Revenue And Profit
vertical as a primary market for their business. This month's MarketWatch survey confirms that the corporate vertical is also the top revenue producer -- over 50 percent of respondents say so.
WE ALL KNOW that most professional AV system integrators serve customers from a variety of vertical market segments. There are between eight and 15 (or more) discrete verticals, depending on how the markets are defined. One consistent trend that we see in industry surveys is that most AV firms consider the “corporate” vertical as a primary market for their business. This month's MarketWatch survey confirms that the corporate vertical is also the top revenue producer — over 50 percent of respondents say so.
Which vertical market generates the most revenue?
What percent do each of these activities contribute to your total net profits?
One of the more surprising findings of this month's survey is the revelation that only a little more than half of company respondents admit that they meet their annual profitability targets. About one-third of respondents aren't sure whether or not they are meeting targets.
Which of these business activities do you participate in?
Any businessman will tell you that revenue and profitability do not always follow a linear relationship. The most striking disparity between revenues and profits reveals a rather counter-intuitive result. For all the talk about product commoditization and margin erosion, survey respondents report that, on average, equipment sales account for 58 percent of their net profits, yet only 47 percent of their total revenues.
Of course there could be many reasons for this result, but, in general, it could be interpreted to mean that pro AV system integrators have learned how to deal with the margin issue on equipment. Perhaps they are selling more high-margin gear. Or maybe they are responding to the marketing strategies offered by some manufacturers that have addressed the margin issue directly, and are shifting their product offerings to lines that offer a higher margin potential.
In general, does your company achieve its profit target?
What percent do each of these activities contribute to your total revenues?