Closet & Storage Concepts / More Space Place Offers a Scalable Business Model that Appeals to a Wide Range of Entrepreneurs

With 30 years of experience in the home improvement and space-saving home furnishings business, Closet & Storage Concepts has become adept at providing custom designed solutions that meet the needs of their customers. Part of their continued success comes from always staying ahead of the curve and finding innovative ways to meet the changing industry demands.

This ability to adapt to an ever changing market and economy is part of the reason why they recently landed a spot on the Franchise Times  “Fast and Serious” list of the smartest growing brands. Not only has Closet & Storage Concepts adapted their customer-facing products and services over time, but they are also finding ways to offer franchisees a more scalable business model.

“The recession taught us some lessons about fixed costs. You can’t lay off a machine, so we began to explore other options on how to diversify our business model to come up with the best way to leverage revenue streams to better ensure franchisee success,” said Bob Lewis, President and CEO of Closet & Storage Concepts.

Their traditional model of combined showroom and manufacturing requires larger amounts of capital in machinery, overhead, employee and occupancy cost. This business model could be somewhat cost prohibitive for some potential franchisees.

“We began to look at options that were less capital intensive and would be a good fit for even the more risk-averse franchisee or for those who may be more interested in the sales aspect of the business rather than the manufacturing,” Lewis added.  

This opportunity for scalability came to fruition when in 2013 they acquired the “More Space Place” franchise system of stores that were showroom-only retail locations.

“We were now in markets we had never been before. We began to see a hub and spoke structure emerging throughout our system. Our locations with large manufacturing capacities were capable of supplying our showroom-only locations,” Lewis said. This symbiotic relationship proves beneficial to the entire system and allows for a very simple and flexible business model.

By having the ability to adapt their business model to the marketplace and skill set of the owner, they are able to create a lower barrier of entry for franchisees. The startup cost ranges from $73,000 for the more simple models to $429,600 for the larger manufacturing models. By offering three different business models, there is something to fit the investment price point, objectives and expertise of a larger swath of candidates.

The selection process takes into consideration the market and demographics of a potential site and matches them up with candidates that are the right fit in terms of initial investment, skill set and long term objectives. The Showroom-only business model is less complicated and more approachable for new franchisees. They have less start-up costs by outsourcing product manufacturing to other locations. This model appeals to a candidate who may be more interested in the sales aspect of the business. Showroom and single-site manufacturing locations provide a more centralized business model by handling the sales and manufacturing for their own location. For franchisees who want to undertake manufacturing on a larger scale, there is the option to produce for their showroom as well as other showroom-only locations.

By offering a scalable business model, Closet & Storage Concepts / More Space Place further demonstrates their ingenuity and uncanny ability to problem solve. They have successfully made their brand’s business model accessible to a wider range of candidates, creating exponential growth potential. This smart growth strategy is another reason that they will continue to lead their industry.

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