In the weeks leading up to the 25^th annual Business & Leadership Conference, we asked NSCA leadership to share their insights and expertise on many of the subjects we’ll cover at the event. Here, Laurie MacKeigan, president at Backman Vidcom, emphasizes why financial leadership is vital in 2023 and beyond.

Now more than ever, we need to remain focused on our financial leadership to make the right decisions to guide our companies through the next year.

Inflation, interest rates, possible recession, supply chain challenges, COVID-19, a talented worker shortage and numerous other factors (war, climate change, etc.) are taking their toll on the integration industry and our capacity to manage uncertainty.

On the bright side, demand is coming back, and adoption of our technologies is at an all-time high. In order to not just survive but prosper over the next 12-24 months, we need to keep a very close eye on our finances. As the old adage goes: Revenues are for vanity and profits are for sanity. However, cash is queen! You can’t have revenue or profits without strong cash flow.

When I first got into the integration business in 2014, my cash flow situation took up about all my thoughts – day and night! We took many steps to right the ship back then, which involved moving into a smaller space, right-sizing the team, cutting expenses, and increasing the focus on sales and marketing efforts. Slowly but surely, those efforts paid off, and we were able to fix a lot of the cash flow and profitability issues.

For the few years before COVID-19 hit in 2020, times were great. But the past couple of years have been more challenging and could get even more difficult over the next couple.

Our success in navigating the past few years has been in long-term contracts with some key clients. They provide stable recurring revenue, which is a nice base on which to build other contracts. We have very slowly been building managed services contracts and licensing contracts.

We have purposely kept our team very lean and watched employee utilization very carefully. We closely look at every closed project and compare it to the budget to learn what went well and what didn’t.

Even when times are challenging, it is important to remain focused on what brings you success. The 80/20 rule is a real thing. We tend to the 20% of clients who bring us 80% of our revenue. We try to stay away from the clients and potential clients who demand a lot of time and attention for not a lot of payoff.

Even in this environment, some business is not worth it.

6 Steps to Improve Your Finances

1. Keep talking to your banker even if things are tough. They know your track record and generally want to talk.
2. Watch employee utilization and budget over/under. Make sure actual time on projects translates into future quotes.
3. Look at every expense line and see if there are savings to be gained. I recently switched mobile phone providers and now have free cell service for a year!
4. Ask clients to take delivery of equipment and pay for it now.
5. Set minimum project sizes and minimum margins you are willing to accept and stick to them.
6. Get outside and get some fresh air! Strong mental health is important for leaders.

Laurie MacKeigan is president of Backman Vidcom and an NSCA Board of Directors Member. Chat with her at NSCA’s 25th annual Business & Leadership Conference in Irving, TX, on Feb. 28-March 2.

Register at www.nsca.org/blc.