19 Great Business Tips from 9 Smart-Home Pros
In a state where the road to recession recovery took longer than most, Florida-based CE pros offer advice on everything from building out a rockin’ showroom to rolling with niche markets.
Arguably, no state was hit harder by the Great Recession than Florida. A huge chunk of the Sunshine State’s economy is built around the new home construction market. Starting in 2006, the bottom fell out of the housing market, and with it went jobs and income.
But nine Florida CE pros not only survived the roller-coaster ride, they are now thriving through a combination of ingenuity and solid business acumen. These businessmen shared 19 secrets of success with CE Pro, including leveraging vendor relationships, embracing IoT, finding niche markets to explore and much more.
1. Manage Projects Closely
CE Pro 100 integrator ETC in West Palm Beach has been in business since 1987, and now touts $14 million in sales with 93 employees and a 13,000-square-foot showroom, but owner Bill Maronet doesn’t take anything for granted.
Maronet admits he fought project managers for a long time until a colleague and friend of his set him straight.
“I started working with one builder years ago, who happened to be a great friend of mine. When we were going over the completed project he said, ‘It drove me crazy that I had to call different people to get someone to give me an answer to something.’”
Maronet was grateful in that moment because so often people don’t want to rock the boat, but his friend’s advice drove Maronet to change his thinking and he immediately hired a project manager.
“The truth is when you’re out in the field, the builder’s project manager wants one single point of contact. Yes, you can give him a list of people’s names and numbers, but the truth is that list is buried deep inside of his desk drawer somewhere. What he’s always going to end up doing is just walking straight over to someone physically on the job.”
2. Embrace IoT
A hot debate of late has been whether to embrace DIY, IoT (Internet of Things), and the like, or remain true to just high-end custom installations. On this, Maronet has strong thoughts.
“You should embrace all these people who are doing DIY and interested in IoT. Why would you not? You can put your head in the sand but the world is going to move on,” he says.
Maronet describes what so many dealers’ attitudes are to change. Instead of adapting, they have an attitude that says, “We’re hot stuff, we don’t do it that way, we’ve always been doing it this way, and we’re going to keep doing it this way.”
He notes, “The truth is that CEDIA was started by a bunch of long haired ponytail guys who did stereo stuff. That’s the truth of it. There was a great market for what they did and they were the ones who started this thing.”
Maronet believes IoT is the future, and soon everything will be controllable. “IoT is our salvation. IoT will make our business. It’s really shortsighted not to embrace technology.”
3. Get Some Rest
With such a large company, Maronet is relaxed, calm and unassuming. What is his secret? Maronet points to a book, Rest: Why You Get More Done When You Work Less.
“I read it and immediately bought a copy for one of my salesmen who’s a workaholic,” he says. The lessons from the book hit home when he was on a family vacation in France, and he was growing impatient with how long the infamously slow lunch service was taking.
“It was taking a really long time for them to bring out the different courses. I realized in that moment of frustration though that I was with my family. There was no reason to be frustrated. I didn’t have anything else to do and the trip was taken so that we could spend time together. As Americans we’re taught to always be on the go. The problem with that is that you miss the now.”
Three more tips from Maronet:
- Don’t become too dependent on a sales force.
- Don’t associate yourself with controlling partners that could kick you out of the company.
- Grow organically and hire good people the minute you find them, even if you don’t need them right then.
4. Be the Expert
David Frangioni started playing the drums when he was 18 months old. When he was 2, he was diagnosed with retinoblastoma, which is a rare cancer of the eye. As he grew up he often felt lonely.
“I found music as a refuge. I got real serious about the drums and immersed myself in understanding music. By the time I was 12 I was playing in bands in Boston clubs with my brother’s fake ID. By the time I was 16 I had played a couple hundred gigs. At 16 I caught the technology bug as a means to make the drums sound better, because it was the early to mid ’80s. I fell in love with technology.”
Frangioni then formed his own music technology consulting company, and by 1989 he was Aerosmith’s in-house engineer. He did engineering for acts like New Kids on the Block, Sting, Elton John, Marc Hudson, Big Boi, Styx, Paula Abdul and Ozzy Osbourne.
By the late 1990s Frangioni still thought home automation “sucked.”
“There was no way I was going to ask anyone to pay me for it. But then I met [projector maker] Sam Runco, and he produced products that I felt like I could genuinely offer in a home theater,” he recalls. Today, Audio One in Miami has more than 100 employees and racked up over $8 million in sales last year.
“We’ve been able to figure out how to deal with the most busy and successful people who want A/V in the world. If I don’t think it’s good enough for me and not solid and reliable, I don’t want to sell it,” he says. “If you’re a world-class chef, I trust you’ll know what to use if you’re making me spaghetti. You’ll know what brand of pan to use, you’ll know what kind of tomatoes will be in season. That analogy is how I approach clients. When you buy Audio One, you’re buying my team, not a certain product. … That’s the brand.”
5. Do Right by the Client
Diego del Pino started his first business, APS Security Systems in 1992. By 2009, clients were asking if he could run speaker cables, and that turned into installing speakers and the launch of Audio Video Excellence (AVX) in Santa Rosa Beach. Eight years later, the company employs 39 people and brought in more than $4 million in revenue last year.
“It may sound like a cliché but we’re honest, hardworking, and we always do right by the customer,” he says of the keys to success. “So many times I’ve realized that you might lose money but you’re really winning money. Meaning, I’m willing to lose money on a deal if that’s what’s right for a customer.”
