You, Integrated: What’s Your New Year Business Plan?
A recent industry event brought together an elite group of the top integrators in the US. This 3 day event presented an overview of our industry, updates regarding new technology and important discussions of best practices and new revenue opportunities. I attended to represent BidMagic software for integrators. As a former installing dealer for elite residential clients, I felt right at home in all of the discussions.
The morning session presented us with the latest financial statistics in home starts and consumer electronics. These stats indicted that things had stabilized since the recession that began in 2008. The current growth is very modest, but created optimism in the group that things were back on track.
Hours of presentations and discussion took place. Rather than boring you the details of what was said, I will break it down to my gut level response and my personal viewpoint on the state of our industry.
CEDIA began when a small group of AV lovers started making inwall speakers for the home. A few years later George Lucas brought surround sound to the forefront of movie viewing. VCR’s and surround sound were then joined to create the explosion in home theaters that remains the core of today’s home entertainment installation industry. I was a part of that energy and enthusiasm and launched my home installation company back in 1990.
Those days of connecting a few simple AV products with some wire, a remote or keypad are gone. Today the list of new home technology products is racing ahead at such a fast pace that few can keep up with it.
Since profits from flat screen TVs and projectors have fallen, installers have been forced to search out new profit sources. Many home installers are now turning to recurring revenue from security system installations and equipment monitoring to help. Other companies have added small commercial projects to their list of services.
Our industry is struggling to redefine itself right now. In order to be profitable and grow many installation companies now offer a mix of AV, home automation, lighting, security, network, energy management systems and more. The proliferation of mobile and network devices provides great opportunity but adds increasing complexity required by integration of multiple types of systems that use varied protocols and require multiple drivers, interfaces and work arounds. Nowadays home AV experts must also be IT experts.
Home owners today have become hooked on inexpensive technology. We now live in a time when a $200 ipod with $3 earbuds that the customer bought at Target has become the leading music source and iPad apps sell for $4.99. This has changed the customers expectation and reduced the value they place on our technology. That makes it very difficult to sell the customer a quality system with a healthy profit. Cheap sound bars from Samsung and other TV makers are now killing the demand for a system with a surround receiver with 3 speakers and a subwoofer.
Since the 1990’s when the first home theaters were installed, we lived in a world where homeowners would race to pay top dollar for the ‘next new thing’ that the world of consumer electronics would announce. The ‘next new thing’ fueled great demand and offered great profits. CDs, Laser Discs, DVDs and HDTVs brought significant innovation and lots of demand. But the Bluray player that originally sold for $1,199.00 now sells for $49.
TV and AV manufacturers are struggling with the realization that they can’t keep that party going. They placed their bets on 3D TV as the ‘next new thing’ and that was a losing bet. Now they are hoping 4K will save them, but TV makers are hurting like never before. Circuit City went down and Best Buy is struggling.
I believe that the combined effects of the constant flux of new and complex technology, the struggle for profits and the current economic uncertainties we are facing make residential installation a confusing and very challenging space to succeed in right now.
The top integrators know they can’t stay on top by relying on ‘business as usual’. They came to the event in search for ideas and solutions. They came to learn, network with their peers and to refine and redefine their plans and goals for their companies.
In the end, the success of your company comes down to your plan. What is YOUR plan?
If you fail to plan, you plan to fail. I challenge you to take time away from your busy work day and set a few days aside to meet with your staff and spend quality time working on your business plan for the new year.