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How can you argue against going into this phenomenon called low-voltage, a robust growing market consisting of security, communications and integrated products and services in the 120- to 250-volt range?
Consider this: The United States will remain the largest single producer and consumer of security products in the coming years, according to recent reports on world security equipment from The Freedonia Group, Cleveland. The current (2005) $13.6 billion U.S. market is forecast to expand more than 6 percent annually through 2010 to $21 billion. It’s an opportunity you can’t afford to miss.
Every market in low-voltage is as hot as high voltage. Some of the markets particularly poised for growth, according to Graybar’s Paul Koebbe, national market manager, Clayton, Mo., are closed-circuit television surveillance (CCTV) and Internet protocol (IP) video, followed closely by fire alarms and mass notification systems.
“Electrical contractors can help themselves and their customers by getting an education in both information technology [IT] and data communications,” especially as these disciplines continue to converge, Koebbe said.
Niches in low-voltage are easy to define, depending on your expertise. You can see it everywhere you go—security takes precedence in every venue, including healthcare, education, public/cultural, hospitality and residential vertical markets. Here’s what might be in it for your electrical contracting firm:
- The ability to entrench yourself in one of the fastest growing markets—security and integrated systems
- The chance to establish your expertise early on as customers increasingly look to purveyors of this and related disciplines
- An opportunity to increase revenues and add recurring sources, such as third-party monitoring of accounts, or secure upgrades, add-ons, and service and maintenance agreements
- Assistance from manufacturers, distributors and professional affiliations that want to help you be successful. With that comes a bonus of cutting-edge training, educational sessions and even design-sales support.
- The opportunity to branch out, attract new employees and raise your company to the next level of reputable business practice
- A foot in the door of the IT world, if you want it
According to a recent survey by PricewaterhouseCoopers, CIO magazine and CSO magazine, 75 percent of organizations have engaged in some form of integration between physical security and computer security, up from 53 percent last year and 11 percent in 2003.
Security is only one piece of the low-voltage puzzle because today, functions rarely stand alone, and consumers don’t want them to. The beauty of integrated systems to the customer lies in the convenience factor, and how easy is that to sell?
The momentum behind low-voltage contracting continues to gain strength. Hands down, the need for energy efficiency is a big part of low-voltage integration for residential, commercial, institutional and industrial projects across the board. These systems can include energy-efficient features such as occupancy sensors, lighting controls, automation and more, offering real and tangible cost savings to the consumer or end-user.
This attraction—how it will be most effective to sell low-voltage—was quite apparent at a recent Security + Life Safety Systems magazine inaugural Webinar at the International Security Conference & Exposition (ISC Expo) in New York late in 2006. Attendees and speakers concurred on this point: integrated functions are the wave of the future and will result in a new breed of systems technician where partnerships and expertise reign.
Bosch Security Systems executive Leon Chlimper, vice president, systems, Fairport, N.Y., emphasized that when contractors learn to sell the cost savings of integrated systems, they will see results in their sales efforts.
“You can offer real return on investment to the customer or building owner so they can save money,” Chlimper said. “The connectivity between the systems is there; you have to educate the customer of its existence and what it means to them.” Chlimper recently added the title of head of the Bosch Technical Support and Training group to his credentials.
This cost savings and return on investment seems to be the next stage of integrated systems. At a recent national gathering of building professionals at the Window and Door Manufacturers Association, Des Plaines, Ill., annual conference, building expert/speakers reiterated the fact that the Leadership in Energy and Environmental Design (LEED) Green Building Rating System is now focusing on long-term energy savings. Rob Cassidy, editor and chief of Building Design and Construction magazine, Oak Brook Ill., said, “The U.S. Green Building Council is now shifting its focus from the energy-efficiency issues to the money issues. Now major money consortiums are realizing that these LEED buildings may be good investments.”
LEED, a program of the U.S. Green Building Council, is the nationally accepted benchmark for the design, construction and operation of high-performance green buildings. It promotes a “whole-building approach” to sustainability, recognizing performance in five areas: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.
Where you fit in is up to you, and there are endless possibilities to get profitable in low-voltage. Residential will continue to come on strong as consumers expect the same levels of communications and security they have become accustomed to at the office to embrace them at home as well.
According to an independent research study, Electrical Contractors’ Roles in the Residential Market 2006, for Electrical Contractor magazine by Renaissance Research & Consulting, N.Y., almost 60 percent of electrical contractors that currently perform residential work expect the volume of this work to increase over the next three to five years. In addition, about one-quarter of electrical contracting firms that do not currently perform residential work predict they will in the near future. Like other areas of contracting, electrical contractors do more than install and are selecting the type and brands of systems, giving them the flexibility to custom-design the specification to the application based on performance and end use.
Work your niche
In the residential field, electrical contractors may often be approached about installing or recommending outdoor lighting. These simple requests could translate into extra income and possibly a launching pad for expanding their current business. Glen Barry of Newburgh, N.Y., recently realized this opportunity. After completing several outdoor lighting jobs for a landscaping contractor, the landscaper suggested Barry engage in outdoor lighting as a full-time business. He took the advice, and the result was Barry’s new business—Hudson Valley Night Effects LLC.
“I have always wanted to run my own business,” Barry said. “My business goals are not just to be profitable, that goes without question, but also to provide the highest quality workmanship.”
After examining numerous independent contracting opportunities offered by other manufacturers, Barry decided on Nightscaping, Redlands, Calif., a pioneer in low-voltage outdoor lighting who helped him get his business off the ground.
In the short time Barry has been in business, he has performed several upper-end residential jobs, and landed a high-end commercial job as well. His income has already increased more than 30 percent, he said. In addition, he added that his business has continued steadily through maintenance—replacing lamps, cleaning fixtures, adjusting lighting as landscaping grows and changes, and fixing lines when cut into by gardeners.
This could be you. As the electrical contractor, you already know the most important part: the power, wiring and cabling—the backbone—and now you can take it the next step. Here are some of the low-voltage services you can offer customers:
- Security, including driveway and fence sensors and motion-activated and outdoor lighting
- Surveillance cameras and IP video for convenient viewing at critical areas of the premises, including entrances and exits, gates, spas, game rooms and garages
- Smoke and carbon monoxide detectors (combination units are purportedly in the works)
- Home theater, computer networks, intercoms and whole house audio
- General automation of other functions and integration of all of the above.
Will you focus on a specific vertical market, such as healthcare, education, public/cultural or financial, or will you concentrate on all of those above and add in the residential customers who naturally migrate from commercial? Will you hire a systems integrator and IT personnel or go the subcontractor route? That’s up to you. Create a profitable business and a customer for life—when you branch out into low-voltage.
O’MARA is the president of DLO Communications in Park Ridge, Ill., specializing in low-voltage. She can be reached at 847.384.1916 or [email protected].