He describes a recent incident in which a salesperson quoted an outdoor installation project to a client, but forgot to include some requisite products. Instead of possibly making the client uncomfortable, or even upset, by asking for more money, del Pino opted to order the extra products at no cost to the client.
The company focuses on security, A/V and outdoor projects, which is a portion of the business that del Pino says has quadrupled this year.
6. Adapt to Changing Market Dynamics
According to del Pino, the Miami housing market is booming, and his company is seizing opportunities. “We have more 1 percenters here than the average American city because Miami has become a destination for people to have fun. We have finance, the arts and shopping … plus incredible beaches.”
He estimates that 75 percent of the Miami area knows how to speak Spanish. “It’s almost like the capital of South America. Right now a lot of high level executives in Brazil and Venezuela are moving their own capital around and starting to relocate their families here because of current conditions in their own country.”
7. Leverage CEDIA Membership
One of del Pino’s key sales tactics has been involving himself within the trade network community and leveraging his CEDIA membership for continuing education. “The reason I’m a member of CEDIA is because I believe in the professional ecosystem of the company. They’re trying to promote our industry and make it better. With AVX, one of our distinguishing marks from all the trunk slammers is being a CEDIA member. Only serious businesses are a part of CEDIA,” he comments.
Using that outreach education enables AVX to forge relationships with various other trade partners, which account for 20 percent of the company’s annual business. Those partners include a furniture store, Italian kitchen store, two Realtors, and around 30 interior decorators.
8. Target Niche Markets — Like Marine Installs
For 14 years Eric Roy Jr. has been the co-owner of Fort Lauderdale’s AVIA, which attributes 80 percent of its business to marine installations. He’s recently started to put forth much more focus on his new adventure, Caribbean Custom Electronics, located in Anguilla. “We’re the only Crestron-certified dealer right now in the Caribbean.”
He’s currently working on the The Reef by Cuisinart, a golf resort and spa being built in Anguilla that’s owned by the family who also owns Cuisinart, the home appliance company. Roy also is trying to get Crestron more market share in the Caribbean.
“One-off projects that U.S.-based dealers do there often turn into problems, because there’s no one there to fix it when things go awry," he says. "So we’re trying to support the existing community as well as bring in new clients.”
9. Emphasize ‘Custom’
Roy focuses on the custom nature of his business with potential and current clients. Instead of being treated like an A/V guy, he’s aimed to be viewed more like an architect or interior designer. AVIA has to submit custom proposals because there are so many things that could affect the cost.
“For me, the ultimate goal is success on the project, not profit. If we’re successful, they’re going to tell their friends about it and then they’re going to call me. When I sell AVIA, I’m selling the people who work here,” he says.
Roy tries to impart on potential clients that he has a team of professionals who have a lot of experience, and that that experience should be their primary concern when selecting an integrator — not the overall cost. Roy sees himself as an advisor above all else.
“People have no idea what we do when it comes to A/V and it’s my job to lead them down the right path, and prevent them from going down paths that will harm them in the end,” he says.
10. Focus on Designers, Architects
Revenues at Innovative Lifestyles in Naples are up 12 percent this year. How?
Owner Greg Biehl uses the example of how he just landed a 35-home project with a builder. The two were connected via a referral from an interior designer. In fact, Biehl works with about 25 interior designers, and three architects. He finds that working with them is a lot more productive than builders.
“They [builders] are difficult to deal with. When it comes to coordinating schedules, and updating schedules, communication is a big deal, and I’ve run into some trouble. Last week we got a notification that they failed an inspection.”
He likes working with his designers and architects, who aren’t looking at the bottom line, he says. “They’re looking at the finish at the end and how are things going to look. That’s what we care about.”
11. Leverage Vendors
Biehl has been a Crestron dealer since 1994. That relationship has helped him gain more commercial clients, though his business is mostly residential. At the same time, he always utilizes what Crestron gives him to work with.
“I attend Crestron summits and that’s always money well spent. As dealers we go and discuss where Crestron is at, what they’re doing and what we need from them. Last time we needed more marketing material and more diverse kinds of material. They’ve listened.”
For his part, Biehl’s loyalty to Crestron has turned into a business strategy.
“A lot of companies try to be everything to everybody. These dealers will have four to five control platforms. How are you going to be the very best at all of them at the same time? For any dealer that’s going to be a tall order,” he says.
12. Pursue RMR
“We use Ihiji and it works really well,” adds Biehl. “Just this past week we had a notification that a whole bunch of devices went offline which all tied into one network switch and it basically showed me what was happening. I emailed the client and they were out of the residence. There was probably a power outage for 30 minutes because of a thunderstorm, and we had to physically go turn them all back on. If we didn’t have that service the client would have come back to a non-working system, and had to go through the hassle of calling us.”
To generate more RMR, Biehl uses Connect Ninja, which allows him to connect to individual devices to make any changes that need to happen remotely. He’s also taking advantage of Honeywell’s RMR program for security systems, and currently has 100 accounts set up.
13. Optimize Your Website
Biehl has a custom-made website that generates nearly 30 leads per month. This year he’s gotten 10 clients from his website. While that might not sound like a lot, he estimates that those clients have generated his business an additional $240,000 in sales — well worth his $10,000 investment.
14. Explore Motorized Shades
You might think with the sun beating down on the Sunshine State, every integrator is installing motorized shades. Biehl started selling shades in 2005, and now the category accounts for 35 percent of his business. The product line fits well in the southwest Florida market, which has mid-level homes in the $500,000 to $600,000 range, and custom homes in the $1 million to $5 million range.
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