In a classic line from The Godfather, Michael Corleone tells his brother Sonny, “It’s not personal, it’s business.”

That mantra may have worked for that family, but for husband-and-wife business team Barry and Andrea Reiner, separating what’s personal from what’s business is simply not an option — and never has been since they made the decision to launch their company 28 years ago.

It was 1988, on a sandy beach in Jamaica, that the couple first pledged their commitment to each other and their vision of a business upstart.

Within a year, they said their “I dos” to each other and Innerspace Electronics Inc. (IEI). It’s proven to be a perfect pairing all around.

Starting a company specializing in home theater and A/V made good sense for the couple. Barry was working as a general manager for a custom systems integration company in New York City at the time.

It was a time, incidentally, in the industry when manufacturers were only just beginning to get involved in building multizone control systems.

Translation: if someone wanted a multiroom audio system in their house, they turned to a custom installation company.

This experience, coupled with his previous role as assistant VP of operations at Harvey Electronics, had well prepped Barry to take the leap.

Andrea was equally prepared to take on the demands of managing the financial, marketing, sales and administration functions for IEI. For eight years before incorporating Innerspace Electronics, she served as a systems engineer and then marketing representative for IBM with specialties in telecommunication, mainframe applications and personal computer systems.

From Humble Beginnings

Although their business is booming now — they’ve grown IEI into a $6 million dollar business that ranks No. 40 among the CE Pro 100, and took home the coveted CEDIA Best Integrated Home Award in 2015 — the Reiners, like so many young couples starting out, had to start small and work their way up.

After ditching their day jobs, Barry and Andrea began running their business out of a one-bedroom apartment in Manhattan and toted the equipment they needed around in their car. Growing the company slowly and steadily on referrals and word of mouth, they transitioned to a three-bedroom space in the city.

The long hours and firm commitment to expand the business and its staff was showing a solid return on investment, and the Reiners decided to leave Manhattan and rent a home/office outside the city in Westchester County. By the early 2000s, IEI was employing about 30 people, and Barry and Andrea made their final move to their current 9,000-square-foot office and warehouse location in Port Chester, N.Y.

Most recently, they have enhanced that location with the addition of a showroom that the Reiners refer to as an “Experience Room/Center” for hosting clients, classes and events (see photos).

See more photos of the Experience Room.

While their customer base comes primarily from the affluent areas of Westchester, Manhattan and the Hamptons in New York as well as Fairfield County in Connecticut, they’ve also done some high end work in Florida’s South Beach and in London. Barry points out that they didn’t want to limit IEI to being strictly an A/V installation company, but rather chose to leave themselves open to integrate other technologies into their product lines.

“I had a great bunch of years of experience building A/V systems, and knew there must be more,” he says. “My role has always been engineering and production, and managing installs and sales calls. Andrea’s role is marketing, lead generation and finding avenues to sell our wares. One day someone called her and asked if we did phone systems and she said, ‘Of course we do!’ I hadn’t done them but, the reality is, I read up on Panasonic lines and we went on from there.”

Soon after, IEI signed on as a Lutron HomeWorks Dealer, and started doing lighting control systems. The firm soon added motorized window treatments to their scope of services.

“We wanted to be a one-stop shop, so the focus was not just on A/V,” Andrea explains. “We were interested in being systems integrators, I guess, even before that’s what they were called.”

Because of its geography, the majority of IEI’s clientele would be considered affluent compared to most areas of the country. Consequently, demand is strong for high-quality systems. Being so close to Manhattan has also had its perks when it comes to the investment into both new and retrofit work.

“We have this whole New York City portion of our lives. Yes, it’s an expensive place to do work in, getting in and out of the city, but be that as it may, the reality is that when the new-build market came to a halt up here, there was the opportunity to do the retrofit market there,” Andrea explains.

“Again, it’s about moving with the trends and keeping your eyes open. There was a large influx of foreign capital moving into Manhattan, which is really a renovation market and is booming right now,” Andrea adds. “We started doing large Park Avenue apartments and marketing ourselves to do full-scale townhouses. We always did a little bit of it, but between 2009 and 2012, it became a large segment of our business. And now, the new-build market up here seems to be completely back. We never thought we’d see that marketplace back.”

Photos: Inside Innerspace Electonics' Experience Center

Surviving the Recession

IEI concentrates on retrofits, high-end custom, new production homes, etc. Barry says that’s it’s an even mix, and has varied over time, depending on the economy.

