What Is the Importance of Revenue vs Profitability for Integrators? Statistics

By: IPVM Team, Published on Mar 01, 2019

A company can be highly profitable but if it is small, they will still not make much money. By contrast, a company can generate lots revenue, but if they have no profits, they do not 'take home' any money.

Whereas startup manufacturers and developers typically raise external funding and absorb losses for many years, focusing on revenue growth, many, if not most, integrators do not.

New IPVM statistics, based on a study of 100+ integrators showing integrators divided about what to prioritize as the chart below shows:

revenue vs profitability

Inside this note, we share the main reasons and dozens of integrator comments to better explain the tension between profits and revenues and why so many integrators focus more on profits.

* ******* *** ** highly ********** *** ** it ** *****, **** will ***** *** **** much *****. ** ********, a ******* *** ******** lots *******, *** ** they **** ** *******, they ** *** '**** home' *** *****.

******* ******* ************* *** developers ********* ***** ******** funding *** ****** ****** *** many *****, ******** ** revenue ******, ****, ** not ****, *********** ** not.

*** **** **********, ***** on * ***** ** 100+ *********** ******* *********** divided ***** **** ** prioritize ** *** ***** below *****:

revenue vs profitability

****** **** ****, ** share *** **** ******* and ****** ** ********** comments ** ****** ******* the ******* ******* ******* and ******** *** *** so **** *********** ***** more ** *******.

[***************]

****************

*******, *********** ****** **** of * ******** ** risk ******** *** ***** conservative ** *** **** grow ** * ******** of *********** *** **** more ******* *** ********* that ******* ******* ***** provide ******* ********.

Conservative / **** *******

** *** ********** ******** below *********, ******** ***** going *** ** ******** if ************* *** *** the ***** **** ***********:

  • "****** ** **** ********* than ****** **** *** growth's ****. * ************ profitable ******** ****remain ***** long into the future. A company focused only on revenue growth may not have a solid base from which to generate profit."
  • "*************. *** **** ****** the ***** ** *** bank ** ****** ********* are **** ****** ***no *** ***** ***** ***."
  • "** **** *** ******** revenue ** *** **** of ************* *.*. ** selling ***** ** **** will *** **** ******* our ***** ***risks *** *******'* ******."
  • "******* ************* ****** ****** all *** ***** ***. Think ******** ******* ** a ******** ****.Chicken **** **** *** ***. Busy but poor?"
  • "* *** ** ***** to *** **** *** shovel. ******* ******* ** the ******* ** ************* creates *downward ****** that is very difficult to get out of without incurring massive pain. If you're not profitable at a smaller size, you will still not be profitable at a larger size."
  • "************* ** *** ***. Lots ** ********* **** big *******go *** ** ******** because they are insufficiently profitable"
  • "************* ** *** **** important ******* ***** ******* with ** ******puts ********* *** ** ********."
  • "* ***** ****** ******** profitability - ******* ******* comes **** *** *** set **issues *** *********."
  • "*************. ******* ** ***** unless *** ***can't *** **** *****"
  • "*** ******* *** ** make * ******to **** ****."
  • "************* ***'* ***** ***.Who ***** *** **** ******* you bring in if most of it goes out again on costs."
  • "* ******* ********** *** profitability ** **** ********* & ********** *** ********* situation ** *** ******* asrevenue **** *** ******* **."
  • "******* ** *********** ** you ***not ****** *****. We focus on profitability."

Scalability / ****-****

** ********, * ******** of *********** ********** **** by ******** ** ******* revenue *** ******* ****** that, ** *** **** term, *** ******* ***** be **** **********:

  • "******* ******* ** ****** then ********** *************. **** a ******* ***more ****** *** *** **** ****** ***** * *****. maximizing profit is not the work you should do."
  • "******* ******* ********* ********** agrowing ******** **** whereas maximizing profitability may reflect budgetary events that maximize profitability on a short **** ***** ****."
  • "******* ******* *** **** important **** ********** *************. Becausewhen *** ****, **** ******** **** ***** that leads to profitability."
  • "******* ******* ** ******** in ** ******* ********** in *** ****** *** - ****** *** ****** and ********* *** ********. It **critical ** ******* ****** ***** and bring added options to existing customers."
  • "******* ******* ******* ********** business ***realize ******* ********* much more rapidly than 5 or 6 points off a price quote or as some companies do by submitting un-neccesary change orders etc. Effort spent on new business and Bus Dev is key and should be any legitimate companies main focus."
  • "******* ** **** **** important ** ***** *** the ********* **** ****keep ****** **** for smaller jobs."
  • "******* ******* ** **** profitablein *** **** ***. If we can gain sales upfront we can continue to do service and get better pricing on equipment as we buy more."
  • "******* ******* ** **** of *** ***** ** short-term ************* ** * single ***. **-***** ******* is *********** ***** ******/**** on * ****** *** is *one-shot ****."
  • "******* ******* ** ***. I *** ** ** quantity **** *******, *** more ** ****, *** more ** *** ******over ****. Plus we make a lot of money on the back end with SLA's so the more installs we get in the more RMR we can collect."
  • "******* ******* **build *** ******** **** and then maximizing profitability with no cost referrals to reduce marketing and sales costs."

