Opening Night at CEDIA Management Conference
3/5/2009 5:20 AM
There's sports lingo that my business friends like to use when referring to the fundamentals of running their companies: "basic blocking and tackling." While those exact words were never actually used during the opening night of CEDIA Management Conference here in the "fictional town" of Carefree, Arizona, that's essentially what I heard electronic systems contracting (ESC) business owners talking about last night.
The days of denying that anything is wrong with the economy or anyone's business seem to be over. Everyone admits that it's tough going, but I was greatly relieved to learn that what our current economic climate has forced "dealers" to do is return to the basics. The ESCs with whom I spoke said they were opening their eyes to any work that related to their business. They no longer thumbed their noses at a $500 job but were very careful about establishing proper billing schedules when working on a long-term $500,000 project. Some still seem to think that we're only in the midst of a crisis of confidence. I wish it were that simple. Unfortunately the core of the financial system, the banks and Wall St., are frozen, and that, for the folks dependent on their lines of credit, creates a very difficult business climate.
One ESC from Portland is "doing OK" because he never really leveraged his company with too much borrowing. His solution to some of his current business challenges was to clean up inventory, streamline his staffing and really dig deep into labor hours, finding out how much time certain tasks really took his crews. It's basic blocking and tackling, in other words. For his company, however, a security monitoring business that was once scoffed at by his industry peers is where a lot of his current working capital is coming from.
A lot of our friends in the industry are simply taking the down time that they have from a slowing pipeline of business, to make their businesses more efficient. That's not a bad thing, as long as the cash flow doesn't completely dry up.
One final thought from last night. We're here in Carefree, Arizona, which is 30 miles outside of Phoenix. The town is about 10 years old and is absolutely a product of the real estate bubble. My room at the Carefree Resort & Villas feels brand spanking new. I went for lunch yesterday and other than one small group of ladies, from some sort of business function, the restaurant was completely empty. There were two women at the pool outside. An industry friend told me, "This place is hurting. They're really happy to have us here."
If we needed one more reminder about the reality of what's been going on in our country, there it is.