Are Independents the Way to Go for Your Firm?

You won’t be surprised to hear that I’m a fan of the independent contractor model. This model works well for many manufacturers, and even more so when times are tough. In difficult times, many kitchen and bath firms also turn to independents as a means to become more aggressive and competitive; some do so for cost reasons, as well.

There are lots of reasons why hiring or looking for work as an independent may be a smart option for you.

Sales are down, profits are hard to come by and expenses have been cut to the bone. Companies just cannot afford as many employees and we now have scores of industry professionals looking for work. We cannot expect this to change very quickly, even as small glimmers of hope for a better economy appear. In fact, many companies will continue to operate on the lean side even after we see economic improvement, because they will put off hiring until they develop confidence that they will be able to support and justify new employees.

In other industries, the emergence from a recession brings a boom in the temp job market while the hiring of full-time employees lags far behind. And with the severity of this downturn, we should expect it to be magnified.

Unlike other industries, we do not have temp agencies of kitchen and bath professionals. However, we do have a tremendous pool of “independent” professionals: designers, salespeople, installers and so on. These are people a dealer or distributor could partner with to contract their skills to help build success for both the company and the independent.

If you are a professional or a business owner, this may be the time to give the independent model a look.

Advantages of Independents
What makes an independent a great decision for a business?

First, there is motivation. On the sales side, independents only make money when a sale is earned, so they are exceptionally motivated to close sales. An independent’s need for success is immediate; they do not have the support and luxury of a guaranteed salary to act as a cushion. This keeps an independent hungry and motivated to produce sales for you, especially when times are difficult.

This is key to the service professional, too. An independent designer or installer must be responsive, diligent and dedicated to doing a good job, otherwise projects are not won, customers are not happy and jobs are not completed, keeping the independent from being paid or offered future opportunities.

Motivation is important, but the expense value of an independent for a business is a tremendous advantage, too. Companies don’t have to offer a guaranteed salary, health benefits, IRA and so on. You may be thinking, “Sure, but they get a percentage of each sale they make or a fee for their services.” That’s my point exactly. If they produce revenue, they get paid. If they complete a job, they get paid. If they don’t…they don’t. Wouldn’t it be great if you could apply this to every part of your company?

With independents, a company does not pay their time, their travel expenses, their payroll taxes, their Social Security, their sick time, family leave or vacations. They are not a fixed payroll expense that has to be met day in and day out, no matter the revenue. A business owner only pays an independent for success.

Expand your Reach
For businesses, there is another advantage often overlooked. Independents may bring business, too. They’re out in the field and run into opportunities a more insular employee may not. If your business relationship is good for them, they’re going to bring that business to you, and in a market like ours today, every job counts.

You may also use independents to expand your traditional territory. There’s a vast pool of designers and salespeople available today. You could look to add one local, and reach out to others the next community over and the community after that. Creating an environment that welcomes independents can expand the reach of your business, creating new opportunity for sales.

What makes being an independent a good business decision for the independent?

First of all is the opportunity to make a living in the field that you love. There are a lot of great kitchen and bath professionals out there looking for work. Smart businesses have taken the opportunity to adjust their work forces and secure the better talent for the future but with fewer positions available, some of the best talent in the industry is still out there. If this is you, becoming an independent may be your opportunity.

As an independent, I will tell you that the benefits are tremendous. You have self determination. You do work for more than one company and you set your own schedule. Most of the time you make the decision as to if you want to work with a client or not and you set your own rules. There is a tremendous amount of flexibility and control.

Independents also have more control in setting their compensation because the business that they are dealing with no longer has the overhead associated as it would with an employee. There may be room to negotiate a higher compensation.

Are there drawbacks to consider? Absolutely. A business does not have the control and oversight of an independent the way that it would an employee. That can be difficult for many business owners. For the independent, there is the lack of security concerning income and benefits plus the increased responsibility and expenses. And, quite frankly, not everyone is equipped to be an independent. But mix the right business with good independents and you get a formula for success.

This business model is not for everyone, and until this recent downturn hit, you may have never considered it. But in order to do more than just survive in this business, we all need to consider ideas and options that we may not have before. Adding independents to your business model or becoming an independent may not have been on your radar before, but today it may be an opportunity to expand your business and position yourself for great success when the economic environment improves.

I do see companies already beginning to do this, new competitors to the traditional kitchen and bath dealers and distributors looking to expand opportunities into new markets. They are utilizing independent professionals in the kitchen and bath industry and the opportunity is wide open to them. It may be an opportunity for traditional kitchen and bath companies and professionals, as well.

Printable version may be for personal use only. Content may not be duplicated, re-used or otherwise replicated without expressed, written consent from and/or Morgan Pinnacle LLC.

This article originally appeared in Kitchen and Bath Design News 9/2009

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