What is Better than RmR?

By Paul Starkey
Published on: May 31, 2019

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There has been much to do about RmR and rightfully so: recurring service revenue and security revenue are indeed attractive. But what if you could capture recurring monthly profit at an even higher level? Meaning, the ability to get 5 to 10 more points of profit that you have not seen in the last 5 or 10 years?

How valuable would that be?

That’s $50K to $100K per million dollars of Revenue. Repeatable! We find it is clearly there for you. How many new RmR accounts does that equal?

Beyond the “we can’t because”: there are proven strategies and methods for getting it done.

Why aren’t companies doing it?

Because they do not have a handle on one of three things: their project profitability or their labor productivity or their compensation in general. Companies that manage their bidding, their billing and pay structure can yield 20 percent profit or better in the luxury integration space.

OK, to those that say my market is different, my company is unique, and all the “yeah, buts”, we simply have not seen those set of truths. Even those that believe we are bigger therefore we can’t. Bigger should bring economy not dis-economy.

Here is the simple prescription:

  1. Get your counting standardized; seems obvious (many don’t)

  2. Follow a core business process for project tracking (relatively simple)

  3. Re-examine your bidding mix and controls (raise prices)

  4. Drive billing for every hour worked (change habits/policies)

  5. Compensation must follow Gross Margin contribution (no exceptions) (fix#3)

  6. Improve the overall team communication on profit generation and success.

Here is the good news you can do both: RmRevenue and RMProfit.

RmP (Recurring Monthly Profit) is critical to your business, it is right in front of you: grab it!

Keep it Vital!

Paul Starkey

Paul Starkey

Paul Starkey is a 23 year CI industry veteran who led control manufacturer ELAN from infancy to a 150 person company. He is a visionary, keen on innovation, pioneer of on-line training, and numerous product innovations. He is co-founder of Vital Management.

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