On the way home from work the other night, I was listening to a program on NPR about a small businessman in the middle of the country. This man was involved in manufacturing, but his main goal was keeping and saving jobs in the United States. He would seek out other small companies that were either about to go out of business due to price competition or were going to start sending their manufacturing oversees, and he would partner with them to manufacture their products – mostly widgets, things like pencil erasers and other small items – in his factory here.
The host mentioned how this must be a fiercely competitive market with not a lot of profit, and the businessman said something very profound: “A hundred pennies make a dollar.” It wasn’t about trying to make all the money on one job, or even one client, but rather to build his business one small job at a time, with each job adding to the bottom line.
This struck me as interesting, and something that we can apply to our custom install businesses.
I know that, for many of us, the dream job is landing that massive seven-figure project, or getting some huge project (or projects) that will take us through the entire year or more. Beyond that one massive whale of a client, we all aspire to those six-figure jobs, or barring that, the high five-figure ones.
But you never hear about anyone talking about those meat-and-potatoes projects that actually get the majority of small, four-to-six-man companies that make up the majority of this industry through the year.
The man’s comment got me thinking, because I realized just how true this is for our business, and, honestly, just how nice those small projects usually are. And I say this from having been involved in a mega-job that cost north of $500,000, as well as being involved with multiple $100,000-plus jobs in my 20 years of doing this.
And, sure, don’t get me wrong – those jobs can be a lot of fun. Working with a more open-ended budget allows you to use cooler gear and push the boundaries of what you can accomplish on a typical project, and they offer a massive sense of, “Wow. Look what we did!” at the end.
But those jobs also come with a lifetime of headaches and commitments. It is no understatement to say these clients own you for years following the job. They call, you jump. To this day, when I see the name of my mega-job’s houseman pop up on my phone – approaching five years later – my stomach still drops.
The truth is, no matter how great a system you install, or how well you set expectations, or how well you service and support these projects, or how well you think the system is performing, these massive jobs own you in a way that no other projects do. Keep in mind that the person capable of spending nearly a million on audio/video gear could also decide to sue you on a whim for any sleight real or imagined. Sure, you might win, but the cost of doing so might put you out of business.
On the other hand, think of those “100 pennies” jobs; the ones that fill out work calendars day-in-and-out. Those small jobs like hanging flat panel TVs, installing a streaming device, fixing some network issue, installing a new receiver, or reprogramming a remote. Sure, none of us are going to get rich on a single one of these jobs, but they are all quick, come with a clear scope of expectation, finish in hours, and generally pay in short order. Plus, these are often the clients that call us back, year after year, to maintain some small issue. Happy to have us available to fix their problem, and even happier to pay us to do so.
And I bet no one reading this has spent even a single sleepless minute worrying about someone calling to complain about a TV mount or remote reprogramming.
I’m not suggesting our industry abandon the big jobs by any means. And, when managed well, these jobs are quite thrilling to be a part of, not to mention profitable. But sometimes it’s important to have some perspective, and remember that while all those little jobs might not be as glamourous, they add up to dollars that contribute to the bottom line just as well.
