We’re finally in the home stretch: The end of 2020 is just a few days away. At points during the year, it felt like we were never going to make it. But here we are!
I’ve spent some time thinking about the lessons NSCA learned this past year—as well as lessons I know some of you have learned as well. I’m sharing my advice here to help you wrap up the year on a positive note and get ready for what lies ahead for us all.
No. 1: Budgets and Forecasting
We have a formula to follow (and, likely, so do you). Backlog is key, so start there. Begin by looking at the prior two years of backlog heading into the year. Know exactly which projects should be finished in 2021. From there, look at your sales funnel, retrofit projects, quick-turnaround projects, services, etc. (If you need help, just call us!) Our most important rules: Don’t use percentages to increase … use them only to decrease. And, if the project doesn’t have a name, it doesn’t go into the budget!
No. 2: Team Alignment with Key Vendors and Clients
Relevance is the desired outcome here. You simply need to provide what your best clients expect from their preferred technology solutions provider. This could mean remote managed services, onsite staffing, new or different solutions, etc. It could also mean you have to find people with new or different skillsets to ensure future success.
No. 3: Foundational Strength
Most NSCA members used the last nine months to build a stronger team—one even stronger than they had before the pandemic. Training, certification, process improvements, workflow, and various procedures and policies have been evaluated and updated. It’s time to document this information, set clear expectations for adherence, and grow from there.
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No. 4: Outsourced Labor Strategy
We often talk about fixed vs. variable costs. Ask your operations team to develop a plan for internal resource utilization so you can be proactive about using subs. Before you bring subs in, always ask yourself: Does it makes sense (and is it allowed) to use subs on these projects? Answers to this question will require visibility into the 2021 production schedule.
No. 5: PPP Tax Obligation
On almost a daily basis, you need to determine what you will need to do about tax liability and related offsetting of expenses to ensure that this remains a forgivable loan. You also need to know exactly what the feds are doing regarding tax obligation and when that will be due.
No. 6: Start Now and Talk About Agility
Make sure everyone in your company is prepared to pivot, be nimble, shift gears, and accept the fact that we’re still uncertain about what lies ahead. The pandemic brought out the best in so many people. Leaders have seen their best employees rise to the challenge of wearing many hats and pitching in to help—no matter what the task.
No. 7: Offer the Right Solutions
More than ever, we saw a dramatic shift in in-demand technologies and the factors driving technology investments. Adapt your go-to-market strategy to help solve your clients’ biggest problems.
No. 8: Read Like Crazy
When you’re reading, you’re learning. And the first thing you should read should bring you up to date on industry benchmarks and research. NSCA will soon release an updated Financial Analysis of the Industry report. Read it thoroughly and compare your business performance to the data it presents. Celebrate with your team about the areas in which you excel; set a few goals for 2021 to improve in the areas you fall short.
No. 9: Review Vendor Agreements
We say this every year, yet most can’t find the time to do it: Look for specific things like proper licensing, unused MDF dollars, rebates and purchasing criteria, warranties and IP protection, etc. Make sure you realign with items in the agreement that you may have forgotten; submit required reports or renewals.
No. 10: Scale to the New Reality
We started using the phrase “scale forward” to describe the concept of taking integrators from wherever they find themselves in terms of financial health, employee count, revenue, backlog, etc. and looking forward. “Scale forward” means to look at your existing talent, existing strategy, and existing go-to-market approaches—and decide what it will take to keep things moving.
No. 11: Set a Goal for Increased RMR
Over the past year, industry growth shows a 5% increase in recurring revenue. Can you do that (or better)? One certainty we learned during the pandemic: The companies that survived it best had recurring revenue to serve as a safety net. In some cases, it may have even saved the business.
No. 12: Codes and Compliance Audit
Make sure to spend a few hours looking over licenses, permits, and ordinances in your state. We are discovering more and more cities with regulations that differ from state licensing guidelines. This can have a major impact on 2021 projects.
No. 13: Cybersecurity and Getting Ready for the Cloud, PoE, and IoT
Ready or not, it’s coming! This is a good opportunity to be a frontrunner in your marketplace by showing leadership in innovation and technology trends that provide benefits to clients. While you’re at it, take work-from-home cybersecurity policies very seriously: Make sure you visit our Essentials Online Library and download the Remote Work Policy. You need strict guidelines regarding usage of work-issued equipment at home. For instance, a work-issued laptop should never be borrowed by another person. A work-issued computer used by an employee’s child for remote learning creates immeasurable cyber risk and could be grounds for dismissal.
No. 14: Position Yourself for New Ways to Consume Technology
As we learned during Pivot to Profit this year, integrators have to be ready to adapt to how a new generation of buyers and influencers wants to consume technology. Establish those relationships before the week you submit your proposals.
No. 15: Restructure Debt
Money is almost free now, so it’s a good time to look at your line of credit and make sure you’re receiving favorable rates.
No. 16: Inventory Turns and Obsolescence
Make sure you comply with any bank covenants first. Then do whatever is necessary to reduce inventory levels to our benchmarks (or below). Inventory is declining in value faster than ever before.
No. 17: Leadership/Executive Team Review
Step back and evaluate which roles have changed (or will change in 2021). For example: NSCA has done research on the CFO role and, quite often, we see things roll up under this job title that CFOs were never trained to manage: IT, cybersecurity, legal, risk management, contracts, IP protection, real estate, taxes, codes, compliance, permits, bonds, insurance, compensation plans, safety, prevailing wage, labor laws, etc. Is this happening within your organization?
No. 18: Consistency
Consistency has become a major deal in determining the outcome of a project and client experience. It’s easy to say and hard to accomplish, but you have to be great on every project large or small—whether you’re busy or not. Your culture of discipline is completely transparent to the client (often more than what you see or hear about). They know this and share it internally.
No. 19: Listen to Your Clients and Your Employees
As one former Business & Leadership Conference expert reminds me: Right now is the perfect time for leaders to shut up and listen. Most of us have spent the year over-communicating (as NSCA advised); perhaps now would be a good time to do more listening to hear what others are trying to tell you.
No. 20: Be Safe and Enjoy the Holidays
Next year is likely to remain rough for several months, but it will get better. Spend time (virtually, in person, etc.) with family and friends as best you can, given the circumstances. Enjoy this time and get ready for next year! –Chuck Wilson, NSCA Executive Director