Central Vacuum Stimulus Package: Top 12 Bail -Out Steps for Your Central Vacuum Business

Ten minutes worth of prime time TV news will ruin your confidence in the economy these days. The stock market continues to be a roller coaster nightmare. Political rhetoric promises the moon while taxes continue to skyrocket. So what's your plan

Ten minutes worth of prime time TV news will ruin your confidence in the economy these days. The stock market continues to be a rollercoaster nightmare. Political rhetoric promises the moon while taxes continue to skyrocket. So what's your plan for survival?

Here are 12 proven areas of concentration for your consideration to "bail out" your central vacuum business, to inject valuable sales, and to help you thrive in this downturn. All of these come from real clients who are in the trenches facing the same issues with which you contend. Their builder markets have dried up but they still have strong sales. So how do they do it? How do they remain profitable?

#12. Study the Data. Do you really know who your clients are? Look at your last six months of jobs and profile your clients. What is their age, gender, house size and neighborhood location? Who made the buying decision on the job? What was the hot button that pushed the sale? Come up with a list and then run your clients through the grid looking for trends. One of our dealers identified his growth this year in the following way: New Construction sales up 1%, Existing Homes up 203%, Parts sales up 31%, Parts sold on service calls down 5%, Trading goods with other vendors down 13%. This guy knows his business and leverages the profit centers.

#11. Buy in bulk. Freight costs have gone through the roof because of fuel prices. The freight difference between 800' and 1600' of pipe is $85 verses $87. That means the freight on the second lift of pipe is only $2. That $83 savings could buy another 250' of pipe! Most OEM's and distributors offer discounted pricing on fittings and inlets when bought in bulk. We have a few dealers who purchase 30,000 feet of wire once a year!

#10. Put Good Practices in Place. When times are slower; these dealers recognize an opportunity to refine their practices. Like most businesses they have grown without following up on the details assuming they will work themselves out. These details will make you more efficient for all future work. Start to identify any non -value added steps in your installation process. Take time to clean out the company truck and organize it so all the tools are in known locations and the fittings are always found in the same place. Build racks to store items in their proper place in your warehouse and organize your work benches. Use the time to educate your employees and even yourself by watching training DVD's such as M.D. Manufacturing's Advanced CV Training Seminars. Whatever you do, don't cut back on quality! During times like these the best dealers show their true colors.

#9. Be Friendly to the Competition. The tough times often weeds out the trunk -slammers. Their business is built on flash which disappears easily. Joe Reece of Central Vacuum of Jackson, Tennessee says he has always been friendly with them. When they went out of business he offered to buy their drills from them knowing it's one less reason for them to consider getting back into the business. Now they even refer their old clients to him!

#8. Network, Network, Network! The best tool in recessionary times is relationship. Personal referral is huge among those who are spending money. The rich will always be with us and there are always people making money during a recession. Even in the Great Depression the movie industry sales went through the roof. Consider being an active part of your local Builder's Exchange. Give back to your community through charitable events like Habitat For Humanity and rub shoulders with the other contractors in the region. These other charitable guys are the ones who are usually still building homes during down times.

#7. Deal Wisely With Builders. When builders slow down, they often build their own home. Their home will generally contain more amenities such as a vacuum system. Builders who are still building multiple homes are also offering a greater amount of amenities to entice buyers. Yes, there are less housing starts now, but the percentage of homes getting central vacuums has increased. It's the entry level homes that have vanished from the market. At least offer to rough -in homes at a reasonable price to the builder! Treat builders with respect, be sure to show up on time when you have an appointment, and clean up after yourself if you leave wood shavings. But do be cautious offering builders extended terms. Actually, consider the reverse and offer them incentives for payment the day work is completed.

#6. Don't Lower Your Price. Instead offer additional items included in your price. Throw in an extra VacPan®, VacnSeal® or Garage Kit. You can certainly show all this on your original quote and then show them the percentage or total dollars that you have "discounted" the system. Everyone wants to feel they negotiated the price down. Usually you make a 50% margin on extras so why lower your price $100 when it only cost you $50 to throw something in for free? This will protect your price when we come back into a robust economy.

