CCTV installation: the site is delivered, but the contract brings the money

«We delivered twenty-eight sites last year. Twenty-eight! And in February I had nothing to pay two engineers with and was moving money across from my own card» — that is how Dmytro, who runs a company installing and maintaining CCTV systems, opened the conversation.

Sound familiar? Sites get handed over, the acceptance papers are signed, the sales manager is already negotiating the next warehouse. Then January and February arrive, the phone goes quiet, the crews sit idle, and it turns out the entire year's profit went on surviving two months without installations.

The reason is almost always the same. The company measures itself in sites delivered. But a delivered site is not money earned. It is money from which nobody has yet subtracted a year of warranty callouts, the engineer's commissioning time, and the visits that will arrive in November when a camera at that warehouse stops seeing at night.

In this article we break such a business down into two different units: the site and the service contract. Because these are two businesses with opposite economics, living under one roof and rescuing each other in different months of the year.

The founder's path: from one installer to two crews

Dmytro started on his own: turned up, mounted four cameras, configured them, took the money. The margin was obvious — bought the kit for this, handed it over for that, the difference is yours.

When the first crew appeared, the scheme seemed identical, simply multiplied. When the second arrived, strange things began. More sites, more revenue, and at the end of the year the same amount in the account as the year before.

What irritated him most was that he could not say which site had been worthwhile. A large warehouse with twenty cameras and work at height, and a small office with six — both came out «in the black» in the manager's spreadsheet. Except the crew went back to the warehouse seven times under warranty, and to the office not once.

Why a «delivered site» is not yet money earned

Take a typical site: a warehouse complex, sixteen cameras, a recorder, two drives, cable, housings. The contract is ₴180,000.

The equipment cost ₴112,000. The manager signs off the acceptance and enters ₴68,000 of margin into the spreadsheet. Successful site, the company has earned.

In reality nothing has been earned at that point. The crew has not been counted, the engineer has not yet come to commission the system, and the warranty year is only just beginning.

What the margin on a site is actually made of

Here is that same warehouse, counted honestly.

Forty-two thousand of difference on one site is neither an error nor theft. These are ordinary operating costs that simply nobody attached to a specific warehouse. Multiply by twenty-eight sites a year and you get exactly the sum that is missing every winter when the wages fall due.

The warranty year: the cost that rarely makes it into the quote

Signing the acceptance does not end your work on a site. It starts a twelve-month period during which you are obliged to turn up free of charge.

A camera stops recording at night. The recorder hangs after a voltage spike. The client moved a rack and blocked the view. A drive fails in month eleven. Every such callout is half an engineer's day, fuel, and sometimes a part at your expense.

While that tail sits in general company costs, you cannot see something simple: sites come in «quiet» and «loud» varieties. A quiet office with six cameras may well be more profitable than a large warehouse, because after handover nobody remembers it. But to see that, the warranty callout has to be booked against the site it came from.

The second unit: the service contract

Now look at an entirely different part of the business. Forty sites on paid maintenance at ₴1,200 a month is ₴48,000 every month.

This stream has costs too: the engineer doing the scheduled rounds, ₴18,000; small spare parts, ₴4,500; connectivity and cloud storage, ₴3,500. That leaves ₴22,000 net every month.

The figure looks modest beside a ₴180,000 contract. But it arrives every month and requires no selling.

Why a portfolio of forty sites is worth more than ten new ones

Let us count across a year. The service portfolio delivers ₴264,000 net a year. One new site delivers ₴26,100. In other words, the portfolio equals ten new warehouses every year — except those ten do not have to be found, sold, installed and then revisited under warranty.

And here is what Dmytro understood too late: every delivered site is a potential line in the service portfolio. If you did not sign the maintenance contract at handover, you will most likely never sign it. A year later the client will already have found «some lads who will swap the camera cheaper».

Twenty-eight sites delivered in a year, of which six moved onto maintenance, is not twenty-eight wins. It is twenty-two lost monthly payments.

Seasonality: installation stops, the subscription keeps coming

Installation is a seasonal business. In winter construction halts, the frost will not let you run cable outdoors, client budgets are closed. January and February are almost always empty.

The subscription arrives in those months exactly as it does in June. It is what decides whether the company survives two dead months without the owner moving money across from his own card.

The simple rule Dmytro worked out for himself: the service portfolio has to cover the company's fixed costs in the worst month. Until it does, every winter is paid for out of the summer's profit, and the business is not growing but recovering.

Equipment in the stockroom is your frozen money

To start on site on Monday, the cameras have to be bought on Wednesday. The client pays sixty per cent up front, the rest after handover, three or four weeks later.

Add the «just in case» stock on the shelf: a few cameras, a recorder, reels of cable, power supplies. In a small company that is steadily two to three hundred thousand hryvnia lying there and waiting. It is not an expense, so it appears in no profit report — yet it is exactly what explains why a profitable company asks the bank about an overdraft every month.

What changed once the site and the contract were counted separately

Dmytro started running two separate lines: every site as a project with its full cost and warranty tail, and service as its own stream with its own margin.

Within a quarter three things became visible. First: sites involving work at height delivered half the margin of ordinary ones — and were being sold at the same price per camera. Second: three clients generated half of all warranty callouts, because at the sales stage they had been signed off on cheap equipment «to fit the budget». Third: the manager got nothing for a signed service contract — which is precisely why he did not sign any.

None of these decisions required new clients. They required seeing the site and the contract as two different units.

A few closing tips

• Count site margin after the crew, commissioning and warranty, not the gap between the contract and the equipment invoice.
• Book warranty callouts against the site they came from. Within two quarters you will see which clients and which equipment cost you the most.
• Run service as a separate stream with its own margin. It is the one part of the business that does not depend on the season.
• Pay the manager for a signed service contract, not only for a delivered site.
• Compare the fixed costs of your worst month with the subscription income. The gap is the sum you pull out of summer profit every winter.
• Count the money frozen in stock and in unclosed advances. It is the main reason a profitable company runs out of cash.

Money does not disappear — you simply do not see it

CCTV installation looks like a business with large contracts and a profit that went who knows where. In fact it is two businesses: the project side, which produces the loud numbers and swallows the working capital, and the service side, which produces quiet but monthly money and carries the company through winter.

While both sit in one spreadsheet, you manage neither. The moment the site and the contract become separate units, it becomes visible where the company actually earns — and what to do about it as early as next week.