The benefits of adding an electrician to the staff of a custom installation business are many, including an additional revenue stream and early and frequent access to builders and architects, as well as having the necessary expertise to gain full control over lighting fixtures and smart power management devices. Those are all reasons enough to give it careful consideration, though anything that worthwhile comes with caveats.
Steve Elliston, owner of Dallas, Texas-based Elliston Systems & Design, saw the opportunities five years ago and added an electrician to his staff, although his original thought was to purchase a local electrical business. “I hired a broker and we made offers, but none of them were accepted,” he says. “They were all family-owned, and I don’t think there was any interest in selling.”
When acquiring an electrical company didn’t work out, Elliston decided to build his electrical business the same way he had built his custom design business — from scratch.
“We found an electrician out of Colorado who wanted to move to Texas,” he says. “We talked and met online, then flew him out here, and now he heads up our electrical division. It is a key role for us — some businesses hire an electrician and just use their license, but I wanted it to be all in-house. His office is close to my lead designer’s office, and they’re always talking about electrical and how it relates to low-voltage, panel reports, dedicated circuits, and so on. They’re constantly collaborating, and it makes you wonder how we grew without it before.”
Looking back, Elliston feels it may have been fortunate that he could not find an electrical firm to sell to him, even though it would have come with its own clients. “You could certainly get things moving quicker if you acquired a company, but then there are questions such as, ‘Will those electricians follow your beliefs?’ and, ‘Do they want a new boss?’ Acquisitions like that can be good and bad, but often create additional stress on a business.”
Growing the business from scratch worked out well for Elliston, who now has seven electricians on staff, and anticipates a team of twelve by end of year.
Finding the right electrician to fit his business was just the beginning. The next challenge was to find clients and builders who were willing to let the integration company take over their electrical needs. That, and keeping the new guy busy while waiting for high-voltage work to come in.
“He spent a lot of time in the field doing physical work like pre-wiring while I was busy promoting our new division,” says Elliston. “Fortunately, early on we came across a fairly large remodel that had an old Lutron system and the builder gave us a shot, figuring that our guy was more than qualified to handle it. We upgraded that system to Homeworks and wired all the electrical in. It was his first experience with Lutron lighting control, and it turned out great.”
The company, which is a Lutron Diamond Dealer, was selling Lutron products before the new division started, but now that they are able to handle the electrical side as well, their partnership with Lutron has grown, as they now spec the product in for all outlets, switches, Ketra lighting, and shades. “They really are a key partner for us as we’ve expanded,” says Elliston. “Not only do they offer rock-solid products, but they also help support our training and marketing efforts as we work to educate the architects, designers, builders, and consumers in our local area.”
Meanwhile, Elliston was busy promoting the company’s new division. “I used that first project as an example, and that slowly started leading to more projects,” he says. “Now we typically have ten large jobs on the board at any given time, and we have two big builders here in Dallas that use us consistently for both integration and electrical.”
Benefits for Builders and Clients
Elliston is no stranger to working with electricians, so he knew what his company could bring to the table that a typical electrical company couldn’t. “After 18 years in the business, we were tired of the unprofessionalism between the electrical firms and us with regard to documentation deliverables,” he explains. “We were getting panel reports handed to us on a piece of cardboard!
“A builder typically gets a one- or two-page document from an electrical firm and it’s going to say, for example, 50 receptacles, 10 fans, and 100 lights… We present our high-voltage proposals just like we do our low-voltage work, so clients and builders are getting a 30-page document for the electrical with every receptacle, light fixture, and anything that’s going in the room detailed out just like low voltage. The other trades aren’t used to seeing everything broken out in such detail, so it’s been a powerful tool with them, as well as winning over clients.”
On top of the professional presentations, there are considerable cost savings when using one company for high- and low-voltage. “With the electrical firms here in Texas, if there is going to be a lighting control system on the project, they know they’re going to have to put some time into the project to deal with the integrator and they’ll slap a $10,000 fee on top of their bill,” explains Elliston. “I understand there should be a fee associated with that, but we’re able to say, ‘This is all in-house, so we’re likely going to save you money and streamline the process if you use us for electrical.’ So, there is cost savings for the client, and everything runs smoother.
“Plus, there are fewer cooks in the kitchen, and the builder loves that. The homeowner likes it too because, when a home is complete, the only people left around are the integrator and the landscaper — everyone else has moved on to another project. We are continually here for both high-voltage and low-voltage work. It’s comforting for the client and removes finger-pointing between trades.”
Tips for Adding an Electrician
For those looking to add an electrician to their CI business, Elliston shares some of what he learned as he created and built up that side of his business.
