Once again this year, the CEDIA Region 1 AGM was preceded by the association’s Business and Technology Forum. This consisted of four sessions, whose subjects had been chosen following a survey carried out by CEDIA in July to determine the real-world issues and technologies of greatest relevance to custom installers.
 

Each session was led by Matt Dodd of thinkingbricks, CEDIA’s education chair, and featured contributions from guest speakers; however, Dodd did an excellent job in maintaining high levels of discussion and dialogue with the audience throughout the day.

 

The first session, entitled ‘Lots of small jobs versus fewer big jobs’ produced a wide-ranging discussion about how custom installers can manage the project mix.

There were different opinions on whether or not to accept smaller, less profitable jobs in the hope that larger ones will follow. One delegate said that if you put in a TV for a multimillionaire one week, he may call you next week when his son is moving into a flat in Knightsbridge. Another said that having developed a good relationship with an architect, that architect now goes to clients on his behalf and tells them to accept his prices. However, among developers, said another, there’s an increasing trend to drive down the price of jobs and put everything out to tender next time – so there’s no relationship being built.

Installers, particularly larger ones with higher overheads, may have to turn down more straightforward jobs. If you quote a ‘fair price’ for hanging a TV, said one delegate, you will lose money. Unfortunately, said another, the cost of hanging a £299 screen hasn’t changed from the days when that product cost £5,000.

 

Larger companies can benefit from having a mix of jobs sizes running at once, as it can prevent engineers from being unoccupied between jobs. Any spare resource can be sent on site to the big project, where there will always be something for them to do. Very small companies, however, may find that big projects monopolise their time during the week, leaving little time to send out proposals for future jobs.

 

Other factors affecting project profitability include:

-       In smaller jobs, are there ‘margin makers’ in the kit list?

-       Complexity – either in the sales process or the install – will reduce profitability.  

-       Don’t forget that the sales process has costs attached.

-       Think hard before taking a job that’s worth more than a month’s turnover. There may be significant cashflow risks, particularly if it overruns.

 

Finally, here are some advice points from the session, from delegates and from business consultant Jon Peterman of Icon Business Solutions (who is offering a free company ‘health check’ to CEDIA members):

-       Draw up a business plan ­– it doesn’t have to be 50 pages. Don’t just do it for the bank and leave it in a drawer – measure your performance against it.

-       Understand the day-to-day fixed and variable costs of your business, and build them into your costing structure.

-       Keep timesheets, and review the job when completed. If unexpected things happened, do you need to change any processes?

-       For bigger jobs, put in a certain number of meetings into your quote and make it clear that you will charge for additional ones.

-       For long jobs, set up stage payments so that your cashflow remains healthy. Try to arrange it so that you at least break even before the final payment.