Category Archives: Steve McCurdy

In the Thick of It: Pros and Cons of Bid Work

As we continue our discussion on negotiated work versus bid work, we see that both approaches can help establish and grow a fire alarm business. The trick is finding what works for your company, depending on the industry and your career.

Here, we’ll dive a bit deeper into the pros and cons of bid work and discuss a few ways you can secure more contracts for your own company.

Pros and Cons
One of the biggest pros associated with bid work is that it can be very profitable—if you play your cards right. To succeed in the bid market, you need to make the most of the time it takes to prepare each bid. If you have a very skilled estimating and project management team, you become very knowledgeable about the costs associated with each bid, as well as how to structure them to streamline the process while still putting forth a competitive bid.

Another positive aspect of the bid market is that it can help new dealers establish their business, form professional relationships and prove the quality of their work—all of which can help lead to additional jobs in the future.

As for cons facing the bid market, perhaps the biggest one is a high number of competitors. Especially in the public sector, your company could be bidding against hundreds of others, which lowers your bid success rate. If you bid 100 jobs, you might win contracts for three. You have to ask yourself: Are we getting enough wins to make the bid process worthwhile?

The bid market is also more likely to experience slow periods, as many of these projects are linked closely to the strength of the construction industry. Finally, projects that bring in a lot of bids are more likely to be decided based on a dealer’s price—which is not always in the case with negotiated work.

Find More Bid Work
The most successful dealers realize that bid work is a time investment, both up front and throughout the bid process itself.

To find more bid work, it helps to get out there in the industry. Become a fixture in your local market: join industry associations, reach out to architects and engineers, and foster those relationships. You’ll not only get your company’s name noticed; you’ll also be among the first to hear about new opportunities, local projects that didn’t go quite right, new trends and more. Over time, you’ll become familiar with local codes and requirements and even the expectations of area inspectors. Doing this type of legwork up front will pay off when it comes time to bid on new projects.

Some dealers experience frustration when they lose bids solely based on price. In these cases, developing at least some level of relationship with the general contractor or owner can help you to distinguish yourself. And always pay attention to the areas in which you tend to win the most work. Sometimes, it pays to stick with what you know.

Finally, know your limitations. Resist the urge to go after all the high-profile projects, like the new city hall or refurbishing a historical building. These types of jobs can use up a lot of your resources in the bid process alone. Instead, find what works for you, and stick to it—even if it’s something like office buildings and apartments.

In this business, self-awareness is critical. Know your strengths and opportunities, define success on your terms, and stick with it.

 

 About the Author
Steve McCurdy is Director of Business Development at Fire-Lite Alarms by Honeywell.​

Hello? Your Customer’s Building is Calling

Many electrical contractors speak of the glory days when new construction was booming and there was plenty of work to go around. Those of us who have been in this industry for a while know there is always a cyclical nature to the construction industry. The key to riding through these ebbs and flows lies in finding ways to produce continuous growth and, at the same time, closely manage your monthly cash flow.

During a new construction project, once all systems are inspected and turned over to the owner, the electrical contractor’s minimum responsibilities are to warranty the installation for the next 12 months. In the meantime, they start hunting for a new project. But what happens to the building’s systems going forward? If you’re not offering ongoing testing and inspection services, you’re leaving a lot of money on the table.

Our Unique Industry
The fire alarm market may not be exactly “inflation-proof,” but it does lead the industry with multiple ways to offer growth. The fire alarm field even offers a healthy profit margin in the face of a slow construction cycle.

Our industry is also the most proactive in ensuring that systems are maintained and operating at peak performance, well in advance of a breakdown. Various legislation and codes, including NFPA 72, ensure that all systems are monitored, inspected and tested on a regular basis. Again, this is not an option on the part of the owner: It’s the law.

The Key to Continual Profits
For all fire alarm customers, testing and inspection is required annually, quarterly or even monthly – depending on the use of the facility and the local ordinances. Can you think of another system that requires the contractor to come back to the building periodically to ensure equipment performance? For an electrical contractor, no other system reaches out and says, “Come fix me.” The owner is required to invest in that recurring service.

As a well-qualified electrical professional, you have an opportunity to earn significant income by providing testing and inspection services to your existing customers. Plus, you can earn a wealth of other opportunities from these visits. This ongoing relationship is a true collaborative effort between you and your customer, leading to a stronger, more constant customer base.

