These days, electrical contractors are moving downstream, getting more involved in low-voltage systems work. The trend makes sense, especially as such systems become more integrated with higher voltage systems. Businesses that specialize in low-voltage work cannot make the same transition because they cannot work with those higher voltage systems.
The results of an independent ELECTRICAL CONTRACTOR examination are revealing. Renaissance Research & Consulting’s March 2011 study, “How Electrical Contractors Perform Low-Voltage Work and the Roles That It Plays in Their Business,” found that virtually all (96 percent) electrical contractors performed some type of low-voltage work in 2009. In more detail, 90 percent performed low-voltage lighting work (controls and/or ballasts), 74 percent performed automation/control systems work (commercial/industrial/institutional (CII), residential or both), 62 percent performed communication systems/connectivity work, and 41 percent performed systems integration and/or data or telecom centers work.
The report notes that: “Given the high percentages performing the various types of low-voltage work, it is not surprising that there is high cross-participation. That is, most electrical contractors work on more than one of the low-voltage categories.” Specifically, 30 percent worked in all of the four low-voltage categories that the study identified, 30 percent worked in three of the four categories, 25 percent worked in two of the four categories, and only 13 percent worked in a single category, which was almost always low-voltage lighting.
The study also found that there appeared to be three distinct groups of electrical contractors that work on low-voltage projects.
One group is contractors that work on residential automation. Those that work only on residential (but not CII) automation tend to be smaller companies (firms with one to nine employees and annual revenues below $1 million).
A second group is electrical contractors that tend to perform a lot of low-voltage lighting work (ballasts and/or controls). It tends to be representative of the total sample in terms of size (small, medium and large firms), and they are more likely to work in a single state.
A third group is electrical contractors that tend to specialize in communication systems/connectivity and/or CII automation and/or systems integration or data/telecom centers. These companies tend to be larger and are more likely to work in two or more states.
The report also noted that, given the high degree of cross-participation, electrical contracting firms that performed low-voltage work in 2009 shared certain characteristics. For example, they were more likely than the total sample to work on a design/build or design/assist basis, report revenue from projects involving green or sustainable building projects, work on new and/or modernization/retrofit projects and on some aspect of maintenance/service or repair, work on nonbuilding projects, and work on power quality projects and/or radiant and/or electrical heat and/or preassembly/prefabrication of electrical components.
With this new column, we will expand coverage of low-voltage systems to include external communications/data; fire, life safety and nurse call; building automation; security systems (including closed-circuit television and access control); cable TV; home automation and networking; and sound (including public address, intercom and paging). Specifically, the column will focus on identifying ways you can start and/or grow your low-voltage business. For example, what kind of business model would make the most sense for you? Some contractors use their own employees to handle low-voltage projects, while others set up separate divisions in their businesses for this work. Still others may actually acquire low-voltage integration companies or so-called “systems integrators” and run them as separate divisions.
The column also will examine the best ways to market your low-voltage business, such as advertising campaigns, encouraging word of mouth, and using your own employees to promote the business. It will examine how to initiate communication with prospects and customers in order to show them the benefits of working with your company in this area. It also will assess the importance of securing maintenance contracts and how to succeed in this area.
Over the coming months, I will be contacting electrical contractors who are involved in low-voltage work to interview them for this column. If you are such a contractor and would be willing to be included, please feel free to contact me at your convenience.
ATKINSON has been a full-time business magazine writer since 1976. Contact him at email@example.com.