Commercial Integrator January 2022 - 18

2022 STATE OF THE INDUSTRY
Number of commercial projects completed in past 12 months.
16.9%
More than
200
12.8%
101 to 200
28.4%
26 to 100
18.2%
11 to 25
fewer
23.7%
10 or
Even as optimism reigns
among integrators, we
find that numbers of
commercial projects
completed remain
relatively low.
percentage of end users who are planning
capital improvements across the quarters of
2021. " Many of those capital-improvement
plans should soon blossom, resulting in
integrators having to decide which projects
suit their talents.
on more of a flat budget, but we are also
going to be increasing our margins, setting
up incentives and focusing on being a
more efficient team. "
Fewer Projects, Greater Complexity
One superficially discordant datapoint lies
in our question about how many commercial
projects respondent companies
had completed over the past 12 months.
A surprisingly large proportion of survey
takers (41.9%) indicated that their firm
had completed 25 or fewer commercial
projects during 2021. (As a point of
comparison, only 30.6% of respondents
indicated that in the previous survey.)
By contrast, just 29.7% of survey takers
reported having completed more than
100 projects during 2021. For that metric,
the prior survey's comparison point was
39% of respondents. Therefore, it appears
that integrators are completing somewhat
fewer commercial projects, but they're
nevertheless optimistic and projecting an
up year ahead. So, what gives?
NSCA's Wilson chalks it up to integrators
focusing on the kinds of projects that call for
the expertise and knowledge they're selling.
He explains, " We have to be willing to say,
'We're going to focus on our sweet spot,'
which, in many cases for the NSCA member,
is the larger and more complex project. " This
aligns with Wilson's mantra that integrators
should sell value, and that value often comes
with an appropriately sizeable price tag. He
continues, " Let's do fewer jobs, but let's do
the bigger jobs that we scale better to. And
18
let's do it in a way that we know how to make
money doing these things. "
Deciding which projects to take on
might become an increasingly important
challenge. AVIXA's Labuskes indicates that
the association's research paints a rosy
picture of demand for integrators in the
months ahead. He remarks, " AVIXA's market
research doesn't track project numbers,
but our Market Opportunity Analysis Report
[MOAR] does show a steady increase in the
Incredible Vanishing Margins
Both NSCA and Commercial Integrator
spend a great deal of time offering resources
to help integrators run their businesses
better. Perhaps no single consideration is
more critical than ensuring every single
project is profitable and contributes to
positive cashflow. In that regard, ever-shrinking
hardware margins can pose
a real threat. According to NSCA, making
roughly 30% margin on hardware is about
right, given that most integrators have
overhead-cost percentages in the high
20s. Somewhat alarmingly, though, our
survey data shows many integrators are
struggling to hit that mark. Indeed, 24.2%
of respondents reported that they make
10% or less in hardware margins. Another
28.9% indicated that they make 11% to
20% in margin. If NSCA's figures are correct,
that would imply a sizeable number of
We've only just
scratched the surface
of integrators'
indispensability for
commercial buildings,
a fact that will redound
to our benefit in the
years to come.
Commercial Integrator JANUARY 2022
commercialintegrator.com
http://www.commercialintegrator.com
Commercial Integrator January 2022

Table of Contents for the Digital Edition of Commercial Integrator January 2022
