Commercial Integrator + Security Sales April 2024 - 4344

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3 QUESTIONS
Solutions360 on Top Tips to
Run a Better, More Effi cient Business
CI chats with Solutions360's Bradford Dempsey
on how integrators can step away from
busywork and, instead, focus on maximizing
their business eff ectiveness.
Commercial Integrator: What
does it mean when we say
integrators are so busy working in
their business that they don't have time
to work on their business?
Bradford Dempsey: I fi rst heard that
term almost 40 years ago. I think it was
introduced by a book called The E Myth,
by Michael Gerber. And he talks about the
concept of working on busy things in the
business - basically, executing things.
What he calls " falling into the role of the
technician. " We're just busy fi xing things,
as opposed to working on the business. We
like to divide it into three areas: people,
process and tools. What is the structure of
the business? What's the strategy? What's
the vision? What are the things that we
can do which actually build a better and
stronger business?
CI: What are some tips that integrators
can leverage?
Dempsey: I'll break it down into an idea
that takes days to implement, one that
may take weeks and one that may take
months.
The fi rst time we're introduced to many
integrators, one of the fi rst things we see
is that many of them are not valuing their
labor correctly. We call this the labor burden
or understanding how to price their
labor. Let's say a technician is making $25
an hour. Well, you can break that into the
2,080 hours a year that technician works,
but then you have to add all the other
things like taxes, healthcare, liability
insurance and all those other things.
Then, on top of that, that employee has
a certain number of days during the
year - especially when they're salaried -
where they're getting paid, but they're not
actually producing
revenue for the
business. That's paid
time off , holidays, etc.
So, right away, we're cutting
down that 2,080 hours down to
about 1,800 hours.
Then, on top of that, we have something
called utilization. It's very important
you look at how much of that time is
being spent in revenue-generating
opportunities for your business. That
doesn't mean you're necessarily invoicing
for every minute they're working. They
may be working on a service contract
where you're getting revenue from your
customer. But the key is, they're revenue
generating. And good companies are
quite oſt en only in the 80% range for that
utilization. What that basically means is
that tech who's making $25 an hour realistically
is costing you closer to $50 an hour.
So, item one is to really understand what
your labor costs, and then use that when
you're rolling out your projects and you're
trying to fi gure out your profi tability.
Another area where we see a lot of
integrators burning up value is in presales
engineering. Now, as we know in
the integration business, those engineers
are some of the most skilled...some of the
most expensive...resources we have. And
when we deploy them to help us make
sales, that's a very important function. But
how much does that really cost us? And
what percentage of the value of that sale
is eaten up with pre-sales engineering?
And then, on top of that, are we rolling
that pre-sales engineering cost into the
overall profi tability of our completed
project, if we win it? And then, fi nally, if
we're not winning deals, how much of our
Bradford Dempsey,
CEO and founder,
Solutions360.
engineering cost is going toward
deals that we just didn't win?
Finally, there's estimating the way you
deliver. That means taking everything
from the building blocks we just talked
about - understanding your true labor
cost, understanding your pre-sales
costs - and then building that into your
estimating process so that the way you
estimate...the way you break it down as
far as material, labor, phases, WBS...maps
out to the way you actually execute the
work that you do. Because, if you do that,
you get a feedback loop that allows you
to estimate more accurately. And it's not
always about coming up with the lowest
estimates; it's about coming up with the
most accurate estimates. So that, when
you actually deliver your work, you're not
losing margin...you're not losing profi tability.
And, quite oſt en, it means you can
estimate more competitively because you
do truly understand your costs.
CI: How can people learn more about
Solutions360?
Dempsey: Well, obviously, you can visit
us at Solutions360.com. I'm on LinkedIn.
And we also have a division called
Navigate Management Consulting. It's a
company we acquired a couple of years
ago. But Navigate has an academy -
NavigateAcademy.net - and all NSCA
members have free membership to Navigate
Academy. So, I think that's a great
resource. We talk about all three of those
areas: people, process and tools. CI
April 2024 | Commercial Integrator+Security Sales & Integration
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http://www.Solutions360.com http://www.NavigateAcademy.net

Commercial Integrator + Security Sales April 2024

Table of Contents for the Digital Edition of Commercial Integrator + Security Sales April 2024

Commercial Integrator + Security Sales April 2024 - Bellyband1
Commercial Integrator + Security Sales April 2024 - Bellyband2
Commercial Integrator + Security Sales April 2024 - Cover1
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Commercial Integrator + Security Sales April 2024 - Cover3
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