Advice from an integrator and a financial coach on how to optimize your business position in a sudden time of crisis
As the pandemic continues, integrators around the globe are anxiously looking at their books, concerned about overhead and cash flow.
So what’s the first thing to do?
“Don’t panic,” is Job Number One, according to Leslie Shiner, founder of the Shiner Group
, a financial management and consulting firm based in California. Shiner – well known to the hundreds of CEDIA members who’ve taken her classes at Expo over the years – suggests proceeding from your current situation with a deep breath, and an honest assessment.
“Most integrators started out small, and if you are forced to shrink your company, that may actually help,” she says. That doesn’t mean a permanent contraction. “There are two things to be paying attention to,” Shiner explains. “First, what do I need to do to get through these next weeks or even months, and secondly, what do I want to have in place when we start to approach some kind of normalcy?”
The Here and Now
Gordon van Zuiden, longtime CEDIA volunteer and founder of the U.S. firm cyberManor
, notes that everyone’s timelines will be different. “It’s a first-in, last-out situation. We here in California shut down early, and we’ll likely be opening later than some other parts of the country.” However, van Zuiden feels that the construction industry will be inverted: “The last thing to close will be the first thing to open up. Think about the nature of what we do on a construction site. It’s an open-air activity, it can be controlled in terms of the number of people that are on-site. That’s a positive.”
“We’re finding that right now, about two out of three customers don’t want us in their homes just yet.”
The downside is obvious, says van Zuiden: “The other part of our business is going into people’s homes. There are three criteria here that are important to understand. First, don’t go in if it’s not legal. If the government says that a specific task is non-essential, don’t risk it. Two, your employees have to be healthy and comfortable with working in someone’s home.“We’ve passed the first two – a lot of what we do is defined as ‘essential’ in many parts of the world,” says van Zuiden. “The third is the real wild card: Do the customers want us in their home? Even if the network’s an issue, right now people’s primary concern is their health, their safety. We’re finding that right now, about two out of three customers don’t want us in their homes just yet.”
That last point means that business will be off for a while, no matter the changes in public policy or measured “re-openings” of local economies.
Assessing Your Overhead
So what’s a bottom-line-watcher to do?
Leslie Shiner turns to recent history. “I’ve looked at the companies that were profitable back in 2010, and the companies that weren’t. The biggest difference: the companies that were successful kept their overhead in line with the size of their company.”
And right now is a perfect time to assess one’s overhead, and take a hard look at what costs can be mitigated. “Hopefully, you’ve got people you can really talk to: your insurance broker, your CPA, your lawyer. People who can help you navigate this thing.”
Take insurance as a quick example: Are you parking some trucks right now? Do you need to be paying for coverage while a portion of your fleet is sitting idle on your lot? Who can help you with a potential reduction in premiums?
When this all ends, though, van Zuiden sees a silver lining: “We are essential, and we might as well leverage that. When you think about future marketing, positioning – if a government believes that we’re critical to our society’s well-being, that’s a wonderful thing.
“It’s not just about toys for the rich and famous. We really have a responsibility to keep the world connected.”