The Complex Maze of Business Circumstances

Have you ever been to one of those corn mazes that pop up every October? Usually “themed” sometimes like Jurassic Park, or Disney or many other options, the idea is to start at the beginning, work your way through a maze or labyrinth of passageways and find the center, then the exit. Usually they are designed in such a way that you take several wrong turns, come up against obstacles and dead ends and eventually, by process of elimination, find the “right” path.

Why am I talking about corn mazes in May? Each year when it comes time to write the SDM 100 cover story, I look to the open-ended comments in the annual survey to find the common themes. For the past couple years, the answer has been obvious: it went from COVID-19, to supply chain shortages as the topics that popped up again and again. This year I am happy to report COVID-19 was mentioned only a as challenge that was in the rear-view mirror for almost all of the top security dealers. Supply chain, of course, came up frequently — as did labor shortages, which have been an issue for many years.

No. 27, Security Equipment Inc., which described its Midwest market as “average” noted, “Supply chain issues are killing us. No product for months and then when we do receive product we do not have the manpower to get it installed.”

No 7, Guardian Protection, wrote: “2022 was also a year of ongoing labor and supply chain shortages requiring us to be more accurate with forecasting in all parts of our business. We made significant investments in stock inventory to guarantee we would be able to meet the needs of our customers on time and on schedule.”

But from there it got a little more challenging to “read” the trends.

Where one company might say supply chain issues started easing off half way through 2022, another would say they anticipate feeling impacts through 2023. One company reported a very strong year in fire, but less so in video, and the very next one on the list stated the exact opposite. What was going on?

Searching for a theme that could also be represented visually, my thoughts turned to labyrinths, which Vocabulary.com defines as “a structure with many connected paths or passages in which it is hard to find your way. In figurative use, a labyrinth is a complicated situation….” Labyrinths are often described as a challenge, or puzzle. You feel accomplished when you solve it — which is certainly an apt metaphor for this year’s top 100 security dealers.

While no one has “solved” every issue, the experiences of the SDM 100 companies in 2022, and predictions about 2023, are very much dependent on the labyrinth of individual business and economic circumstances that have impacted them the most — often depending on location, whether they focused more on the residential or commercial space, which vertical markets they catered to, and more.

Collectively, it certainly seems these top security dealers have found the right path to success, with 91 percent of them reporting at least some RMR growth in 2022 and both residential and non-residential sales increasing.

Looking ahead, the economy and inflation loomed large, with several predicting a softening sometime this year. But these companies have walked this path before and are more than prepared to face whatever obstacles come up.

As No. 60, Advanced Security Systems, put it succinctly: “Inflation has made business less profitable as we struggle to hold prices to our customers competitive. We are tightening our belt as we brace for a possible recession. We continue to be optimistic as our industry has weathered ups and downs in the U.S. economy and continued to grow and thrive.”