Mike Murphy
Why?
What? You didn’t listen to Earl?
The tougher the job is, the fewer the number of competitors that crawl out of the woodwork to bid on them. Case in point: School projects were notoriously dangerous in the early 1990s in the Dallas market. The state bird was a construction crane at the time, and the city of Dallas and surrounding towns were booming. There were probably more than 80 schools bid during a three-year period in the immediate area. I sat in on a few bid opening meetings - it was hysterical. As many as 40 contractors crowded the rooms, cajoling each other about how stupid everyone was to be wasting their time on a “project like this.” The camaraderie was interesting, but the end result of the bid opening was always funnier. Inevitably, the contractor who won the project would have a look on his or her face that was somewhat akin to a third-grader who had just vomited in the middle of music class.
Everyone knew that the chances were better than 50/50 that the low-bidder had left something out of the project. That was a recipe for losing money then, and still is today. At the time, cookie-cutter school projects were usually so easy to construct that up to 100 contractors sometimes took a shot at the bid. How can a company differentiate itself among 100 competitors? Ever heard of a price war? There is not much money to be made when the number of competing bids gets ridiculously high.
Earl didn’t bid many school projects, but when he did he made sure it was not a cookie-cutter plan - and he usually landed a couple of those every year. In some of those instances, the job nobody wanted had complicated control systems that not many of the local contractors could bundle. Earl knew that school boards liked getting one bid with equipment and controls wrapped up together. Frankly, it was usually less expensive for the schools that way. However, fewer bidders meant more profit for Earl.
Finding the job that nobody wants doesn’t have to be as monumental as finding skyscrapers or schools that are unique and difficult. The next time you walk through an office building, check to see how many portable heaters are hidden behind trash cans in cubicles. Do you see slivers of cardboard being used as airflow diverters in homes? Do you see a door that is constantly closed on a second floor? Maybe discovering the job that nobody wants is really just as simple as finding the telltale signs of energy loss or discomfort - the job that other contractors just simply don’t know how to do.
ANOTHER PROFITABLE JOB
Professional diagnostics and professional solutions offer tremendous opportunities in 2011. Depending upon where you live, you’ll be seeing more performance verification requirements during the next few years. For example, the Department of Energy has created the Home Energy Score Program, which is being piloted in places like: Omaha, Lincoln, Neb., Minneapolis, Cape Cod, and greater Charlottesville, Va. Southern California Edison has a contractor program that is based upon the Energy Star® Quality Installation Program. These represent only a few of the many utilities that are latching on to the Quality Installation Standard (ANSI-ACCA 5 QI), one that was developed by the Air Conditioning Contractors of America.Basically, it appears that a cycle of utility rebates is waving through the country with the goal of encouraging energy conservation. Ensuring that the HVAC equipment is performing at prescribed levels has been identified as an extremely important feature for these newer, more end-result oriented programs. In other words, installed systems that do not deliver on their promises are going to become a thing of the past.
True, it will take quite a while to weed out the “low-bidders,” because enforcement will continue to be a challenge, but an interesting thing is that this is not cookie-cutter kind of workmanship. Not everyone can do it.
Be on the lookout: It could be one of those jobs that nobody wants.
Publication date:01/10/2011
