This past week, my company, Custom Theater and Audio (CTA) celebrated 20 years of being in business. That’s a pretty huge milestone and one that not many small companies can claim. CTA started before DVD, flat panels, or HDTV, and we’ve managed to evolve the company over the years to keep up with the changing economic times and remain relevant and valuable to our customers.
I can’t take any credit for starting the company; that all goes to my business partner, Allen Ryals. He saw a need for audio/video installations in the booming “Grand Strand” area in Myrtle Beach, SC, and decided to come up with a business plan, take out a loan, open a store, and turn his love for audio into a career. In fact, I was not around for the first 2.5 years the store was open, during which time Allen established many of the policies and procedures that we still use to this day, and created many of the rep and distributor relationships we still cultivate.
Twenty years is a long time to be in business, and a metric of success by any means. Here are 10 principles that I’d say have helped and guided our company over the years.
1. Do the Right Thing
If this sounds simple, that’s because it is. People want to be treated right, and that means doing the right thing by them, whatever that is. Sometimes that means eating some labor when something goes wrong. Sometimes that means substituting an upgraded component or part because you know it’s the better long-term solution. Sometimes that means adjusting the schedule to accommodate an emergency that arises. Doing the right thing also means treating people fairly. This something that refers to both your employees and customers, as you won’t be able to stay in business for long without either one of them. If you keep this as your guiding light in your business dealings and professional relationships, then you’ll go far.
2. Show Up When You Say You’re Going to Show Up
…and do what you say you’re going to. Over 20 years, our company has developed a reputation for being reliable, and now we get more new jobs and repeat business just by showing up to the job when we say we will. Barring something really unusual, when we tell someone we will be there at 9:00 a.m. on a given day, we are there at 9:00 a.m. on that day. I can’t tell you how often at the end of a job a client will tell me, “You are the only trade that came when you said you would and did what you said.” It’s a small thing, but, really, it’s practically everything.
3. Don’t Go in for ‘Amp of the Month’
There are always lots of new and cool products coming out, and sometimes it is the right move to expand your product offering and bring in a new product or brand. But you don’t do your company, your installers, or your customers any favors if you are constantly changing the brands you support because something new and popular springs up. If you are always chasing the “amp of the month” (as Allen likes to put it), then you will never be satisfied or consistent with your product offerings. Also, bringing in new “unproven” technology is one of the surest ways to get into trouble on a job.
4. Be Smart With Your Money
A steady stream of income is the grease that keeps the big wheel of your company rolling, but even after years in business your company will inevitably experience times of both feast and famine. If you are smart with managing the cash flow and cash reserves, you’ll be able to weather those slow times and grow during the busy ones. This is especially true if you are dealing with mega-projects where you will have massive swings of money coming in and going out. Being smart involves thing like taking advantage of prompt pay discounts, not using the money from one job to pay for another, etc.
5. Build a Great Team
It takes a village to raise a child, and it takes a team to pull off year after year of successful business operation. If you think you can do it all yourself, then you are not only going to be working yourself into the ground, you’ll be limiting the amount of work you can accomplish. A successful company has trustworthy people at a variety of different positions to handle the many things it takes to run an installation company. Beyond just the technical aspects of installations are the logistics of handling scheduling, inventory, accounts payable and receivable, payroll, project management, vehicle maintenance, etc. Find a team that complements your business style and that will help you where you are weak.
6. Don’t Be Too Big for Small Jobs
Now this might play differently in other markets, but I often heard from people at other companies who would say things like, “Our company turns away any job under $X.” Granted, if you are swamped with five and six-figure jobs, that’s great; you are obviously doing something right, and I realize that is the way it is in some markets. But I know that a lot of these companies went out of business or had to drastically cut back a few years ago because those big jobs dried up and their reputation for turning away work hurt them. For the majority of us, those “small” jobs—installing a Blu-ray, hanging a TV, fixing a network, adding a remote—are great ways to get your foot into a new door or to re-establish a relationship with an existing client. I also tell my guys that a van in our driveway is a van that isn’t making money, but a van on the road is a van that is.
7. Be a Product and Industry Expert
When people come to you for help, their previous electronics experience has likely involved shopping at a Big Box store. You want to show them a level of product knowledge and expertise that overwhelms anything they received elsewhere, showing that you are the technology expert they should put their trust in. This means thoroughly knowing both your products and the industry, being able to compare and contrast your offerings with other things available should they ask about something, and be able to explain trends in the industry that they should be aware of. Also, people will likely know if you aren’t being honest and genuine, so don’t be afraid to say you don't know something instead of just trying to make up an answer. But also know how to get the answer if need be.
8. Know Your Limitations
Inevitably there are going to be things that your company doesn’t do so well or that aren’t profitable for you. Years ago we made the decision to stop offering satellite system installations. At the time it was one of our biggest service call headaches and one of the least profitable segments of the job. Instead of continuing to fight with it, we decided to partner with a local satellite installer. It has proved to be a great relationship as he doesn’t want to be involved in home theater installations, and he is happy to have the “free” business that we send his way. This is his area of expertise so our customers are still being taken care of, but the burden is off our plate.
9. Look for the Right Ways to Expand
Twenty years ago our company focused almost solely on prewires and installation of housewide audio and home theater systems. And for many years, this kept us with as much business as we wanted. But if we had never expanded beyond that core focus, we’d have gone out of business back then. As the industry developed and changed, we moved into lighting control, automation, networking, camera systems, and security. Some companies have reached out to the commercial side of the industry.
10. Remember, We’re About Fun
Without question, this job has its share of stress and challenges, but ultimately, we are essentially a toy store. While few people actually get excited when the plumber, electrician, painter, flooring crew, or other trade shows up, nearly everything that we sell or install is about having fun and are things that our customers want and look forward to using. We make the home a fun place to live in. Our systems host Super Bowl parties, fill homes with music, make homes safer to live in, and turn complicated technology into a simple button press. Make sure that you and your crew remember that when interacting with customers.