Why Boutique Means Business

Al Curtis Headshot
This project, in Saline, Mich., was the one that inspired me to venture into the boutique model of business. It was the first hybrid pool I ever built, and features a gunite sun ledge for lounge chairs.
This project, in Saline, Mich., was the one that inspired me to venture into the boutique model of business. It was the first hybrid pool I ever built, and features a gunite sun ledge for lounge chairs.

In business school, we often learn that the way to make more money is to grow. We take courses on how to scale, how to get bigger, how to manage that growth … all the while making the assumption that bigger means more profit at the end of the day.

But going bigger isn't the only way to make more money, especially in a business like ours. From my experience in this industry, I see two basic ways that companies can make more money: They can scale up, or they can add value with the boutique model.

Scaling Up and Opportunity Cost

In the pool business, we all know the stories of the companies that have chosen to scale up. Many of them have done a fantastic job of it. They find a type pool they can build for a big client base and focus on selling more and more of them. It can work, but it comes with a cost.

But when you scale up, everything multiplies. More work means more trucks, more crews, more office space and overhead. It means more personnel costs and layers of staff and management to handle everything, including more customer service.

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Of course, successful businesses have dealt with these challenges for years. Smart people in this industry build and grow companies by sitting behind desks and managing everyone from the sales people to the installation and building crews.

However, what a volume-based company can't do very well is innovate. Because such businesses rely on systems and procedures to produce that high volume, creativity and artistry is often limited to new color choices in tiles and liners or ready-made add-ons. Keeping the choices to a minimum also keeps the end costs in line, a highly important aspect of a volume-based business.

When building my business, Legendary Escapes, I knew this model wasn't for me. So I discovered another way to make more money that falls into line with what I believe in.

Adding Value through the Creative Process

Rather than scaling in size, we found we can scale in value, which is called the boutique model.

We didn't want to create dozens of cookie-cutter pools each year — we wanted to offer something really special no one else in our area was offering. So instead of getting bigger, we chose to get better at what we do. We don't do more work than we used to, but we do it whole a lot better.

The end result is that we produce a tiny supply (only a handful of pool projects in any given season) to the absolute best of our ability, and we pour our passion and our creativity into each one. This combination of limited supply and higher value creates a huge demand and justifies a premium price. It's the law of supply and demand in action, and it has allowed us to make more money without doing more "work."

The Boutique Effect

Consider the concept of the boutique experience. The trendiest — and priciest — big-city hotels offer a limited number of rooms, which have to be reserved months in advance. The swankiest restaurants offer small dining rooms and a minuscule chance of scoring a table on date night. These establishments can and do charge a premium — and their customers gladly pay it because they understand the value of what they are paying for.

All too often, a successful restaurant is convinced to open a second, third, fourth location, or even sell franchise locations. And almost invariably, the new locations just aren't as good as the original. Why? Because the original team that made it so terrific can't be in two, three or four places at once. The magic is somehow lost when it's spread out. Truly valuable work takes creativity and careful attention to each detail, something this is all too often lost when the work scales up.

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The franchise model works great for products and services that don't require ongoing creativity and innovation in execution and delivery. It does require rigorous training of staff (think Starbucks baristas) and an easy-to-replicate experience for each customer.

If that's the model you want to work with, that's great; many business empires have been made that way. But understand that you'll have a lot more competition at that level of business. In order to stand out, you may feel the need to compete on price, service, time and other factors that can eat away at your profits.

The Authenticity Mandate

The challenge in accepting a boutique pool model requires us to stay authentically true to ourselves and the work we do. We are often asked to take on projects that don't fit our ideal job, and it has taken a lot of determination to learn when to say no. If we were just saying yes to every job that came our way, it would distract us from our ideal client, our sweet spot, a fact that took me many years to truly understand.

That sweet spot for us means less, not more, projects. Our brand is getting bigger every year thanks to our marketing and some fantastic word of mouth. We often have people come to us and beg us to take on their project, asking if we please can just fit them in somewhere. This is certainly not because of any lack of pool building companies in our area!

We've found that as we limit the work we take on, each project has more meaning to us and more perceived value in the world. We have the potential for exponential growth not by doing more, but by choosing projects that match our boutique building model. And that my friends, is at the heart of my love of the business.

Comments or thoughts on this article? Please e-mail [email protected].

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