It’s a situation that all solution providers have faced at one time or another: Money gets a bit tight, or a customer has trouble coming up with the capital for an upcoming pro AV or digital signage install. As a result, your deadline becomes unrealistic, and the project becomes a kind of waiting game.
It can certainly be challenging to secure the funding necessary in order to complete a successful AV project, especially if you work in a vertical with cyclical periods of high and low activity and strict annual budget cycles. However, there are several tactics for minimizing funding delays in order to keep your pro AV and digital signage projects moving forward:
Consider alternative financing.
You don’t necessarily have to pay for every piece of AV equipment in one lump sum. Today, many technology distributors offer flexible financing options that enable you to spread payments out over a period of time that works for you. Most even provide early-payoff incentives, so you could wind up saving money in the long run.
The same goes for your customers: Your company can provide alternative financing to the client, which helps create a long-term cash flow. In addition, it frees up capital for your customers and can help them afford more advanced technology than might otherwise be possible.
Lease your products.
In addition to the credit route, you also have the option of leasing your AV products. If you partner with a distributor that offers technology leases, you are able to spread the cost of each new device out over several months or even years. With certain programs, you can even opt to keep the products at the end of the lease term with a low payoff amount.
In turn, you have the opportunity to offer leasing options to your own customers in order to create a steady flow of income. Again, the option to avoid a large up-front expense benefits the customer, while monthly payments help you fund your AV projects in a steady and predictable way.
Maximize recurring revenue.
In order to create an ongoing flow of income, make sure you are taking advantage of all potential recurring revenue opportunities. With money coming in every month, you are more likely to make it through the slower periods of the year—and even dips in the overall industry—without experiencing funding delays.
Some recurring revenue opportunities include service and support agreements, content creation contracts—particularly for digital signage installations—and streaming services for video conferencing. Depending on your customer base, you may be able to leverage several of these options at the same time.
Diversify into new verticals.
Solution providers that operate primarily in certain verticals with strict annual budgets, such as education, might benefit from branching out into new areas. Markets such as retail and hospitality are much less impacted by annual budget cycles. Instead, they are freer to add new technology on an as-needed basis. This may help you bolster your business during months that are typically slower in the public sector.
Have you experienced trouble with funding delays? At the time, how did you handle the situation?