BC Business
Service businesses are typically feast or famine, and that’s especially true among the more creative services. But that hasn’t stopped thousands of dreamy entrepreneurs from leaping into their own businesses based on a particular skill or expertise.
Unfortunately, many of these businesses are condemned to remain tiny and immature, unable to grow because, while subject knowledge may be a strong underpinning for starting a business, it’s not very useful when it comes to running it.
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One company that conquered this service-business growth problem is Vancouver’s Kasian Architecture Interior Design and Planning Ltd. The company has been growing at an annual rate of close to 30 per cent because it broke out of the typical partnership mould to draft an aggressive business plan – and then executed it.
Edmonton architect Don Kasian started Kasian in the 1980s after doing various stints with other architecture companies and observing how they managed themselves. He quickly grew his sole proprietorship to a business with 30 staff. That’s where he stalled.
Kasian had noticed that most professional services and other consulting businesses were limited in their ability to expand. Usually based on the law-firm model, they’re often independent operations or partnerships where the skilled founder – or all the partners – is the boss, whether he or she has business acumen or not.
This usually means that there are very few real business processes in place. Marketing, operations and planning for growth usually depend on individual interests or the rainmaking ability or sheer energy of one or a few partners. It also means that the companies usually only concentrate on their own backyards, continually fighting for a piece of a finite pie. In short, the model is fine if your ambition is limited.
But Kasian had big plans, and in 1990, when he merged with another company and formed a more corporate model, he ensured that proper business processes were in place for growth. For example, Kasian breaks from the typical partnership model: partners are principals who act as a kind of advisory board, but the company is run by a CEO with a mandate to look for new business opportunities and to captain a tight financial ship.
And the company has always set aside a portion of its revenue as working capital for growth. Much of this thinking came from Kasian’s personal view that if a business isn’t growing, it’s dying, because in the modern world global competition will soon swamp regionally focused and complacent service companies. He calls it the “one-foot wave” syndrome: a wave that’s only a foot high in the ocean can turn into a devastating tsunami by the time it hits land.
Kasian Architecture has been expanding, both geographically and in its ability to provide services. From Edmonton, it moved to Vancouver and then later infilled in Calgary. Two years ago, it went national by opening a couple of offices in Ontario. The company brain trust quickly realized Canada was too small, but didn’t want to fight it out in the U.S., so it looked globally. In the past year, it opened offices in Dubai, Shanghai and Mumbai, largely because it had people on staff who are familiar with the areas.
How that expansion took place was another typical Kasian expansion method. Rather than simply being a consolidator, the company usually forms an alliance with a smaller or independent operation that has a specific expertise but is missing the business processes required to land larger jobs. Kasian supplies those processes, and that alliance usually leads to an outright sale and a new partner.
A bonus of the Kasian business model is that with each partnership new expertise is brought into the firm, which creates new business opportunities that lead to further expansion.
So the service firm that started as a small, independent operation – a one-foot wave, if you will – is building its own global creative-service tsunami.
• Stay flexible. If you’re on the growth path, you need to be an opportunity hunter that can move fast. So don’t load yourself down with debt or play the property-ownership game.• Collaborate. Collaboration increases your capacity; competition often destroys it. Learn how to work with other companies to grow the pie.• Gain depth. If you’re not learning, you’re shrinking. Embrace change; it brings new ways of thinking and doing.