If you want to grow your audio visual business, you have to invest in it. That’s a fact. There are two issues with that. No. 1, most company owners and executives are slow to acknowledge that they have enough cash flow to start investing.
No. 2, it’s extremely difficult to come up with a smart game plan for investing in your company’s growth.
Tackling No. 1 is easy. Whether you think you have a lot of extra capital or not, chances are the economy may force you to invest in your audio visual business sooner than later.
Our State of the Industry Report shows a 9.5 percent growth rate for the average integrator in 2019…but the problem is that — despite high demand for integration work — gross profits for integrators aren’t particularly high compared to overhead costs.
In other words: you’re probably making less per job, and you need to combat that in case of an economic downturn.
We’re not intentionally trying to scare you with that last line, but if you read our State of the Industry, you’ll notice that one of our sources says 2020 may not be a great economic year.
Regardless of the economy, you shouldn’t let your firm’s ability to turn a profit fall prey to higher overhead. If you have extra money that you can safely and responsibly invest in your business, it may now be time to do so.Now, let’s tackle No. 2.
How to Invest in Your Audio Visual Business
Here’s an important disclaimer: The point of this article is to get you thinking about what’s right for YOUR business. We can’t do that for you, but we can offer what other professionals say works for them. Your job after reading this is to think critically about if it will work for you, too.
That said, we’d love to be able to say “large firms seeking to expand should spend their money here;” or “small firms seeking to grow should do this.”
But the problem is that each AV business reaches success in its own particular way under very particular circumstances. We can’t therefore make broad claims about what firms in these distinct positions can do, but we can provide a different kind of framework.
“Four Circles” of AV Businesses
Chuck Wilson — our friend at the National Systems Contractor’s Association and regular CI resource — says that firms seeking to improve themselves should start with a day-to-day framework revolving around “four circles.”
Chuck says you should envision yourself walking into the office each day and seeing these circles on a chart near your desk… So we took it upon ourselves to make the mock-up you see below. Go ahead, print it out, learn it, and live it.
People We Employ
One of the most strategic parts of your company is the people who operate it. So it is incredibly important to think about employees’ skill sets today, but more importantly, what they should be three years from now.
If you or your company hires someone today, are they going to be relevant and will their employment be sustainable in three years?
Asking this question regularly will help you monitor your organizational structure and make better hiring decisions in-the-moment.
Clients We Serve
So much audio visual business is based on clients predisposed to hire you if you have the lowest bid.
But you need customers who truly value you for what you do for them; clients who want an ongoing business relationship.
Some firms have to remove clients from their lists because of continually driven-down margins and wasted time — so if that’s happening to you, don’t be afraid to politely refrain from those small, fruitless jobs.
Go To Market Strategy
Again, this circle isn’t so much about what’s happening today as much as what’s happening in the future. What trends are truly impacting the markets you serve? How are you reacting to those, if at all?
Your strategy should always include a section that focuses solely on what you can do to respond to future market needs — which, coincidentally often coincides with the “People We Hire” circle. If potential employees can’t see future innovation at your firm before their first day begins, where will your customers see innovation?
This is perhaps the most important part of any business’s plan to invest because it runs counter to the idea of spending to grow: simply put, what could be cut from the company?
Think “lean,” and be honest with yourself. Where are your inefficiencies? Do you have any form of KPI measurement? Every company has bottlenecks. What are yours?
The important thing under this circle is that you don’t immediately start to build extra costs into your budget once you start seeing successful outcomes. Investments, like every other part of your audio visual business, should be measured.
Hopefully, you’ll start to think about how each of these four circles interconnect and affect each other.
What To Avoid
Look, there are many ways to drop money on your business (which, I promise, we will cover below!), but it is more important to caution you against the approaches many have taken, and failed.
Opening offices in new places too soon
Medium AV firms who want to expand tend to underestimate just how challenging that is. Chuck Wilson says it is foolhardy to open up an office in a new region without fully understanding the regulations, licensing, and legislation that will impact your business there.
“When we go into a location and underestimate the local nature of the trade jurisdiction climate or the licensure arena… That’s been a huge problem even more so in this last year, where we’re seeing licensing changes and jurisdiction issues galore. It’s never been as bad as it is right now,” Wilson says.
Poaching from other companies
Chuck says integrators also often underestimate the loyalty of the people they employ.
“If we’re a company trying to grow rapidly and we use a recruitment technique known as ‘poaching,’ we see a growing longevity issue happening where they will come to work for a shorter time,” he says.
That’s not great if you’ve invested time and money into training them. So you’ve really got to focus on hiring people whose vision seems complementary to company goals. If it feels like you’re “poaching” someone, that may be a bad sign. Here are some hiring resources for audio visual businesses.
A “my-way-or-the-highway” approach to acquisition
There’s nothing more socially excruciating and inefficient than trying to simply insert your work methods into other peoples’ lives. You’re not going to win over new employees gained from acquisitions if you simply assume that they’ll bend to your will.
Do everything you possibly can to make your employees know you’re going above and beyond to help make the transition smooth.
Parlay with the other side — the sellers — to make sure they’re treating their handed-over employees with respect. If the “new boss” shows they care right off the bat, new employees will be more likely to be excited, rather than concerned with, their new station.
Thinking Global? What to Do
You may very likely be focused on tackling global markets if you’ve already established a solid presence in one or more regions. This could be a good idea for your firm — but, again, only if you thoroughly comprehend the different legal & regulatory considerations impacting a given area.
We’re not about to go on about the many steps involved in a global expansion process — we’ll save that for another day. But what if you’re just getting your feet wet in another market?
If you’re seriously considering global expansion but haven’t done anything about it yet, start by going to Integrated Systems Europe.
The industry’s largest trade show is also a great place to make contacts in other markets and study up on which ones could be right for you.
If You’re Smaller & Want to Change That
So your audio visual business isn’t big enough to even have the global market on your radar? Congrats, most firms are like you…But, also, yikes! Most firms are like you! How are you standing out?!
You’ll stand out if you invest in your employees
By putting your technicians through extra training, you’re investing in your firm’s ability to change with the ever-evolving technological landscape. You’re also providing them valuable tip-off opportunities when they network at these events. Here’s everything you need to know about AV training.
You’ll stand out if your company culture inspires employees
Right about here is where you’d expect to see corporate, mind-numbing phrases like “self-directed leadership” … and, ok, we admit to using these words before. But they all mean something, and your challenge now is to figure out if they mean something positive to you.
Here are some different audio visual business approaches to company culture:
Buying Out the Competition
It is very, very difficult to take one company with one set of standards and workflows and insert it into another, different company. Whenever an acquisition is considered, its impact on company culture must be at the top of the list.
That isn’t to say that acquisitions are something your audio visual business should avoid, however.
Look for under-performing companies that don’t seem motivated to take the next step towards growth.
If your company culture and business practices are solid enough to put you in a position to acquire, it can be beneficial to both sides if you consider seeking out companies who could really use your help. Become their opportunity, especially if they are in a strategic position for you.
Again, this only works if you already have time-tested on-boarding processes, company culture, and training standards.