41 Reasons Why Companies Are Better Off Despite Recession
The upcoming annual Big Ideas Issue (August) of SECURITY SALES & INTEGRATION features the 2010 Operations & Opportunities Report (OOR). The OOR asks executives, managers and others from across the nation and representative of all sizes of companies a host of questions targeting not only the best ways to boost profits and reduce expenses, but also the implications of implementation. In addition, respondents — more than 200 of them — were asked to identify the most promising new technologies and service offerings, as well as the most viable vertical markets. Several financial and operational questions were also included.
However, this research included scores of open-ended responses — far more than could be covered in the main article. That’s why I have pored through the material to share with you the results that follow. I hope you find them as fascinating and helpful as I do. I am really excited about the information generated by this study and look forward to continuing it in upcoming years to discern more trends and emerging ideas.
When respondents were asked, “Would you say your company is financially better off than it was 3 years ago (or since it was founded if less than 3 years)?” Nearly 58 percent said they were better off; 42 percent said they were worse off, which is an increase from last year.
41 REASONS FOR BEING BETTER OFF NOW:
- Builder business is starting to pick back up
- Good understanding of products and uses
- Staff has been pared back during the recession
- Even with the drain of operating a struggling branch office, our overall revenues and associated margins have increased more than 20 percent year after year
- Several large service agreements are now in place
- Smaller and more specific in purpose
- We have better financial reporting and can more easily identify performance issues and resolve them
- Sales investment, personnel efficiency improvements, product matching to client requirements
- We are more efficient, higher quality staff, better focused on future, maintaining at least slow growth in much tougher economy
- Larger, more profitable projects
- Lean financial operation
- We had a couple of good years prior to the bad economy and I was able to pay down a great deal of my debt
- We have a larger customer base for RMR
- We had problems three years ago and so we renegotiated our long- and short-term debt with a different, smaller bank. We also received ISO 9000 certification, making us more in tune with our customers and more efficient
- Better employee base; more long-term employees
- More brand awareness
- Better accounting practices and a better picture of where we are
- Larger installed customer base and more RMR
- Better accounting
- More profitable, but less experienced technicians
- $99 alarm systems
- Increased gross sales with new customers
- Developing a core business strategy
- We have no debt and plenty of cash in the bank
- More stable revenue stream
- More RMR
- Debt free
- More aggressive collections
- Buying equipment at a lower price and still maintaining our normal prices
- Stronger partnerships and better market share
- More focus on action plans
- Increases in revenues and referrals
- Staff capability development
- Experience with handling finances
- Increased base of customers
- We are comfortably profitable but not growing sales as we would like. Considering the economy though, we’re satisfied.
- Well thought-out strategic plan
- Keeping a closer eye on everything
- Good management, employee relations, virtually no turnover in branch managers and acquisitions
22 REASONS FOR BEING WORSE OFF NOW:
- Erratic sales cycles, economy, price pressures, wait and see attitudes
- The federal government has cut back on its defense spending in our market areas. They are our main customer.
- Revenue is off by a large percentage. Gross margins are up but revenue is down.
- Too many players in the market size
- Money is tight from potential customers
- The slow economy has led to a decrease in sales and jobs in my geographical area
- Loss of customers due to economy
- Inefficient and too highly paid employees, and rampant employer spending on nonprofit-making products
- Downturn in construction
- The economy has affected us very negatively
- Not as much business is coming in
- Financial situation
- Fuel costs, insurance costs, cost of living, rent increase; you can’t raise monthly monitoring to cover the increase of everything
- Expenses are increasing more then sales
- Economy is bad, people don’t want to spend money
- Everything is going up in price, and our prices have stayed the same because we have to underbid other companies
- Smaller backlog
- Our profit margins have shrunk due to inefficiency and increased competition
- Due to the economic downturn as well as less profitability due to high labor cost and Internet
- Sales are way down and we have a higher attrition rate on RMR
- Because the biggest nationwide recession is about to hit the fan. It doesn’t have much to do with my company or how we run it.
- Customer base is being squeezed due to the economy
When respondents were asked, “If you had to identify a single way to INCREASE PROFITS in your business, what would it be?”, some of the filled-in “Other” answers were:
- Focus on service, testing, monitoring
- Build scale and size, and execute
- Make sure all employees are organized
- Increase market share
- For us the issue is volume of business
- Ensure overhead is aligned with volume and growth
- Get paid faster
- Deal with manufacturers that do not sell online
- Increase new customer base
- Maximize employee output without raising prices
- Improve efficiency
- Increase both the number of staff employees and the quality of the employees
- Leverage engineering and design capabilities
- Sell more to new clients
- Finishing jobs in a more timely manner
When respondents were asked, “If you had to identify a single way to REDUCE COSTS in your business, what would it be?”, some of the filled-in “Other” answers were:
- Better designs
- Lessen product/hardware/tool waste
- Health coverage reductions
- Stop working for nonpaying customers
- Motivate entire staff to better capitalize on new sales opportunities
- Better training for our employees
- Raise prices to customer, but you can’t do that because the larger corporations have been pimping for so many years most people feel like they aren’t worth much. And the police and fire departments now see our industry as whores instead of partners. Thank you big, greedy corporations!
So there you have it. I hope you see some workable ideas in there.
As Always, Thanks for Reading …
SECURITY SALES & INTEGRATION
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Scott joined SECURITY SALES & INTEGRATION in October 1998 and has distinguished himself by producing award-winning, exemplary work. A Western Publisher Association's Maggie Award winner, his editorial achievements have included blockbuster articles featuring major industry executives. Since graduating in 1986 with honors from California State University, Northridge with a degree in Radio-Television- Film, his professional endeavors have encompassed magazines, radio, TV, film and more.
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com.