“Now we focus a lot on high-end, new construction,” he says. “When the 2008, ’09, ’10 market came to a screeching halt, some companies failed, some survived and some prospered. We looked at our 20 years of legacy clients and noticed many needed upgraded technology. We went to them to retrofit their systems, rebuild their networks and most of them said yes. So, for a bunch of years, we had a very lucrative retrofit market.”

Key to success, he contends, is following economic times.

“We were fortunate to have had a good, strong selling run before the bomb dropped,” he explains. “We had a year backup of work in progress, so that was lucky.”

Barry adds that IEI has always positioned itself as a good value alternative in the marketplace.

“We’re very value conscious and try to bring that to our clients. Even with high budgets, we try to give them the best value we can rather than load them up with things they don’t need.”

The Reiners have found that offering a well-rounded mix of services is a good insurance policy, particularly in an industry where market factors and consumer trends can shift rapidly.

“I don’t think you can successfully survive in one segment of this market,” Barry says. “Your potential for cash flow problems is strong if all your projects are nearing completion. You need to complete a segment to bill for the next. You start when construction begins and end when the paint and rugs are done.

“I think you have to have smaller stuff in the mix. We call them fast-track projects, such as just doing a multizone,” he adds. “They’re lower dollars, but they’re fast pays and increase your cash flows. Having a mix of all of it helps keep you successful.”

IEI is a Lutron Diamond dealer and Savant Platinum dealer. A typical, fully integrated project from Innerspace includes a whole-house A/V system, lighting control system, substantial motorized window treatment contract, enterprise-grade wired and wireless network, security cameras, HVAC control, pool and hot tub control.

Although the company provides surveillance cameras systems and network DVRs and integrates them into its control systems, IEI does not sell or install alarm systems. Through integration, though, Innerspace will enable the homeowner to be able to command their security systems via a familiar control interface.

“If the client wants to view and disarm the alarm, we provide that and talk to the alarm company so they can control them through their iPhones or iPads,” Barry says.

Keeping a Competitive Edge

Being able to set your company apart from your competitors is a crucial part of a winning business strategy, but one that’s easier said than done in the custom integration world.

Andrea and Barry make themselves completely available to always respond to client requests and service requests no matter when they come in. Another differentiator they cite is their expertise on the design and engineering side.

“We have really good design and AutoCAD skills,” Barry notes. “IEI’s technicians and design staff are constantly trained in the latest advancements in technology and best practices and, as a longstanding member of CEDIA, benefit from the finest, most demanding training and certification available.”

Putting those design and AutoCAD skills to work, IEI gets involved in jobs as early as they can. They offer to take architects’ designs and present them with full-scale wiring plans for A/V and lighting systems that they can give to their electricians before the foundations are poured.

“Our drawings are top shelf and when we show them to the builders and architects, they’re impressed and appreciative. It allows them to organize their jobs as easily as possible.”

The quality of Innerspace’s work speaks for itself, with industry accolades underscoring the quality. IEI over the years has collected numerous honors from CE Pro sister publication Electronic House’s annual Home of the Year Awards as well as CEDIA’s Electronic Lifestyle Awards.

Like many integration firms, Innerspace has also looked to diversify its revenue streams.

To date, IEI has not offered service contracts but is currently considering the pros and cons of adding this form of potential recurring monthly revenue (RMR). Andrea notes that for the past four years or so, almost all of their systems have remote access, and therefore the ability to be diagnosed and corrected remotely.

“We didn’t have a business model as to how we would profit [from RMR] and some of our customers did very well because of that! We see some people are way ahead of us with RMR, so that is our next rollout effort. The challenge is how do you go back to your clients and say you’re now charging them for the remote service? It’s more complicated than it appears,” she says.

“At a recent HTSA [Home Technology Specialists of America] meeting, they said they’re not calling them ‘service contracts,’ but instead calling them a ‘Technology Package.’ It’s more about saying we’ll come and clean things up. As much as all of us want to start making money with RMR, it can be a longer, slower process to make the decision to change from our traditional availability to help 24/7 at no charge.” 

Speaking of decisions, hindsight is always 20/20 but when asked about their best and worst decisions they have made, the Reiners can pinpoint answers rather easily. Andrea and Barry concur that their worst business decision was passing up the opportunity to buy a small building in Westchester when they were starting out.

“The real estate market in Westchester is so expensive now. We wish we had bought it then,” Andrea says.

The best business decision? Barry states emphatically, “When Andrea turned to me on a beach in Jamaica 28 years ago and said, ‘Let’s start a business’ and I said, ‘Yes!’”

More Company Profiles: Learn from Integration Firms Like Yours

Author Erin Harrington is a New York-based freelance writer and public relations consultant for the custom electronics industry.

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