Rising Stars Reveal Growth Secrets
In the first-ever Rising Stars list, 25 integrators reveal how they are growing revenues. Hint: There is no set-in-stone formula.
The recession is over, so why aren’t you growing? It’s a big question to which many integrators don’t have an answer. Instead, they have lots of creative excuses.
“Where I live, people still aren’t spending money.”
“Builders in my area still don’t understand technology.”
Consumers price shop all my proposals.”
The truth is that many custom integration companies are not only growing, they are skyrocketing. So what’s their “secret sauce”? ere isn’t one. Even still, as part of its first-ever Rising Stars list, CE Pro has identified 25 integrators from local markets across the country that are each experiencing rapid revenue growth … some on track to increase top-line income by as much as 220 percent. Not all these successful companies are newbies, where you might conclude it’s easy to grow at a fast clip. Indeed, one company has been in business for more than 23 years and many on the list earn well over $1 million, with one topping out at over $5.3 million. These veterans have re-discovered the winning combination for growth in post-recession America.
Each Rising Star is graciously sharing their formula for growth, and each one is different. Some are relying on networking and commercial work, while others are seeing a surge in home automation and audio. Others say security and recurring revenue are their money-makers.
Location: Benton, Ark.
2013 Growth Rate: 25%
2010 Revenues: $24,000
2011 Revenues: $41,500
2012 Revenues: $163,400
Years in Business: 3
2012 Installations: 31 residential; 2 commercial
Highest Growth Categories: Audio (400%); Video (300%); IT (100%); Control (400%); New Construction (200%)
How they did it: “In March of 2012 I invested heavily into an Internet Marketing campaign (Google AdWords) and spent significant time on reconstructing and optimizing my website,” says owner Jeff Jenkins. “As a result, traffic to my website has increased from 389 views in February 2012 to 2,282 views in February 2013. At least 80 percent of our new business is generated from our website. I also invested in a print marketing campaign around Christmas in which I mailed out coupons to potential customers as well as gift certificates to existing customers. I also began a referral incentive plan in 2012 where my clients would receive a $100 credit for referring new customers. They can use this credit toward any new equipment or services.
“But possibly the most important factor in our growth has been product knowledge and communication. We bid against other companies around 75 percent of the time, and if we are selected I always like to ask the customer why they chose our company. Every single time they have told me it was because I was very educated on the products and responded to them in a timely matter. I make certain that all of our estimates have a 24-hour turnaround time. More often than not, I will be awarded the job (and in a few cases finished with the job) before the client receives the estimates from the other companies.”
FX Pros has also experienced a 200 percent growth rate in new construction. How? “Legwork. I spent several hours every week going to job sites and introducing myself to builders, electricians and real estate agents, and through these relationships I was able to slowly establish myself in the new construction market,” says Jenkins.
Lucid Integrated Systems
Location: Robbinsdale, Minn.
2013 Growth Rate: 60%
2010 Revenues: N/A
2011 Revenues:: N/A
2012 Revenues: $219,000
Years in Business: 1
2012 Installations: 25 residential; 2 commercial
How They Did it: Lucid Integrated Systems is on track to do $350,000 in revenue this year, nearly a 60 percent increase across the board in all categories. Owner Jeremy Pierquet says it’s because “We think outside of the box, o er exceptional customer service and over-deliver a solid, very reliable system that returns numerous referrals.”
Location: Milford, Conn.
2013 Growth Rate: 20%
2010 Revenues: $253,987
2011 Revenues: $420,188
2012 Revenues: $500,000
Years in Business: 4
Highest Growth Categories: Control (100%);IT (50%); Recurring Revenue (50%)
How They Did It: “We stopped selling less expensive equipment in general,” says AVIT Technology president Richard Roderick. “We sell great business-class networks and higher-end products throughout. We do not do the lower end of the market well so we stopped trying to compete in that space.”
The company is an IT shop, along with focusing on home automation and security. AVIT has also had success in the retrofit market with takeover jobs and some commercial work.
Captive Audio Ltd.
Location: Austin, Texas
2013 Growth Rate: 13%
2010 Revenues: $2,000,000
2011 Revenues: $2,500,000
2012 Revenues: $3,100,000
Years in Business: 19
2012 Installations: 175 residential; 10 commercial
Highest Growth Categories: Audio (20%); Video (20%); New Construction (30%)
How They Did It: Captive Audio is on track to bring in $3.5 million in top-line revenues in 2013, a 13 percent increase in one year and a 75-percent hike in four years. According to partner Scott Benkendorfer, shade control, networking and video switching are the three primary product growth areas. Likewise, outdoor audio and the new construction sector have been healthy. The company does not focus on security and recurring revenue at all.
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at firstname.lastname@example.org
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