These four important principles will help you grow your integration business success.
In 2014, my husband and I bought Backman Vidcom, a 40-year-old audiovisual integrator in Halifax, Nova Scotia. We had zero experience in the industry, but we felt we had the skills to run an integration business.
I’m a CPA and my husband, Tom Murray, has an extensive sales background. We quickly realized that the company was struggling and had a poor reputation in the region. Not only did we have to quickly learn the industry, but we also had to ensure that the company survived.
Early on, we brought on our third partner: a VP of technology. As a result, we now have three owners who are highly skilled within one of the three legs of our business stool: finance, sales, technology. We rebranded and went into the community to ask our customers for another chance.
It took a few years, but we more than doubled the revenues, employees, and profits for our integration business.
Here are the factors that I believe led to our success—and could help other relatively small integration companies like ours …
1. Watch the (Important) Numbers Like a Hawk
- Always know your cash situation. You need a good line of credit and a great relationship with your banker. My banker goes to bat for me when we need more cash for a big project.
- Stay on top of receivables. Sometimes the squeaky wheel gets paid sooner.
- Look at your open projects. Focus on getting the last 5% or 10% finished as soon as possible to get projects invoiced. Technical staff are often excited about new projects and not as concerned about the ones dragging on. Get those buttoned up.
- Know which customers make you money. We stopped quoting customers that never bought from us but needed that third quot. We focus on the 20% that give us 80% of our revenues and profits.
- Focus on profits. Early on, someone told me that “revenues are for vanity and profits are for sanity.” We focus on the profitable customers and let others fight over low-margin work.
2. Treat Your People Well
We spend a lot of time and money training our people. We reward people for getting their CTS. Skills can always be improved. Sales and leadership training are also important.
Meanwhile, finding skilled AV professionals is difficult. When you find them, you need to keep them. We do our best to keep them engaged, pay them well, respect their evenings and weekends, and give them interesting work.
We constantly ask for feedback on what we can do to be better.
3. Strive for Continuous Improvement
We look at every project we close and examine the time it took compared to the time we budgeted. It helps us better estimate in the future, and we learn where issues arose and improvements in process are needed.
We track job issues when they arise, identify how they happened, and discuss how we can be better going forward. Is more training required? Do we need to stop specifying a certain piece of equipment (for example, a cheaper mount can be difficult to install, which actually costs you more in time and labor).
We ask to debrief with clients after bids whether we win or lose. It helps us be better every time we answer an RFP.
4. Sell and Network
- Owners can be very effective salespeople. Customers appreciate having direct access to owners. We meet with our key customers on a regular basis and ask for feedback on how we can be better.
- We joined organizations like NSCA and PSNI. These networks have allowed us to learn from our peers and provided us with excellent revenue opportunities by teaming up with other integrators for work in our region or on projects we weren’t big enough to tackle on our own.
- We closely watch local business news sources for announcements about developments so we can get in early on larger projects.
- When we do good work, the word gets around. We find that our reputation helps us positively now.
None of these factors translated to success on their own, but, collectively, they led to the doubling of our integration business. Meanwhile, we continue to focus on No. 3: Stiving for continuous improvement.
Laurie Mackeigan, CPA, is president of Backman Vidcom. She is an NSCA board member and a member of the NSCA Financial Leadership Council.