On Tuesday, July 20, NSCA members in Chicago met to discuss how to add value to projects and for clients in light of eroding margins. I was shocked to hear some of the margins that integrators were living on. I must admit, when our members on the East and West Coasts described the competitive pressures they were faced with, I said it was because they allowed the bidding process to run their businesses. Truthfully, I never thought that same level of competition would drive margins as low as they are around the Midwest. I stand corrected.
Now, I can say – from coast to coast – our members need to figure out quickly how to survive on single-digit margins, get out of the competitive bid market, or show a profit from value-added service and labor. Something needs to change in that model soon. Although most are reporting that the business is showing signs of improvement and projects are beginning to emerge from the on-hold status, many of our contractor/integrator members can’t do business with those margins on products.
Thanks to the fine people at Synnex for hosting our meeting and Brian Lockie and Randy Tritz for helping to lead the discussion. Also, thanks to our members for being so open and honest with one another and sharing their best practices. It’s a big part of what makes NSCA such a value to everyone.
PS – Help build our community even more and share your solutions to eroding margins by emailing me or participating on conversations on NSCA’s LinkedIn or Facebook accounts