also has the potential for more and different types of problems. For example, dealing with government regulation. Rules are often imposed upon larger companies due to size or number of employees. Another hurdle as you grow is being able to secure a line of credit at a bank. This could involve the need to put, not only the business up as collateral for the line of credit but possibly your own personal guarantee, which may include your house!  

On the other hand, many entrepreneurs feel confident that they are ready to grow their business. 

Let’s look at some of the benefits of owning a larger company versus a smaller company. Keep in mind that when we use the term “larger” we are referring to annual sales above $4 million.

There are many benefits that we could discuss, but I will address those that I have found personally and professionally beneficial: 

Make More Money

Lower material costs-approximately 2%

We all know that the more we buy from a vendor, the lower our costs. This includes everything from being able to hit the minimum freight charge, to better payment terms, to a lower cost due to volume. 

We can either choose to lower our selling price in the market, which makes it more difficult for our competitors who may pay more for their material or keep the pricing the same and make more profit on each job. 

Additional staff allows for tighter cost controls-approximately 4%

Being able to have people dedicated to understanding your costs of material, costs of labor, inventory levels and turns, cost of supplies and fuel, are the small incremental ways to save money without sacrificing anything. 

Assigning a staff member to research which credit card processor to use and advising you if a switch is beneficial, can save you money in fees. If you assume that 70% of your transactions involve credit card use, then even a 0.3% fee reduction could save you approximately $8,400 a year, which could translate into a new truck payment, more marketing, buying lunch once a week for your employees, etc. 

More staff allows for better marketing and analysis-1% 

Whether it is understanding which pages potential clients are looking at on your website, or having consistent branding across all forms, additional staff can ensure the quality of your business cards, trucks, website, all social media, brochures, showroom signage, shirts and uniforms, etc. 

Being able to tie all of this together and, consequently, learning to quantify the value of these items will generate more leads, and more leads will provide more sales.  

For example, being able to determine that the people who are viewing your website are looking at garage organization rather than the master closet, will allow you to shape your marketing to that product line. That information would also suggest that you should look for more suppliers for garage organization. You may even consider opening a new division to do epoxy floors.  All of this demonstrates the importance of having time and learning, which running a larger company allows. 

Overhead does not grow at the same rate that gross profits rise-5%

The example here is that if you have a $4 million company, and you have five design/salespeople each selling $800,000 a year, and you implement just a few new marketing ideas and you find that your Leads are increasing, then you would hire another design/salesperson and another installation technician and hopefully they would add another $800,000.  

Then, we can assume that their cost is 20% or $160,000, and your Material Cost is 35% or $280,000. This will leave you with a 45% gross profit or $360,000.  

Now for the question, did you have to move into a new building, buy new machines, hire more office staff? The answer is usually NO. You might have to buy another truck, or you might have to spend more on fuel etc.…but on the whole, much of that $360,000 falls through to the bottom line.

Total Sales from Above


Lower Material Costs

 $ 80,000


Tight Cost Controls



Marketing Analysis

 $ 40,000


Consistent Overhead





More money to take home

Look at the above as possible examples of where money can be saved. You can decide the following:
    •    Take home more money
    •    Keep money in the business for more growth

  Keep money in the business to avoid the credit line and become debt-free
    •    Or all of the above!

And remember this is just for one year! 

Next month we will discuss how having a larger company can allow you to expand and still provide outstanding service; enjoy more family and relaxation time; contribute more to your community; and in the long run, have something to sell.

Have something to say? Share your thoughts with us in the comments below.