Not much is certain in commercial integration, especially right now. But the one thing you can count on as an integrator? Uncertainty. (Frustrating, isn’t it?)
Considering shifting tariff policies, elevated recession risk, supply-chain volatility and shrinking margins, integrators are under more pressure than ever to get and stay profitable.
But there’s good news to consider here: Integrators aren’t powerless in the fight for profits. Recently, NSCA and some of its members, along with Commercial Integrator and Security Sales & Integration, discussed practical steps integrators can take now to stabilize business.
If building a more profitable and resilient integration business is your goal, then start with these five actionable strategies from our recent conversation, which you can watch on-demand.
1. Strengthen Your Terms & Conditions
Contracts are your first line of defense against profitability erosion. Too often, integrators reuse boilerplate terms or sign customer-provided agreements without tailoring them to protect their own interests. When you do that, you shift risk away from the customer and onto yourself—sometimes without realizing it.
You should regularly revisit your terms and conditions to make sure they cover the following:
- Contract-termination clauses that define what happens if a client cancels a project midstream, including recovery of sunk costs
- Shortages and force-majeure language which clarifies that you cannot be held liable for supply-chain disruptions beyond your control
- Protective payment terms that move you away from backloaded payment schedules, secure upfront deposits and implement milestone billing to maintain healthy cash flow
If you need help weaving this kind of language into your agreements, NSCA members have access to Tips to Reduce Risks in Product Procurement as part of our Essentials Library. This tool offers practical guidance on doing so.
2. Choose Your Projects Wisely
Profitability is often won or lost long before the first cable is ever pulled. For this reason, take extra care when evaluating whether to pursue a project. Many NSCA members believe they’re “winning” on a project when they’d be better off leaving that job behind.
Watch for red flags like the following:
- Unrealistic timelines or schedules that assume instant product availability
- Incomplete or one-sided specs that shift risk disproportionately to the integrator
- Scope documents that blur responsibilities between trades, increasing the risk of disputes
Sometimes, the smartest and most profitable decision is to walk away from a high-risk project. A disciplined evaluation process helps avoid the revenue chase that erodes margin.
Watch: Profit Killers: The Most Expensive Mistakes Most Systems Integrators Make
3. Strengthen Your Procurement Practices
Although supply-chain volatility has eased since the peak of the pandemic, it remains a disruptive factor. Delays in receiving critical equipment can lead to missed deadlines, strained client relationships and higher labor costs.
Try the following practical procurement strategies to secure resources when they matter most:
- Pre-order critical path items whenever possible, even before final approvals
- Build strong distributor and vendor relationships to gain priority allocation during shortages
- Diversify suppliers to avoid dependence on a single manufacturer or channel partner
- Communicate early with clients about realistic lead times to set proper expectations
Integrators that proactively manage procurement risk are better positioned to deliver projects on time and protect profitability. Through webinars, publications and live events, NSCA offers several opportunities to stay informed on external factors that can affect your business — from regulatory changes to workforce-development incentives.
4. Tighten Your Financial Controls
Uncertainty makes disciplined financial management critically important. Profitability is a daily operating discipline that requires constant vigilance, not simply a year-end metric to review after the fact.
For more predictable profits, strengthen practices in three key areas:
- Cash flow monitoring that tracks inflows and outflows and relies on rolling forecasts to anticipate shortfalls
- Margin protection that covers overhead — not just breakeven — and avoids razor-thin bids just to win work
- Reserves and contingencies that build in buffers for unexpected costs, whether material price spikes or project delays
NSCA offers many tools that help integrators compare performance, identify vulnerabilities and strengthen profitability posture.
5. Embrace Proactive Communication
Strong communication with clients and employees can be a profitability tool on its own, helping you control the narrative surrounding how challenges are managed and perceived.
With clients, early conversations about potential risks like supply-chain delays, tariff impacts and cost escalations help set expectations and avoid disputes later on.
With employees, transparent conversations about business challenges foster trust and engagement, ensuring that the whole team works toward profitability goals.
In an environment in which uncertainty is the norm, proactive communication helps integrators stay in control of their narratives.
Preparation Is the Ultimate Advantage
Remember: Uncertainty doesn’t have to equal helplessness. By tightening contracts, vetting projects carefully, managing supply chains, strengthening financial discipline and leveraging NSCA resources, you can build resilience into your business.
Even in a turbulent environment, you have tools that can protect your margin and position your company for long-term success.
If you want to watch the entire webinar, in which we reveal lots of details and insights, search for “Improving Your T&Cs to Mitigate Risk” at NSCA.org and view any time.
Tom LeBlanc is executive director of NSCA. To learn more about becoming an NSCA member, visit NSCA.org.