Privately ****** ** ******** *******

** * *** *********** mentioned, *** ** *****, one ********* *************** ******* integrators ** ***** ****** to *******. ** **** integrator *****:

** *** *** * small ********* **** ********, the ***** ** ** taking **** ** *** client ** *** ******* mission. ** *** ** this *** ********** ***** business *******, **** *** will ******** *************. *** larger ** ** ****** firms, ******* ****** ** more *********.

***** **** *********** *** not **** ******* *** closely **** ** *** owners **** ******* ****** to ******** *******, *** much ** ** ******** on ******* ****** *** put *** ******* *** of ********. *** * well-funded *******, ***** ***** loss *** ** ******** in *** ************ ** future ****** ** ******* and *******, *** *** a ******* ******* **** access, **** ****** *** mean ******** **** *** entire *******.

Questions ** *****

** **** **********, ***** (*.*., getting ***) ** *********. Manufacturing *** ****** ********** are **** ********. **** manufacturing *** **** ******* costs *** **** ****** businesses *** **** *****, both ****** ****** ********* with ****** **** ********** and ******** ******* ** pricing **** ******* ******.

**** ***********, **** ** less ******* **. *********** is ***** ********* * physical **-**** ********. *** best ********** ** ***** is ********** ** ***** in ********** ****** *** Paris ********** ****** * local ****** *** **** in **********. ********, *********** are ***** ***** **********. Installing ** ********* **** new ******** ******** *** technicians, **** ******* ******* to ***** ***** *********.

******, ***** *** ** some ************ ** ********* problems, *** ****** *********** get. *** *******, ***** integration ** ** ***** and ******* ********* (*.*., supporting ******** *** *****), integrators **** *** *** large, ***** ****** **** personal *** **** ********** than ******* *********** ***** individual ********* *** ********** more ********* ** *** success ** ***** ********.

** ******* ***** ** these ****** ** **********, ***** ******* ********* ** ****** ** * ******* dollar **** *********** ** a ******* ****** ****. ** ********** ********** succeeds ** ***** ******** to ** * $*+ billion ****** *******, ** could ******* *** ******** and ***** **** ************ integrators *** **** **** taken *** ***** ***** but **** **** ***** fail ** *** **** of **********'* *****. ** the *******, **** ****-****** ones ***** ***** *****. 

Comments (4)

*** **** ********* *********** I've **** *** ********* first. ****** *********** ***** from **** *** ********* and ****** ********. ****** organically ***** **** **** via *********** **********. * see ** *** *** time, ** **** ** someone *********** ****** **** customer ********** (****** ************* labor *** *****, ***** a ***-******* ***-**** *******, etc), **** *** ******* for * ***** *** end ** ****** *** war. 

"*** * ****-****** *******, short ***** **** *** be ******** ** *** anticipation ** ****** ****** in ******* *** *******, but *** * ******* without **** ******, **** losses *** **** ******** down *** ****** *******"..............** true

**** ** ****** **** says ********* *** ** know.... *** ** ** integrator *** ****** ******* are ***** ** ***** with.......that ** *** ************* and **** **** *** king *** **.............

*** *** ** *** once **** '*** *********** business ** *** * high ****** ********"......** ** integrator *'* ****** ** figure *** *** ** change ****........    

****** ***** ** *********** company *** **+ ***** I ***** ******** **** integration ** * *** margin ********. * **** an ******* ****** ****** of **** **% ** any ******* ** ***** I ****. * **** on *** ******** *** large ********** ******** *** have ** ******* ******* the ******* * **** to **** *****. *********, what's *** *****? * sell **** ******* ******* and ****** ******* *** find **** ********* *** willing ** *** *** the ********** *** **********. Trying ** ******* ** price ** ********* *** I ******** **** ** I ****'* **** ********* with **** ******* **** it ****'* **** ***** to ******* ****. 

** *** ******* * was ******** ** *** profit........for ******* ** **** in ****** ***** * have *** ** ***** 10% *** ****** ** revenue ** ** ***** year...........the ***** ****** ******* before ******** *** ********* expenses *** ******* ** yours

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