It’s not up for debate: Financial leadership is critical to success. Financial leaders are the team members you rely on to take hard stances and set standards and precedents to make sure technology integration projects are profitable.
Now more than ever, empowering your financial leadership to make changes that protect your integration firm from vulnerabilities, while also supporting profitability, is key to coming out ahead.
To continue to put this financial leadership discussion front and center, NSCA recently invited leaders from within our industry to join a virtual roundtable conversation on this very topic. Our experts included the following:
The discussion is worth listening to on-demand. There is a lot of specific information shared about the sales KPIs you should be tracking — and how to track them.
Here, however, we want to present the advice these experts shared about operating amid economic uncertainty. How do you do it? What’s the secret?
It’s no surprise that economic factors influence integrators, but there are steps you can take and resources you can utilize to weather those storms.
Emphasize Accurate Forecasting
Forecasting isn’t something that sales teams love to do, especially when bookings and backlogs are down. “When sales are high, things can be covered up, and forecasting doesn’t always have to be right on,” Bernard points out. “But when the tide comes in, all the rocks and boulders are exposed.”
Without accurate forecasting data, your company may be negatively impacted when jobs don’t come in as planned — or it may face a tidal wave of projects it wasn’t prepared for.
Miller indicates that sales have been slow to get off the ground this year. Clients are putting projects on hold, saying, “We’ll call you when we’re ready.” Uncertainty like this begs for accurate forecasting.
Without accurate predictions about what’s to come in terms of revenue, how can your company make smart decisions when it comes to resources and investments?
Rely On External Data
Capital spending matters in this industry — and following it is a critical component of success.
“If you’re not following what CapEx spending is doing in your markets,” Harris says, “whether you’re in healthcare, K-12, government or commercial, then you’re probably missing some really important points about what’s going on.”
To get a sense of what’s happening in the industry, Bernard’s team holds monthly virtual meetings to give techs, installers and project managers in the field a chance to share what they hear about opportunities and upcoming projects.
Tools like NSCA’s Electronic Systems Outlook report can tell you which technologies are in demand in which markets — and where — at any given point in time. That way, you know where and how to focus your sales and marketing efforts. Using this data can also be a way to uncover business opportunities in new markets in which you haven’t tapped in the past.
Many integrators also gain valuable insight from NSCA chief economist Dr. Chris Kuehl. He not only leads an economic outlook session at the Business & Leadership Conference every year but also checks in every quarter with NSCA members to share what he sees in terms of economic conditions and their impact on the industry.
Call On Your Network
Think about all the people who help your company get projects done. They have unique perspectives and insights you can use.
Ask your manufacturing partners what they see in terms of sales.
- What’s happening in specific markets and regions?
- Which technologies and systems are most popular right now?
- What do they anticipate shipping more of next month? What about the month after that?
Reach out to your bankers, accounting firms and attorneys to understand what they see. “While you may be the only integrator in your banker’s network, I can guarantee they’re working with companies in adjacent industries and are seeing trends there,” Harris says.
Tap into the specialty trades you work with in the construction industry — namely, HVAC, plumbing, electrical, even general contractors — to see what they’re experiencing.
“We’ll even confer with non-competing furniture resellers to gauge what they’re seeing from customers,” Miller says. “They’ll sometimes see orders before we do, depending on the project.”
Build a Picture of What the Future Holds
“We’ve seen a lot of crazy waves over the last three or four years,” Miller says. “Our jobs have evolved as a result. We need to know what will happen if certain situations play out.”
If XYZ happens with the election or the supply chain, how will it affect your company? How will you respond? Having these answers can help you prepare and dedicate resources to the right places.
Scenario planning can help drive timely financial decision-making. And it works best when you walk through these exercises and develop a plan before you have to execute it.
“This should be something you do on a consistent basis,” Harris says. “I remember working with Kevin [Miller] during COVID-19, and we outlined the various options we thought would happen. Then, when it does happen, you already know what you’re going to do about it.”
As Miller describes, it’s easy to fool yourself when you haven’t conducted scenario planning. His team had been working without an operating budget in hand. To begin their scenario planning, they established one for the first time. From there, they played around with different circumstances — cutting XYZ, adding ABC — to see what happened.
“It’s not long before you realize how much you’re spending on engineering but aren’t billing enough for it, for example,” he explains. “The more you put numbers to it, the more you shine a light on it. And it makes everything less scary. It may not make you happier, but at least it gives you something actionable. You can sleep at night knowing that, if X happens, then you should add two people.”
Uncover More Industry-Specific Financial Insights
If you want to listen to the entire conversation, visit the NSCA website. If you have any questions about what we covered in this column or the KPIs discussed in the roundtable conversation, we’ll be glad to connect you with any of the experts who joined NSCA to deliver this vital industry conversation!
Leah Garris is marketing and communications content leader at NSCA. To learn about becoming an NSCA member, visit NSCA.org.
