TOP
STORIES
 1 of 5
Electrosonic Named 2014 Integrator of the Year
Celebrating its 50th anniversary in 2014, Electrosonic's leadership has its eyes on ensuring the firm lasts at least another half-century.
 2 of 5
Crisis Averted: How 2 Firms Came Back from the Brink of Disaster
SVT and Altel Systems share their tales of tumble and turnaround to help those who may face the same problems prepare for the worst.
 3 of 5
Interactive Video Wall Promotes Recovery at Delaware Children’s Hospital
Kinesis Studio installs gesture-based activity wall for duPont Hospital for Children that gives young patients interactive landscape during recovery.
 4 of 5
Flashback Friday: Advanced AV Assists Ryan Seacrest Foundation
For this week's edition of Flashback Friday, go inside the first broadcast center of its kind inside Children's Hospital of Philadelphia. Seacrest opens the 8th studio today at Children's Hospital in Boston.
 5 of 5
Advance Technology: From Mom-and-Pop to Emerging Industry Force
Advance Technology, a $7.7M firm with limited resources, turns industry obstacles — lack of service revenue, IT convergence and talent recruitment — into competitive advantages.
Integrators Share Fiscal Cliff Fears
Integration firm business suffers as clients are stuck in a "state of 'I don't know.'"

Article


"[A]s long as Washington continues to be divided across party lines that does not benefit ... my business, which is a small business, or our industry,” says Tom Berry, Jr. of Verrex.
December 06, 2012 | by Aaron Stern

It’s that time when businesses budget for the coming year. This year that task is more challenging than ever.

That’s because no 2013 financial strategy is complete without a contingency plan for the looming fiscal cliff - the $600 billion package of tax hikes and government spending cuts that will kick in on Jan. 1 if Democrats and Republicans in Congress are unable to strike a deal to avoid it.

Integrators could be hit hard if their clients are forced to delay or abandon previously planned projects. Cathy Mrosko, director of government affairs and industry outreach for the National Systems Contractors Association says that integrators and clients alike are taking a “wait and see” approach.

“Everybody is in a state of ‘I don’t know what to do,’” she says.

“It’s definitely having an impact,” says Bill Craig, VP of business development for Logic Integration in Lone Tree, Colo. “For clients that are considering starting projects, everything is on hold until the first of the year.”

While the implications of the fiscal cliff would likely extend to all market sectors, integrators who work with the government or whose clients rely on government funding could feel the heat first, but few will be spared if tax hikes force other industries to pull back.

Related: 5 Business Lessons from the Fiscal Cliff by Daniel Newman

“The cliff has to do more than anything with government spending; [but it also] has everybody even in non-government industries just staring,” says Bruce Kaufmann, CEO of Human Circuit in Gaithersburg, Md.

As always, sustained drops in business will require integrators to cut their own costs.

“[U]ltimately, your biggest expense is payroll,” says Tom Berry, Jr. of Moutainside, N.J..-based Verrex. “You’ve got to look at payroll, and also where you pursue that business. If the U.S. develops a position where it’s tough to do business, then it drives business owners outside the United States.”

But cutting costs won’t just be about staffing. NSCA executive director Chuck Wilson says integrators are already looking at what the potential changes to the tax code could mean from an ownership standpoint and how they can minimize their tax burdens for next year.

“‘[Do] I write off a lot of inventory like I usually do?,’” he asks. “‘Do I do that in 2012 or do I carry forward that higher amount of excess inventory this year so I can harvest those losses next year? But then again the Republicans are looking to close up those types of loopholes. The real estate that I [theoretically] own, do I get rid of it this year because they’re closing up loopholes?’ So it’s kind of cool that our members are thinking so strategically about the ownership of the companies.”

Some integrators interviewed for this story said they aren’t overly worried about the fiscal cliff and that they assume a compromise will be reached to avert it. But many aren’t so sure, and the implications of a potential political failure shouldn’t be underestimated, says Berry.

“I think ultimately our hands, our fates are with the politicians,” he says. “And as long as Washington continues to be divided across party lines that does not benefit in any way shape or form my business, which is a small business, or our industry.”

About the author

Aaron Stern - Managing Editor
Prior to becoming the managing editor of CI, Aaron was a content editor for TechDecisions. As a reporter he has covered local, national and international news. Follow him on Twitter: @aarondstern.
View all posts by Aaron Stern
Social Bookmark or Share This
  • Facebook
  • Twitter
  • Digg
  • Del.icio.us
  • Yahoo! Bookmarks
  • Google Bookmarks
  • StumbleUpon
  • Technorati
  • Reddit
  • Windows Live
  • LinkedIn
  • Evernote
  • E-mail


  • Latest
  • Blogs
  • Photos
  • Resources
White Paper:
Changes in Workplace Design Equal New Revenue

Code adoption and an office cultural shift toward collaborative environments, create demand for integrated mass notification emergency communication and sound masking solutions.

White Paper: 5 Ways to Profit While Saving Clients’ Money on Utilities
White Paper: Campuses Banking on Emergency Notification, Upgrades
Webcast: Unscrambling Your AVB, HDBaseT Questions
White Paper: Technology Brief on Control Rooms
White Paper: The Voice: How to Design Emergency Communication Systems with Announcements
White Paper: Digital Signs of the Times
White Paper: A Snapshot of the Onsite Freelance & Contractor Workforce
View more papers or webcasts



Recent comments

Are you sure that Almo is the first to offer these services? SYNNEX has been offering installation services…

Posted by Josh Aldridge on 2014 11 21 · commented on
'Almo Pro A/V: Installation as a Service?'.

RPM-AVS has been providing these services to the leading integrators in the US for over twenty years. After…

Posted by Rodney Milner on 2014 11 20 · commented on
'Almo Pro A/V: Installation as a Service?'.

Do you see WHY tuition is so high in college? It has nothing to do with better education and everything to…

Posted by Follow N Money on 2014 11 18 · commented on
'University of Oregon Builds Football Performance Center for Champions'.

This article is disappointingly inaccurate.
The idea that 4K allows people at a distance to see content…

Posted by J. Johnson on 2014 11 17 · commented on
'5 Awesome Applications for 4K Video Projection'.