Dealers have been telling Jason Knott, Editor of CE Pro magazine, the recession is taking its toll on mid-sized integration companies, not the bottom-feeders. He writes:
Everyone knows 2009 was a lousy year. CE Pro lost about 10 percent of its subscribers. That means electricians, IT VARs, security dealers, and home automation and A/V integrators who all work in low-voltage integration went out of business.
In the long run, that dropoff is good for the industry. Presumably, those were the weaker companies. You know who I am talking about. The guys who are working without proper insurance or licenses, who don’t belong to an association or who don’t maintain general business integrity.
I am not including companies that work from home because there are plenty of high-integrity CE pros who operate from a home office. Also, I am not including one-man shops. There are many solo acts who run their business with integrity.
But many CE pros in the past months have told me the companies that folded in their area were not the “trunkslammers,” but but were mid-sized integrators operating with a handful of employees and trying to make a go of it.
Guys who carry worker’s comp, have competitive installation rates, offer warranty service, etc. Integrators with leases on an office, trucks, paying employees, not just using subs.
Why? It’s because the trunkslammers are more nimble to react have no overhead. I was told they are “stronger than ever” in certain local markets. If that’s true, heaven help us.