What is a decentralized business?

"Decentralized business" is a phrase that my partner, Jodi Hersh, and I cooked up when were trying to explain to our clients how our company operates. People kept asking where our offices were located and we were always finding ourselves stumbling around with the explanation of how we work from home and connect our office using technology and strategy.

While we have employees and, in fact, have become a serious contender in our local and national market, we do not have a physical office location outside of our homes and none of our employees actual come to work.

Our company, Orange Star Design, has been in business for 15 years and we have seen our business increase substantially each year over the past years. So, we are an established business and actually have a history that very well surpasses the majority of our brick-and-mortar competitors. However, we have not always been so willing to admit that:

Originally, we began using the term "decentralized" as a crutch to sell work to companies that are stuck in the mind-set that a brick-and-mortar establishment is the only way to operate a product and efficient business. In doing so, we always have had a bit of an inferiority complex. We knew that we were not charging nearly the rates that the large firms were charging and have been able to leverage that as a selling point, but as we learned more about our business and refined our internal processes to accommodate more growth, we came to realize that our prices were beginning to creep in that direction.

This was a problem because we also knew that much of our past success was based on our clients price-point and budget as opposed to their perception of the quality they would be getting. In other words, we were what they could afford and they came to view us more as outsourced labor than they did as consultants.

So, about 18 months ago, we made the choice to transform ourselves from people who translated a clients vision into a print, web or illustrative product, to expert consultants who not only created a product, but also defined what that product would be.

In doing so, we have been able to leverage our process and experience to increase our revenues and have been able to sell our product at a higher rate. It has worked well and we are now working on larger projects with less defined scope where our talents as both consultants and producers is put to work. However, we then began to fall back into the old quandary of feeling that, for the prices we now charge, we needed to justify it with a physical location.

We began looking in the spring of 2008 and would spend at least one afternoon per week for a few months driving around the city of Decatur discussing and looking. As time went by, we were able to narrow this down to a few types of offices and space we would need for now and later.

We then made appointments to look at offices and actually found one or two that were not only perfect for our business, but were really good deals. That left us very excited and we were just on the cusp of pulling the trigger and decided to have one last really honest "devils advocate" style conversation.

We decided to explore the question: "Why do we need the office?"

For client meetings. We figured out that we have about 5 meetings per year where our clients actually want to come to us. So, it was not for that. We knew that one of our arguments for getting an office was so that we could justify the size and scope of our clients and projects. But, when we really looked at it, we realized that we already HAD the clients, so we could not justify this as a means of selling larger work.

To have a place to put our employees. Well, my employees are oversees. I have a staff of programmers in Phnom Penh, Cambodia who are awesome, but they won't be coming into work any time soon. (That is another blog post all together, but I promise to tell more.) Jodi has local staff, but part of the allure of Orange Star for employees is that we like to develop our employee/employer relationships based on an "Associate Model" (again...another post). So, what that means is that our employees actually prefer to work from home, cost us less because they are willing to trade the luxury and savings of working from home for a lower salary.

Finally, we said it was to get out of our homes and have a place where we can focus on work. That idea very quickly crashed and burned because we both LOVE being at home. We both have offices that are separated from the main part of our homes and, after all these years, have gotten into a really good work groove. Realistically, during our talks, we had always alluded to us taking "shifts" at the office so that we would not have to be there every day anyway, so the gist is that our hearts weren't in it to begin with.

So, in the end, we came to the following conclusions:

1. We needed to abandon the office idea. We chose instead to invest some of the money we would save on beefing up our internal systems so that we could support a decentralized office.

2. We would focus greater attention to our internal processes and strategies to support the idea of remote employees.

3. We would embrace the concept of a decentralized office and, in these times of high gas prices and the decaying nuclear family, use our experience to help other businesses develop with us.

So, moving forward, this blog will be devoted to sharing resources and tips for running decentralized business.