For integrators, one of the best elements of attending CEDIA 2016 is the unexpected business-related gems you learn from commiserating with your fellow custom integrators.
I am not talking about product discoveries, but tidbits related to running your business effectively that are often overheard in the aisles or in the educational sessions.
For the past several years, industry consultant Leslie Shiner has conducted the “Work Smarter, Not Harder” workshop designed to encourage integrators to share efficiency tips. This year, her panel included CE Pro 100 integrator Dennis Jaques of Maverick Integration in Nashua, N.h., CE Pro 100 integrator Shawn Hansson of Logic Integration in Lone Tree, Colo., Mark DiPietro of SoundVision in Mooresville, N.C., and Randy Stearns, president of D-Tools and a long-time integrator.
Here are 26 great tips from the panel and the audience that you might be able to implement today.
1. Keep Craigslist Ads Year-round
Finding employees is like fishing: the bait (your ad) has to be seen by the fish (your potential employee) exactly at the time he or she is swimming past (or seeking a new job in the case of an employee).
If you cast your line out just 30 seconds before or after that fish swims by, he never sees it. For integrators who use Craigslist to find employees, Mark DiPietro of SoundVision maintains his ad year round. The employment ads are only $25 per month.
Also, whenever you place a Craigslist ad, there is a barrage of applications. Then if falls off. By renewing the ad monthly, it bubbles back up to the top of the queue and more applications come in, he says. On the flip side, many integrators do not like Craigslist because they are bombarded with resumes and often the candidates are not well qualified.
2. Ask Distributors for Employees
One great source of potential employees are distributors. They are in discussion with integrators every day, so they know who is busy and who is not. They also hear from technicians who might be seeking new employment. It’s a good idea to put the word out with your local distributor whenever you are seeking employees.
On the flip side, some integrators don’t want to send their technicians to pick up equipment at the local distributor for the same reason … they will likely be solicited for employment elsewhere.
The best way to prevent that from happening is to breed a strong company culture whereby a technician is not going to jump ship for 25 cents more per hour from another company.
3. Shadow Employees
DiPietro says the best way to rapidly onboard a new technician is to “shadow” him with a more experienced technician. That can be difficult if you are a very small operation, however.
4. Create a ‘Process Book’
Dennis Jaques of Maverick Integration is so process-driven that he created a 500-page book that documents every process the company does, from pre-wire to trimout to final.
“Every employee is set to that standard and have to pass the test in the book. They don’t get the next book until they pass the test on the first section,” he says.
To create the book, Maverick started by spending $500 to purchase the ESPA training curriculum, then added to it. Today, the company has spun off a separate training group called the Maverick Technical Institute that trains dealers not just how to install a system, but even how to ring the doorbell when they arrive at the home, how far to stand away from the doorbell and how to greet the customer.
5. Put a Ceiling on Wages for Every Position
If you keep employees for a long time because your company is such a great place to work, eventually you will run into a situation where a long-term employee has reached the limit of what you can pay him or her and still earn a profit.
At Maverick, Jaques has a chart that shows employees how much the company can charge customers for certain tasks. The chart also shows the wages that each position in the company tops out at.
“At some point, I cannot afford to give an employee a raise every year if he stays in the same position for years and years,” admits Jaques.
By being so transparent with his staff, it encourages them to seek to learn new skills and to grow so they can elevate into other positions in the company. When hitting ceiling compensation and maximizing payroll, one way to retain those employees is to give them commissionable opportunities that do not steal from the sales team.
6. Use Subcontractors for Prewires
At Logic Integration, the company uses subcontractors for all its prewires.
“They must wear our company logo shirts, and they have to come to our office first so we can see what they look like before they head to the site,” notes Shawn Hansson, president. The company regularly uses 10 to 12 subcontractors.
7. Offer Lifetime Warranty on your Craftsmanship
At Logic Integration, clients’ product warranties are activated using a “Final Completion Date” in the contract. The company warranties the individual products based on their manufacturer warranty, but for their own installation expertise, Logic offers a “lifetime warranty on its craftsmanship.”
In other words, if an in-ceiling speaker ever starts to slip or a mount starts to tilt, the company will fix that for the life of the system.
“Customers love it,” says Hansson. “It speaks to the quality of our team and our sales team uses it.”
It is vital for the company to have a clearly defined scope of work for that lifetime warranty to work well. Logic has a specific scope of work that includes certain “assumptions,” such as the company is going to have access to your house, and certain “exclusions,” such as they are not liable for damage from acts of God, do not run conduit, cannot assure that the Internet will be working 100 percent of the time because of the ISP provider, etc.
8. Load Trucks the Night Before
It’s a simple idea, but one that can save lots of time in the morning and help beat morning rush hour sometimes.
9. Have All Suppliers Email Receipts
Even Home Depot will email receipts. Never have a lost receipt again.
10. Use Only Digital Contracts
In today’s paperless world, using pdf contracts with digital signatures eliminates bulky paperwork.
11. Drive Time Labor
If you are based in a high traffic area, customers can balk at paying labor for drive time. One integrator uses a compromise plan where he pays technicians and charges clients for the drive time to the job, but not on the way back to the office.
