It’s not uncommon to get caught up in looking at what’s ahead as we try to drive the most successful business possible. How can we not? With so much thought leadership and media content based on what the future is going to look like, it’s to be expected that we try to wrap our arms around what the “next big thing” for our businesses will be.
The rhetoric about technology’s future can, at times, be so overwhelming that integration firms get completely stuck in their tracks…and I’ve seen it happen. It’s almost as if there are so many options to choose from about what to do next that they do absolutely nothing at all. Although this is never a good option, it is surprisingly understandable.
The future is a tough thing to predict; however, I have no doubt that there will be a lot of change coming in the integration space. The collision of IT, security, AV, media and more has come to a head. Integrator consolidation has been happening at a rapid pace. We have to keep our eyes looking forward, but we need to be better at managing the short term so we have a chance of even getting to the long term (or, as I like to say, we need to see the forest and the trees). Let me explain what I mean.
I referenced the importance of looking ahead in terms of our businesses. But I also referenced the fact that it can be really hard to do that with so much going on. This pressure to look forward can create difficulties for a business in any circumstance, but a business that struggles to be successful today has almost no chance of successfully driving meaningful change in the future. The key is to do both: Have a vision for the future, but also be cognizant of how you can make profit and drive a successful business right now. The best integrators do this, but it isn’t easy. The integrators that nail it are focusing on these things.
The best integrators have figured out how to be profitable in every aspect of their businesses. Many integrators focus on one profit leader while almost turning other parts of their businesses into loss leaders or mere value adds that cost time and resources…but make the company little money.
If you are consulting, designing, building, servicing and training, then why wouldn’t you seek to make all the stages of the project profitable? The most successful integrators give away nothing because they articulate that everything they sell is connected and drives value, and that they can do things better than the competition.
Taking Advantage of What’s in Front of You
I see the strongest integrators taking advantage of programs and benefits that drive the bottom line, from buying better through participating in groups or just negotiating better pricing and terms with core vendors (many have limited their number of vendors and, instead, strengthened their position with a few solid partners). This isn’t just for products, though. With things like healthcare, business insurance and even rent, savvy companies find every opportunity to be thriftier and drive a better bottom line. Saving on these shouldn’t mean offering lower quality; it should mean better negotiating and taking advantage of industry associations (like NSCA) to maximize your savings wherever possible.
One great example is the work NSCA has been doing through a partnership with alliantgroup to help integrators take advantage of the R&D tax credit. The first thing we usually hear from integrators about this tax credit is, “We don’t qualify because we don’t do any R&D,” but it turns out that we just have to look at things differently. The R&D tax credit was specifically designed for the benefit of companies that design, integrate and implement technical solutions for their clients. These are companies just like yours. The credit has been in place and used by hundreds of adjacent industry firms for years, but few integrators are taking advantage of this tax credit dangling right in front of them.
In just six months, 22 NSCA members have already uncovered more than $10 million in tax savings. These are companies just like yours, working on AV integration, security and control systems, building automation and life safety, custom programming, etc. In most instances, these integration firms have used their tax savings to hire the best and brightest people in the industry, so they can continue to offer advanced technical solutions that fit the tax-incentive profile.
Maintaining a Loyal Customer Base
The opportunity to keep our current customers has to be taken more seriously. Many integrators I speak with are too content to hope for new business. “Hope” is not a strategy, and it’s really expensive to find new business. If integrators worked a little harder to make sure they kept customers, the opportunity to grow would be less of a challenge, and financial wellbeing would empower a greater future.
The future is exciting. New technology, new business models and a new set of challenges to give us purpose can be promising (and scary). The best thing we can do is build our companies to be successful in the short run while keeping our eyes aimed at the future so we can shift, change and adapt as needed. The more successful we are today, the easier it is to be ready for what comes next. But it isn’t either/or: It’s both. We need to see the forest and the trees to be ready for what’s coming next.
If you want to learn more about taking advantage of the R&D tax credit, contact us at www.nsca.org/alliantgroup.