Additional Sources of Revenue
Not only are you paid for testing and inspection visits; each one could potentially lead to additional work. For example, as you arrive for your fire alarm inspection, you notice that the parking lot lights are on at 10 am. Being well versed in energy efficient lighting, you could take this opportunity to tell your customer about the savings and rebates available for LED lighting. Have you discussed back-up generators with them? Do they need any repairs done while you’re there? The opportunities are everywhere.

Fire alarm monitoring service offers another potential source of revenue for electrical contractors. Most commercial fire alarm systems in the U.S. are required to be monitored 24 hours a day. They are connected either by traditional telephone lines, IP or cellular. Monitoring service is typically provided by the installing contractor, who simply sub-contracts to a third party (a UL-listed monitoring company) and then charges the building owner appropriately. These fees can typically be $35 to $75 per month and offer a 50 to 80 percent margin. Since this is an automatic service, if a device in the building is not responding, who do they call? You.

As you can see, the opportunities for recurring revenue are there. So, the next time you’re talking about the good old days of non-stop construction and you have several employees doing busy work in the shop, remember this: Your customer’s building is calling. Is there anyone home?

About the Author
Steve McCurdy is Director of Business Development at Fire-Lite Alarms by Honeywell.​

 

Jumping Into a New Market: What Role Do Electrical Contractors Play in Life Safety?

The fire alarm industry is a dynamic one, constantly changing and evolving as new technology is introduced, additional legislation is passed and unique challenges emerge.

As Dave Pakech discussed in a recent blog, one big change has arrived in the form of electrical contractors who are entering the fire alarm market in growing numbers. Many electrical contractors have already seen the benefits of incorporating fire alarms into their business model, while others remain hesitant. For those who haven’t yet jumped into this new market, now is the time to consider it — and to ask yourself an important question: What role do I play in life safety?

In any new construction, an electrical contractor must be involved in the installation of power distribution, lighting, data communications and fire alarm equipment. By fully embracing the fire alarm aspect of the job, you open a wealth of new opportunities for cost savings and recurring revenue. On top of that, you’ll know that you’re doing important work by ensuring each building meets high life safety standards, now and for years to come.

Let’s take a closer look at an electrical contractor’s role in life safety. The way I see it, you can choose from four different levels of involvement in the fire alarm market:

  • Offer no fire alarm bid at all. This is a very small group these days. Most electrical contractors can’t walk away from the responsibility of ensuring, one way or another, that the fire alarm is installed and working properly.
  • Carry a sub-contractor to bid on the project. Here, the electrical contractor partners with a subcontractor to complete the entire fire alarm portion of the install. In this “smarts and parts” set-up, the subcontractor buys any necessary materials.
  • Bid on a portion of the job yourself. In this case, the electrical contractor bids on one or several aspects of the job, for example, installation of the fire alarm control panel, devices and wiring only. Here, the fire alarm distributor provides the materials, and a third-party subcontractor is used for submittals, programming and testing of the system.
  • Bid on the installation of the entire fire alarm system. A growing number of contractors are bidding on entire installations, including submittals, the control panel, peripheral devices, backboxes, terminations, programming, the final test and anything else the project requires. In this case, the fire alarm distributor provides the materials.

Not surprisingly, a growing number of electrical contractors are opting to take care of the entire fire alarm system install. For those willing to invest the time and effort needed to learn this part of the business, adding fire alarms to their service offering helps grow profit margins, now and in the future. I urge you to not overlook the more profitable parts of the business. Consider the savings you could enjoy by not hiring a subcontractor and taking the job from wiring through programming and testing to completion. In addition, electrical contractors who provide fire alarm services also stand to create recurring revenue in existing buildings and through fire alarm monitoring opportunities.

In the electrical contractor world, it’s time to rethink the fire alarm side of the business. This is your chance to create a new revenue stream and diversify your skillset at the same time. There will always be demand for fire alarm systems, because they ensure the well being of the people in a building. So, now is the time to ask yourself: What role do I play in life safety?

For more information, stay tuned for my upcoming blog posts on fire alarm training programs and recurring revenue opportunities.

 

About the Author:
Steve McCurdy is Director of Business Development at Fire-Lite Alarms by Honeywell.​