$ for a living?

[Longhorn84]

I have a great job in a great market but HA is something I think I can do and I have access to many high profile professionals who would use me in a heartbeat. I realize I will start small but what's a realistic goal of income in 3-5 years in this industry as a professional installer if I own my own business? My target goal would be $300k+ which I assume is obtainable if you're doing new construction with $50k+ jobs but this is a passion that I just don't get bored with after reading/tinkering/etc all day. Anyone in Houston looking to bring on someone young and willing to learn? I would have to work on the side of my 9-5.

 

[Del91574]

The 5 digit jobs, especially those you mention are the white elephant and not common or realistic for a systems installer in residential unless you're up in the mid to high 6 digit home projects.
 
The average cost to have a guy in a truck by a company to perform any work (as an employee) is average a net cost of $125 hour easily. I could spare the math, but I'm sure it's easy enough......
 
Not saying it's not doable, but the numbers don't align

 

[Longhorn84]

Appreciate the insight. I live in a nice part of Houston where homes newly built are $1M+ and most of my work associates are lawyers/real estate and have $600k+ homes. Eventually I'd like to install commercially and residential, I figure that's the only way to really build a profitable business. Also weave in IT consulting, etc. I like this guys business model http://www.andrewsouthernconsulting.com/

 

[Neurorad]

Sbsmarthomes, a CT member, is doing it right. Figure out how he does it, using Google (more active elsewhere in recent years). His work is impeccable, and he doesn't come off as a salesman. Honesty can get you everywhere.

 

[Longhorn84]

Thanks for the tip! I'll reach out. I checked out his website and it does seem like he does a great job. Maybe I'll just move to Santa Barbara and work for him!

 

[Dean Roddey]

One thing that is always a problem in a gig like that is that you have to always be spending a lot of time chasing down future work, while doing current work. That can be really difficult, given the long lead time and extensive preparatory work involved in getting into a big job. So you might either not be able to spend your time doing what you want to do, or you would have to trust someone else to do that other stuff while you do the dirty work. That would probably put him in more of an effective company leadership position than you, since he will become the face of the company. It would also probably put him in a good position to destroy you if he gets a wild hair of some sort, so then you have to spend time keeping track of that.
 
And of course no chickens can be counted until you have killed and eaten them, and maybe not even then. If something goes wrong, and you are the poorest guy in the room, you probably will end up significantly poorer, not them.

 

[wkearney99]

Dean's got it right.  The challenge is not necessarily in doing the work, it's in obtaining the work and keeping the enterprise going.  It takes a ton of effort to keep a business going.  Phones, bills, paperwork, etc.  That's not even including the time to hustle up new business.  Then there's support for existing customers.  Hell, that can be an even greater drain if you don't structure it as a billable relationship from the start.
 
Any time someone says it'd be great to be self employed, I offer the hooker analogy.  You might prefer the time on the mattress or the time on the street corner, but without doing an excellent job at both you're not making any money.  The analogy degrades further when you have to deal with overhead, aka having someone else pimp out your work.  Yeah, it's an ugly analogy and perhaps not one for mixed company, but it's sure as hell accurate quite a lot of the time.

 

[Dean Roddey]

If you were to go into it with a $500K pool of capital, which you could survive losing worst case, that would be one thing. That gives you the kind of cushion start off with the resources and safety nets you need, so that you aren't trying to finance job 2 (and pay the help) with the revenues from job 1, when the revenues from job 1 suddenly are late. You'd have the reserves to deal with disagreements and delays and paying for your own learning curve mistakes (bound to happen), and all that. Otherwise, it can be a soul eating trip down paranoia lane, that shaves years off your life.
 
One good thing is that this is probably the time to start, when we are on the cusp of another up-swing, not when I did, when we were about to enter the Great Recession.

 

[Longhorn84]

All great points. I've actually installed two very small scale projects for coworkers recently and I've gotten a glimpse of what happens when you turn your hobby into a money making venture. When it's a hobby, and I show my wife that she can turn on a light with the phone, she's impressed. When someone pays me to make a light turn on with their phone, they don't congratulate you when it works, they only complain when it doesn't work like they imagined or complains that it doesn't dim to 50% automatically when their dog barks, etc. I think I'll stick to being an enthusiast with the occasional side job. As "cool" as a lot of the programs and hardware are out there, I think the reason it hasn't taken off mainstream is that it's still not that convenient for everyone's day to day life to make it "worth it" to the everyday person. I couldn't imagine the level of service and continued support demanded by some of the big $$$ installs. 

 

[tmbrown97]

It takes a lot... I'm working on a very large project right now... and it seems like you really get paid for what you sell and install - but you don't really make anything on the initial design which, for me, takes a ton of work to get it right.  That's the time that's spend outside normal hours researching and testing.  Plus I usually prefer to test out what I'm selling which means an R&D budget.  But I still have to deal with the taxes, the accounting, business insurance, licensing, and all the other fun stuff that goes along with this...
 
Luckily for me this is just my hobby so I only take a few projects/year - and my day job is pretty flexible - since I'm not starving for the work I really only take on the jobs that fall into my lap - I've never had to look for one.

 

[Longhorn84]

Is there an average % profit that's industry standard? For example, I installed $1k worth of equipment for my coworker and charged him $1,700 because it was a small job and I knew he would pay it. I assume for a $50k job the profit margin would be lower in terms of %, maybe $10k? I have no reference point but I have to assume if the average jobs profit was $10k and you did 60 jobs a year, your company nets $600k before paying taxes, salaries, marketing, etc. That's assuming you could get 60 jobs! 
 
And I totally hear you about the design time. What about training the client how to use the equipment, that seems like a big time waster as well and part of the job that you don't get "credit" for. 

 

[Dean Roddey]

In our biggest residential system, he has a couple guys who maintain it full time. Then again he has a armed guards and a huge artificial lake with a waterfall that has pumps and pipes bigger around than me and a bunch of other really nice stuff.
 
One big part of it is not to let the customer's desires get out of hand. Be prepared to say no, or walk away, if they want to do things that you know are going to be subject to a lot of support, or want to use gear that isn't reliable or easily integrated. Stick to things that you know from experience are workable and safe.
 
Ultimately, though it's really hard to do, the goal I think would be to create a standard package (or perhaps a small set of tiers of them) that you can modify per installation, and charge big bucks if they want something that cannot be approached in that way. That way you are starting from a known place, and saving a lot of work.
 
It's hard both because, well it's just hard, and also because you get into the 'who owns the code' thing. If every system is a completely custom system, then who cares. The customer paid for it, so let him own it. But if you want to be efficient and reuse standard stuff that you have put a lot of work into and which is now a basis of your ability to deliver value, how do you deal with that? It's not like selling a commercial application where it's obvious that you are only buying the right to use it, not the right to the code.