Homely Doesn’t Have to Mean Ugly
Credit Crunch and Price Concerns
Credit, or lack of, unemployment and foreclosures are the most serious topics facing this economy. The tight belt has affected many buyers’ abilities to borrow money. This means fewer customers who can afford home improvement for retrofits or financing for new homes, which includes adding security and A/V options, not to mention monthly monitoring contracts. 
As a business owner, you have two financial worries. You need to concern yourself with your company’s financial health, and you need to worry about finding customers who have money or credit available to purchase your services. Generally speaking, companies that have the biggest overhead are facing the most financial challenges today. This includes those with showrooms and/or employees with idle time on their hands. Other companies seeing financial hardship are those without cash reserves in the bank.
According to Tom Farinola of Atlantic Stereo, a Costa Mesa, Calif.-based A/V installation company, “We’ve leveraged our history of success to stay afloat. We have business loans currently available, equity from our home and credit with manufacturers. We also have cash in reserves that we stockpiled during the good times so we could ride out the hard times.”
Atlantic Stereo has become more aggressive in its collections. “With so many installers going out of business, it makes consumers hesitant to give money upfront,” says Farinola. “That’s where longevity comes in and we can secure deposits upfront and along the installation process. We will even allow a customer to do a credit check to see how solid and stable we are.”
According to most security companies, having customers move away continues to be the leading cause for losing accounts. However, customer defaults and nonpayments are on the rise, which is the second-largest hardship on security companies today. One way to reduce invoice defaults is to create a Credit Card Authorization Form that will allow you to automatically charge payments against your client’s credit card. Also investigate QuickBooks Pro software, which features an online credit card payment and authorization service that stores sensitive client information in a password-protected format.
Get creative in your approach to financial salvation. For example, look
to manufacturers for opportunities to streamline business costs and practices. A single brand solution enables consolidating suppliers and saves on administrative costs. With increased order sizes, you often get additional benefits such as better shipping rates or dealer support programs.
Riverside, Calif.-based Proficient Audio, for instance, recently launched a line of A/V receivers to offer a complete audio system.
“Our new receivers give dealers a single brand solution, making marketing and selling systems easier,” says Keith Marshall, president of Profic
ient.
“Installers will be able to get all of their audio equipment from one brand and utilize our new end-user marketing materials. This approach really changes the game. No matter if you’re putting in a home theater, a multi-room or outdoor sound system, Proficient will be able to supply the electronics, speakers and accessories you need.”
Distributors like Capitol Sales of Eagan, Minn., stock more than 5,000 products so you don’t have to commit your financial resources to carrying inventory. Product categories include audio/video and security. According to the company, more than 98.5 percent of all orders are shipped the same day they are ordered. Online orders are shipped free when delivered UPS and there is no order minimum.
With respect to fuel costs, the price is down … today. But that could change tomorrow. So you need to be prepared in the event that gas prices increase again. Establish a process to deal with rising fuel and maintenance costs for vehicles. Some tactics include:
- Centrally locate all your technicians into territories
- Let your technicians take the trucks home at night
- Provide technicians with laptops, printers, fax machines and wireless Internet
- Ship all products and materials directly to your customer’s house
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