How to Increase Profits, Maximize
Cash Flow, and Increase Referrals
My friend Tim is a pioneer in our
business and one of the very first custom
integrators I ever met. In the early 1980s,
years before a group of visionaries founded
CEDIA, Tim closed his high-end audio
store to pursue whole-house integration.
I still remember him showing me my first
completely automated home theater.
He pushed one button and the lights
dimmed, a screen and projector dropped
from the ceiling, shades lowered, and a
VCR started playing John Carpenter’s
The Thing in simulated surround sound.
I was impressed and thought there might
be a future in this stuff.
Tim!” I answered, after I recognized
his phone number on my caller ID. “Long time no talk, what’s new with you?”
“Mike, I’m specifying a job for a client and had a few questions about
the new Niles DS loudspeakers
with rear wave control, so I
thought I’d get the info from the
horse’s mouth,” he joked.
After answering Tim’s
product questions, our
conversation turned to business
and the state of the industry as it
comes back from the recession.
I was concerned that the
downturn affected Tim more
than larger integrators in the
area, yet he commented that his
business was better off now than
ever before. And when I asked
why, he said it was because he
was now “controlling” his business, or enacting business practices based
around certain precepts designed to increase profits, maximize cash flow,
and–believe it or not–increase customer referrals.
When asked to share his precepts for this article, Tim offered these five
suggestions that you can use to ensure your business prospers:
1. Define the systems you specify. Tim views his installations like
pouring concrete. “Go in once, install the system, and never go back,”
he said. “Always make sure that your client knows exactly what they will
get, and don’t play the upgrade game,” he emphasized. Now this may
fly in the face of what some manufacturers recommend, but from Tim’s
perspective, he can’t make enough incremental revenue from upgrades to
justify the jobs.
2. Document everything. “I do jobs that can be as far as 6,000 miles away,
so I need to know every component, its location, and every connection
path that enables me to get through the installation quicker and without
having to run out for parts during the job. Plus, proper documentation
forces me, and my crew, to slow down in the front end of the project and
speeds us up during the actual installation. In a LAN-based world this is
vital.” Tim told me that he uses AutoCAD for the documentation process
because it is “common language” to most architects.
It’s important to schedule meetings with your clients to discuss project milestones at the end of
each phase. Don’t move into the next phase of a project without client sign-offs.
3. Don’t assume everything works. “Never deliver sealed boxes,” Tim
said. Meaning, he tests every system locally before delivering it to the job
site. That way he can maintain 100-percent quality control. Yes, it costs
him more, but remember Tim charges a premium and gets referrals from
clients that are amazed everything goes in smoothly and operates perfectly
the first time.
4. Don’t do too much yourself. For this Tim has a multi-pronged
approach. He uses proven experts whenever possible, running wires for
example. Plus he won’t take on more work unless his time will allow it.
“I just turned down a 69K job,” he told me. “I am completing a job and
don’t have the time to properly stage the new work within the customer’s
timeline. So I referred him to another integrator.” I know that doing this
takes courage and discipline, but for Tim, it is an essential component in
controlling his workflow and hence his quality.
5. Service your customer through education. “We believe in complete
client education throughout the bid, design, and installation phases. There
are scheduled meetings with our clients to discuss the project milestones at
the end of each phase. We will not move into the next phase of a project
without client sign-offs,” Tim concluded. “An educated client is a happy
one, and someone who will give me a referral to the next job.”
So now that you know what a pioneer that has survived the ups and downs
in the market does to drive his business. What are you going to do today that
is different from yesterday to improve your custom installation company?