Custom Integration Is Attractive to Electricians: Working for a custom integrator holds many advantages that an electrician is typically not used to, including regular hours and weekends off. “At his yearly review, my journeyman said that he has never had so much time to spend with his daughter,” says Elliston. “That meant a lot to me. To hear someone is paid more, which they deserve, get more time off, and are happier means everything to me. If I can keep that going, any problems with scaling staffing are going to be resolved quickly.”
Less Margin With Much More Product: Lighting fixtures do not have as much margin as the more complex electronics integrators are used to working with, but with the large volume of fixtures in a house, you will still make a profit. “A lot of people are afraid to get in this business because the margins are lower,” adds Elliston. “But many homeowners are realizing the benefits of premium LED fixtures and smart lighting like Ketra, which differentiate us from the basic 4- and 5-inch recessed can lights most electricians are offering.”
Meet Your New Inventory: Speaking of large volume, dealers taking this on will have to store much more product than they are used to. “Before this, I was never familiar with all the different types of conduits and wire,” says Elliston. “Luckily, we have a large warehouse, as I’ve got more copper than I’ve ever seen before — big reels of it. Light fixtures are coming in by the palett,e and you have to make sure they haven’t been damaged, so a solid receiving process is key.”
Everyone Becomes an Electrician: Elliston explains, “My master electrician has his license with the state of Texas, and we had all of our low-voltage guys become apprentices, so they have the ability to put in or raise a plug and not get in trouble with the inspector. Even with that, the integration team is not dealing with breaker boxes, but get to learn a new skill that can benefit their future.”
Run Your Integration and Electrical Divisions Together…: Communication between the electrical and integration divisions is key to ensure that projects are completed on-time and with high-quality — and to make sure the company is taking full advantage of having both groups on staff. “The entire company meets on Thursdays to go through every project,” says Elliston. “By reviewing all the projects together, everyone in the company knows what’s going on with every one of our projects. If help is needed from one division to another, this is where it gets brought up, so we can solve client needs faster than we could in the past, because there are no egos, just quick solutions.”
…But Also Keep Them Separate: Even if they are part of the same business, keep track of the divisions separately so you can manage the ups and downs of each. “I didn’t put this under two different companies — it’s still Elliston Systems — and each division has its key indicators to watch. We have had a great 22-year track record with low-voltage, and we’ve got to keep our eyes on the high-voltage side to make sure that reputation remains strong, and business grows healthily.”
Ultimately, Elliston believes the success of the electrical business lies with the person who is hired to run the electrical division. Once you find the right person, then he or she needs to be trained in the way of the custom integrator.
Related: Why Aren’t You Selling Lighting Yet?
“There’s a book called Raving Fans by Ken Blanchard and Sheldon Bowles, and everyone in our company has read it,” concludes Elliston. “Electricians typically think about getting the job done and moving on to the next project, and that’s not what we do. One of the challenges is molding the high-end integrator mindset into the electrical team, as well as new AV hires. This is not a race to finish with the client, we want them to be raving fans for years to come! That’s how we have been successful in the low-voltage side and that’s how we are going to be successful in the high-voltage side, as well, while attracting more trades that want to do business with a company that is trying to make things easier for them.”
Elliston’s Power Play
Adding electricians to its staff has allowed Elliston Systems & Design to up its power conditioning and management capabilities, with the firm recently picking up Torus and RoseWater Energy as vendors. As a Texas-based integrator, where power issues have been well-documented, the company is seeing success despite the high cost of the product.
“It is about $120,000 for the system,” explains Steve Elliston, owner of Elliston Systems & Design. “That’s a difficult sale if you’re not passionate about power. Thanks to our electrical division, I’m starting to learn the importance of our components always getting 120 volts, 60 Hertz. Here in Dallas, the power company guarantees 120 volts with a 10 percent margin up or down. Our components aren’t made to go up and down 10 percent. Plus, we have brownouts, and I would say 90 percent of our service calls are power-related, so having quality solutions for our clients, even if the power is out, differentiates us from our electrical competition who isn’t generally thinking about how to protect the expensive electronics in the home, or how to avoid the impact an outage can have on the homeowner’s work, entertainment, and safety.
“Now we can tell clients we’re going to do dedicated runs for all their televisions, tying them into the main rack to avoid any ground-loop hums. We’re going to make sure the router and other mission-critical components are not tied into an outlet that’s shared with the vacuum cleaner, creating additional noise and disruption. We are taking the design approach that we’ve done all these years and applying it to the power infrastructure, which is key because, if you don’t do that, you’re likely going to have problems down the road.
“Having the ability to control how things are powered is making our systems more reliable and less troublesome for the client, while also reducing truck rolls and service calls for our teams.”