Flying High Without Falling Down - ResidentialSystems.com

Flying High Without Falling Down

Deciding When and When Not to Take on Prestigious Projects
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Its the stuff of dreams: a potential customer calls out of the blue and offers you the opportunity to install a system that will not only challenge your technological prowess, but will elevate your status within the custom installation community. Who wouldnt want to raise the profile of their business by aligning with the rich and famous?

It shows the capabilities of your company to handle a job like that, said Jill Kent, manager of the Greenwich, Connecticut arm of Audio Video Systems Inc. You might want to do it to show off that you are really good. It also generates interest in your company, and furthers your business by giving you opportunities to do these high-profile jobs.

Kentand others already working in this realmhowever, warns against making any hasty decisions. While on the surface, the pros to accepting high-profile projects might seem to outweigh the cons, there are a number of factors that must be in place.

You need to have an incredible project manager that has the strength to liaison between the client, the clients reps, and all of the other trades, Kent declared. Its not just about putting in a plasma and a surround sound system. These jobs depend on your project managers and your team.

Business processes must also operate like the proverbial well-oiled machine to avoid cash flow and resource-related headaches. You need to know how to run your company and have it organized properly so that your jobs overlap in order to have constant cash flow. If you have all jobs starting at the same time, that would be poor business management, Kent declared. If the timing of the project is so bad for you, sometimes that may lead to the fact that you cant take it at that moment. Perhaps, the client wouldnt mind, if you are that good, waiting several months. If you take on too many big projects like that at one time, you can get yourself into trouble.

High-profile jobs can put a strain on an unprepared installation company, said Bill Anderson, president of Genesis Audio & Video Inc. in Irvine, California. You have to be sure that prior to committing to the project that your company has the resources to complete and support the project 100 percent. You also must have strong sales support in place to handle the installation and the service of a project that large. They require more attention to detail and a greater use of corporate resources because their expectations are higher.

Installers must also remember that the more of those resources they dedicate to their prestigious projects, the less they have to contribute to the more meat and potatoes portion of their roster. When you channel all of those resources in that direction, you have less time to do the nominal jobs that fall anywhere between $20,000 to $100,000, Anderson said. It takes your existing corporate structure and shifts the focus over to the higher profile job.

While the numbers associated with high-profile projects can be impressive, Anderson also points out that, in the beginning, they may not reap the enormous profits one would think. When you are learning how to deal with high-profile jobs, they dont necessarily yield the same profit, he said. When you become accustomed to dealing with them, they will.

Murray Kunis, president of Future Homes in Los Angeles, California, classifies high-profile projects into two categories: One is that the job is high profile because of the clientwho the person is. The other is that its high profile because of the scope of the job, he defined.

Presumably thanks to its geographic location, Kuniss firm has been dealing with the former for more than 15 years. The jobs importance and the attention to detail can be disproportionate to the size of the job. If Dr. Schwartz calls up and asks for a $50,000 system, the odds are that we probably wont take that project on. There is only so much time in the day, and our resources are not best served by that situation. Where is this going to lead? Dr. Smith and Dr. Jones are also going to want $50,000 systems. That is not really our business model, he illustrated.

However, if a well-known personality approaches the company for even a small installation, its worth Kunis while to ink the deal. When Charlize Theron wants a $50,000 system, we are glad to do it because of the exposure a job like that can bring us, not only through her own network of friends that will probably spend a lot more than $50,000, but because of the notoriety and reputation that such a job would carry with it, he said.

For Future Home, this strategy makes sensethe company is firmly rooted in the upper echelon of the custom installation business. For those breaking into this market, however, there are a number of factors to consider; chiefly, maintaining a positive reputation. This could happen: you take the $500,000 job after 100 fabulous $50,000 jobs, and the bigger job goes south on you because you are not ready for it. That is what you are going to be known for, Kunis said. The fact that you did those 100 $50,000 jobs well, that is not going to be the buzz that goes around. You can then forget about ever getting the $50,000 jobs again.

The secret, Kent said, is setting reasonable expectations for both your company and the clientand then achieving more than what was originally decided upon. When you promise a customer something, you must keep your word, she said. You also want to set realistic expectations, and then exceed them. The best part about high-profile jobs is that you get referrals. You will only get them if you do a great job and you exceed all of their expectations.

One of the most important things to remember about high-profile projects is relatively common sense: the scope of work is broader than smaller projects. The thing about a job that is four times bigger than anything that you have ever done before is that it requires 16 times more work, Kunis said. The details magnify, the scope of interaction magnifies. You are going to be dealing with many other trades. The houses that are involved feature lots of architectural details.

If you are not sure you can deliver what the client is asking for, its better to refer it to an organization that can. If you take on a high-profile job, its a double-edged sword, Kunis said. Make sure you are ready for it. Otherwise, you are almost better referring it to someone else or getting a commission or finders fee on it, or being associated with it as a consultant. That would be a very good way to get to the next level without biting off more than you can chew.

For some custom installation firms, its tempting to subcontract what they may not be able to deliver in-house. Kunis cautions against this approach. What some companies do is the install, but then they will subcontract out the automation. It looks great on paper, but you cant service the job, you cant update things as quickly as people would like, he said. On the back end of the dealand you wont know this until the end of the job when everything is almost finished and you are trying to collect your last paymentthings wont get done as quickly as you like because you are dependent on companies that are outside of your control. Be very careful going down that road.

Ultimately, high-profile jobs are ordered by high-profile clientswhether or not they may be movie stars. Because of the amount of money they spend, this type of customer is accustomed to receiving the attention that they rightly deserve, and companies must be prepared to dole it out. Understand that the client is going to either assume that they are your only client, or, if they know that you are a smaller company, they are going to know that they are your biggest customer, Kunis advised. If you are a smaller company trying to step up another level to take on bigger jobs, and the client knows thiswhether you tell him or notthey are going to run you ragged because they are going to know how dependent you are on them. Be prepared for that and budget that accordingly.

Carolyn Heinze (carolyn@carolynheinze.com) is a freelance writer/editor.

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