Too many companies settle for the profit they make instead of working for the profit goal they have set. If 20% net profit is your goal, then write a budget that gets you there. Don’t compromise until you have reviewed all your options. That is true budget discipline. › Continue reading…
Tag: reduce costs
Commission is an incentive to sell the right products, to the right customers, and profitably. We hope it will encourage our sales team to find new business too. Because we ask so much of commission, it makes sense to have multiple components. We will look at revenue, gross profit, and quotas.
I have spent a large portion of my career scheduling personnel in very dynamic environments. Over the years I have developed or copied techniques to cope with the huge demand swings. To me there was nothing unusual in what I was doing – I thought everyone did it this way. Turns out I was wrong.
If you could generate a complete design and cost estimate with the push of a button and only had to choose which profit to go with, wouldn’t you spend more time trying to win higher margin jobs? Instead, the proposal process is so expensive and time consuming that you end up selling on price instead of your craft. › Continue reading…
Time is money. In one three-day period recently I was able to identify redundant and outdated processes within a 30 employee company that using management’s conservative estimates would result in over $300,000 in savings per year- a large increase to their net profit. Their total investment after my project fees will be less…
Time to make some game-changing decisions
From Rental & Staging Systems April 2010
The fact that the Recession has ended was easy to miss, as was the beginning back in December 2007. Running a business is a lot like playing the stock market. If you remember to buy before prices go up and sell before they go down, you win. In business, we make investments in a different form, but timing is just as critical. Also important is your portfolio mix. There are three key investment areas in your business that are calling for your attention. The time to invest in them is now. A well-timed, diversified portfolio will set your company apart from the recession-bound stragglers. › Continue reading…
I just read today’s headline about the jump in jobless claims and immediately started to contrast that story with all the good news I am hearing on the street from AV folks. For the past month I have heard almost exclusively about better than expected revenue and revenue forecasts. › Continue reading…
Which things can we fix and which are here to stay?
By Tom Stimson CTS
Shrinking margins, unfair competition, price shopping customers, disloyal suppliers, greedy bankers, and a general lack of appreciation for the value of your services…does this about sum it up? Ten or fifteen years ago the industry starting mumbling about AV becoming a commodity. At that time 40-50% equipment margins and an exclusive lock on professional gear made AV dealers quite happy and the AV Industry very attractive to investors. Value-added services like design, programming, and project management were considered overhead costs and what little revenue they represented was just gravy on an already profitable transaction. › Continue reading…
The Dow Jones index is hovering around 9900, October has been a busy month, and the pipeline for 2010 has new activity. It’s time to celebrate because the economy is coming back…right? As much as I want to be excited about the spurt in business so many of us are seeing, I want to caution against resuming “business as usual”. When we get busy we start to miss the people, suppliers, and perks we still had before the Recession. The natural tendency is to reward the team for their sacrifice by hiring up, suspending those furlough days, and reinstating full salaries. I don’t think it is time yet to do this – for most of us. › Continue reading…
Once upon a time, AV integrators made good money from equipment and labor with a healthy premium for engineering expertise. Today, equipment and labor have become commodities and engineering is the value-added service we don’t get to charge for anymore. The burden of profit is now placed upon project management and operations, which is still pretty much based on the 1990′s model. There have been vast improvements in making project management more professional and educating installers. These changes alone are not enough. We need to discover the service, product, or convenience that we can charge for today, above the commoditized time and materials we are so familiar with. › Continue reading…