#5. Push Green. Yes, the builders are caught up in the wave of "green" marketing. The central vacuum is a key component of cleaner, safer homes and it even qualifies for 5 LEED points. Read the centralvacuum.com article "Does Green Exist in a Vacuum?" The facts are clear that central vacuums are far healthier than portables. I was approached at the recent CEDIA Show in Denver by a computer repairman. He stated that he can always tell when a home has a central vacuum in it compared to a portable. He stated that the CPU has far less dust accumulated in it because the central vacuum does not simply recirculate the dust back into the room.

#4. Submit Editorial to You Local Paper. It takes time to submit an editorial to your local paper but the rewards are phenomenal. Manufactures such as M.D. Mfg. have pre -designed editorials and you can simply insert your name and contact information in them. Be sure to include a picture of your shop, trucks, or recent installation when you e -mail it to the "home" section editor. They love local stories. This is FREE advertising! Talk about a recent existing home installation or a new product you are offering. Talk about the Green aspects of central vacuums. Talk about your growth despite the current economic trends. Just write something!

#3. Link Your Website to an On -Line Store. Most CV installers do not have the expertise to create an on -line store and they don't have the staff or equipment to send packages through the mail or UPS. This takes valuable time and effort. M.D. Manufacturing offers a unique opportunity for any central vacuum dealer to link into M.D.'s retail site and garnish a healthy 50% of any profit derived from the sale. A $200 hose sale might have cost you $100 for the hose, $10 in shipping, and $30 in labor including sales time and shipping time; leaving $60 profit. Simply telling the client to click on the "Central Vacuum Parts" link on your website would have given you about $50 without lifting a finger! Many clients want to save fuel costs and will shop on -line, even at night. Programs such as this allow you the benefits of on -line sales without any of the liability.

#2. Mine Your Existing Clients. Many central vac dealers have been in business for two or three decades. Past clients are your most valuable asset. Take time to create a database of their addresses and e -mails (as possible) and regularly send them marketing material. If you have alarm monitoring accounts, send a central vacuum notice out with your monthly billing. Think of all the new products that have come out in the last ten years! Let clients know about them. This would be an excellent time to upgrade them into a quality electric attachment set. Hose socks, pet tools, specialty hard -floor tools, extra wands and even VacPans have greatly increased the value of the product category. There is certainly a greater awareness of the health aspects of central vacuums so why not help them take advantage of this? Provide them incentives such as a Garage Kit for installation referrals. Many clients would love to upgrade to a quieter, more powerful unit if the option was suggested. Here's a terrific way to make a couple hundred dollars in an hour!

#1. Concentrate on Existing Homes. By far, this is the issue that will separate the companies that thrive verses survive. When people are not building a new home, they have a greater tendency to upscale their existing home. In recessionary times, they eat out less and entertain more. This makes them more likely to pay attention to the cleanliness of their homes. Existing installations have wonderful benefits for you. You get paid on the spot, you become personal friends with the client, and you insure that they are properly trained to use the system. Don't be afraid of the installation process; many manufacturers offer training tools and classes. M.D. Manufacturing offers an extensive training class through VDTA showing realistic models for installation without breaking open any walls.
Besides doing Home Shows, the best method of obtaining existing home installations is through referrals. Offer your older existing clients a free check -up. First, they'll be shocked you called after the sale and you can actually use this time to offer additional amenities. Use this time to insure that the system is functioning properly but also provide them with a brief survey. It should include simple questions such as their satisfaction with the system, the installation, and the salesman. From a list, have them identify the reasons for their purchase and their satisfaction level. Have them tell you their favorite feature and any suggestions for improvement. But most of all leave them with a pen and paper to list any friends, neighbors, or relatives that they may have mentioned the product to who might like information sent to them. Because you have come out to their home for free and you have provided excellent service, they feel obligated to give something back to you. Before leaving the neighborhood, be sure to knock on 10 doors introducing yourself and your client's comments about your product. Because you know the approximate size of the homes, you can provide a ballpark price for the installation. It is amazing how many people want to keep up with the Joneses! Also send the original client a "thank you" gift if you make any sales.

So it's not all doom and gloom if you actively pursue the growth of your business. Keep a positive attitude and watch for signs of success. Talking with a number of dealers this past week, they spoke of the past recessionary times as their most profitable. They ran their business with greater concern for the bottom line, they put more structure in place, and they avoided tasks that wasted precious resources. If you have additional comments or suggestions, I'd love to hear from you. Grant Olewiler (661) 283 -7550 grant@builtinvacuum.com. M.D. Manufacturing, Inc.

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