What’s an Accordion Business?

Let the ebb and flow of available projects and a network of subcontractors dictate your business structure.
What’s an Accordion Business?
If you have a group of subcontractors you rely on and treat fairly, they will always return the favor when you need help.

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Everyone is a potential client. That means it’s vital to build solid relationships with everyone from salespeople to homeowners to real estate agents. Building a network of relationships is the best source of potential projects. If you or your business is referred to someone, the person intuitively feels more comfortable with you because you were recommended. One relationship can lead to 20 other people. 

When asked about solidifying relationships with other industry professionals, my response is always the same: Trust is earned. Do what you say you’re going to do. People don’t expect perfection, however they do expect communication and commitment. Once you prove you can be trusted and deliver the project as expected, a mutual relationship develops that leads business to each other. 

So, how do a network of relationships and an accordion business structure work together? An accordion business structure lets you expand and contract with your pipeline of projects and your network of clients and industry connections on an as-needed basis. If you have six months of steady work, you expand your workforce to meet the need. As the pipeline shrinks, you adjust down your workforce.

Matching workforce and overhead to your projects benefits your bottom line. When the workload is down, you are not trying to find work just to keep the guys busy. This business model gives you more control. 

The downside to this structure is you must be able to handle all aspects of the business. You have to be president, secretary, banker and laborer, which can be taxing. Also, finding seasonal workers can sometimes be a challenge. This structure will not last forever — eventually you will grow out of it as the business matures. 

An accordion business model also requires trusted subcontractors and only works if you can diligently manage your company. You must be very proactive. It is a very doable structure for startups and relatively young companies. 

At some point, we all need help. Lend a hand to subcontractors: It will pay huge dividends in the long run, and help your business mature and succeed. If you have a group of subcontractors you rely on and treat fairly, they will always return the favor when you need help. 

You’ve heard the saying: People do business with people. Your regular subcontractors might not be the cheapest, but if they can rely on you for additional business, then rest assured that you can rely on them down the road. Using quality people is always cheaper in the long term. 

Of course, an accordion business structure is not ideal for all companies, but this easy-to-follow model should remind you that a network of reliable industry relationships is the key to building a successful operation. 

About the Author

Glenn Marcum owns EcoStruct Group LLC, a construction, project management and consulting business the delivers eco-conscious construction and environmental services. Contact him at gmarcum@ecostructgroup.com or visit www.ecostructgroup.com

Read more about the accordion business model and EcoStruct at www.onsiteinstaller.com/editorial/2013/11/building_for_the_future.



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