12. Hold Only Stand-up Meetings
Studies show that if you hold your internal meetings standing up and do not allow your team to sit down, the meetings will go much faster and be more productive.
13. Pay High-school Kids to Wash Vehicles
Who has time to wash their trucks and vans? And do you want to be paying a technician to do that? Find a high schooler to wash your vehicles.
14. Use Virtual Assistant Services
Most small integrators don’t have the revenue to add an administrative assistant to the payroll. There are virtual administrative assistants that can be hired only for the time they spend working for you.
Gwendolyn Hays of Wired Automation in San Antonio not only runs her own company with her husband but she also doubles as a virtual assistant service for others. She says it is like having an additional member of the team. Executive Assistant Help (www.eahelp.com) is one option.
15. Give Free Service Calls in Exchange for Referrals
In a business that thrives on referrals, one good way to assure new prospects is to every once in a while give a client a free service call in exchange for three referrals. If the service call is on Super Bowl Sunday, ask for 10 referrals.
16. Consider Flex Time
Flex time is the most important benefit that employees look for today in an employer. It can be hard for small companies to offer, but it is something to consider.
17. Reward for Online Reviews
In today’s world where online review websites like Yelp hold a lot of cache with customers, Logic Integration gives any employee a $25 gift certificate for getting a positive customer review — either about them or the company in general — posted online from a client.
18. Charge 15% Higher Price for Referred Clients
According to Randy Stearns of D-Tools, if an integrator is referred to a project, he will get that job 80 percent of the time.
“So if you are referred, your price can be 10 percent to 15 percent higher and you will still get the job. For a non-referral, you need to bring everything with you (insurance, client list, etc.) because it’s likely that someone else has been referred to that customer,” so you need to prepared to “wow” them.
19. Encourage Family Environment in Your Company
Not only will this make employees happier, but Hansson recalls how he once got $1 million job because client came to the office, met the team, and saw all the photos of the team having fun.
20. Look at Gross Profit Dollars Per Man, Per Day
There are lots of key metrics to look at when running your company, but Jaques focuses on one: gross profit dollars per man per day.
To achieve the profit percentage he wants, Maverick leads its sales presentation with the profitable product categories first, such a floorstanding speakers. If the company is able to sell a pair of floorstanding speakers with high margin, that frees them up to perhaps offer a product with lower margin on that project.
“I lead with the products that are most profitable for me. I don’t lead with Apple TV. I know where we want to be. It makes it really easy. If your target is $300 GPDs per man day, you can get to that level if the job has floorstanding speakers that are very profitable. Look at what other profitable accessories you can offer to bring up those GPDs,” says Jaques.
He points out that the only reasons an integrator should ever deviate from his profit margin goal on a project is if he is trying to gain the future business of a key partner, such as a builder or architect.
“The number one thing I see on a takeover job is that the previous dealer miscalculated the labor hours,” he adds.
21. Hold a ‘Done Done’ Meeting
At Logic Integration, 45 days after every job is complete, the company holds a post-mortem meeting to review the success or failure of the project.
“We call it a ‘done done’ meeting because post-mortem sounds bad. Lately all our projects have been successes because they have been profitable.”
Among the things to look at avoiding that eat profit away are overnight shipping and delivery costs., etc.
22. Share Only 50% of Project Profit as Bonuses
Performance-based pay is effective to motivate employees, so bonuses are good. But sometimes when dealers finish a super-profitable job, they tend to want to share that entire windfall with their team.
However, when a job finishes under profit, the owner eats it in the wallet all on his or her own. So, Stearns advises technologists to only share 50 percent of the profit from a project with employees.
At Logic Integration, they share a percentage of the company profit at the end of the year. Bonuses are paid based on each employees’ gross pay and years with the company.
“Everything is transparent. Our company performance is on digital screens around the building for everyone to see,” says Hansson.
23. Withhold 25% of Sales Commission Until Job Completion
At Logic Integration, 25 percent of sales commissions is held until the end of the job. A review document from the web rates employees from 1-5 by topic. Logic Integration sends something similar to the employee to see how they rate themselves, then the manager does it.
24. Know Your Labor vs. Equipment Cost
At SoundVision, DiPietro targets a 36.1 percent margin on every job over $5,000. Using that metric, he is able to easily calculate his labor rates for every job. Once he knows what his equipment costs are, he only has to simply layover 36.1 percent of that equipment cost for labor.
25. Use Apps to Have Employees Clock In
Logic Integration uses software called TSheets to track employee time. When an employee logs in, the software grabs that notification and starts tracking it automatically against the labor bucket for that job in QuickBooks.
“If the app is on a company-owned phone, you can force a GPS location log tag to pop up at the moment of clock in to make sure the person is not logging in from the golf course,” says Hansson. Logic Integration requires both its billable and non-billable employees to clock in. Journyx is another similar time-tracking piece of software.
26. Create a Project Closeout Checklist
When a project closes out, there should be a checklist of things to do. At Logic Integration, that list includes a requirement that the project manager or lead technician take photos of the rack and all the access points. Those are included in the leave-behind manuals/documentation.
Other checklist items include contact information so the client knows who to call, getting a client final sign off, and asking the client for a review.
Stearns recommends that the service technicians in your company do a final Quality Control review of projects so that job can be formally turned over from the installation team/project management to the service team.