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Give a Little

As the editor of a magazine representing this industry, one of my biggest frustrations in the past eight years has been the general lack of access to reliable statistics about our target audience. There are many valid reasons why business data have been hard to come by in the past, but recent efforts by CEDIA are finally beginning to fill this void.

You may recall that the trade association launched its Benchmarking Survey a couple of years ago. Though it has yet to produce the truly representational numbers that a journalist would prefer, the survey is definitely headed in the right direction. However, the only way to make this project completely successful and useful for all of us is through full participation from CEDIA-member residential electronic systems contractors.

To its credit, CEDIA had a 37-percent increase in member participation in the Benchmarking Survey last year, which, association officials explained, helped to decrease margins for error and solidified the results as viable growth indicators. The CEDIA Benchmarking Survey included questions in the areas of compensation, financial ratios, sales performance, profit margins, strategic planning, and marketing.
Some key findings of the survey revealed that 85 percent of respondents, regardless of business size, used a fixed contract type as opposed to time and materials. It also showed that revenues for companies with a written strategic plan are 24-percent higher than those without. And more significantly, profitability is 34-percent higher in companies with a written strategic plan versus those without a plan.

All CEDIA members in the United States and Canada had the option to participate in the survey. Only those members who participated in the survey received the report, though I was given access to more key findings…just to whet your appetite even more:

1.  Regardless of revenue size, years in business, or average project size, approximately two-thirds of revenue is generated from equipment sales and one-third from labor.

2.  Companies that utilize job costing, recognize significantly higher profit margins than companies who do not.

3. Seventy-five percent of customer referrals yield additional business.

4. It is the industry norm, regardless of years in business or project size, to utilize design software and charge for design time.

5. More than 85 percent of respondents employ at least one CEDIA-certified employee.

6. The overall average cost to build a showroom is $143,959.

7.  Although 85 percent of respondents use a fixed contract type, the companies using time-and-materials contracts have a higher gross margin and higher operating profit per FTE (Full-Time Equivalent).

8. Companies in business for 10 years with an active written strategic plan have 38-percent higher revenues and 40-percent higher profits.

9. Seventy-three percent of respondents indicated that they have a written marketing plan.

10. Fifty-nine percent of companies have a location for customers to tour custom electronic installations.

I think that this is fascinating information, and theres a lot more where this came from, if you participate in this fully confidential process (only an independent analysis firm will read your answers).

The 2008 survey will be available April 7 to May 16. It will be sent out to all CEDIA members in the U.S. and Canada via e-mail and will also be available online in the Members Only section at

Its time to give a little to get a lot back.