ec 2020: strategies for electrical contractor business development in the new energy economy ...

EC 2020: Strategies for Electrical Contractor Business Development in the New Energy Economy Category: New

Business Sector

David R. Riley, Ph.D. Thomas E. Glavinich D.E., P.E.Associate Professor Associate ProfessorArchitectural Engineering Department Civil, Env, & Arch. Engineering Pennsylvania State University The University of Kansase-mail: [email protected] e-mail: [email protected]

Justin Reginato, Ph.D., P.E., LEEP Green Assoc.Assiociate ProfessorConstruction Management ProgramCalifornia State University, Sacramentoe-mail: [email protected]

mailto:[email protected]



Challenge

Shifting Landscape• Energy economics• Boom in line contracting• Recession in building

construction• New technologies• New business methods

EC 2020: Strategies for Electrical Contractor Business Development

Challenge and OpportunityMany contractors are lamenting the loss of business or the inability to capitalize on new work• Too many contractors are currently focused on

holding on to whatever shrinking market share they have left, not increasing their market share

However, some aggressive electrical contractors are capturing work in new fields and are growing despite the recession• Business development is a key tool in this growth


Project Outcomes

• EC Business Development Success Factors

• Manual for Business Development• Recommendations For ELECTRI,

NECA, IBEW, and NJATC


E.C. Business Development Success Factors

1. Healthy core business to build upon2. Entrepreneurial spirit and skill to build

business3. Technical competence in the targeted work4. Process experience in the targeted business5. Knowledge of marketing, sales, and

relationships


Manual Objectives• Provide an understanding of business

development.• Explain why business development is critical

to the future success and survival.• Show how to successfully implement a

business development program through examples and case studies.


Manual Focus• Manual applies to electrical contracting

firms of all sizes.• Focus of manual is on smaller electrical

contracting firms need effective business development processes but don’t have the time and resources.


Business Development vs. SalesSelling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller's need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.


Developing Relationships

• Technical: be the best at what you do regardless of the price.


• Personal: get to know your clients as people.

Business Development & the Services Lifecycle




Phase 1: Young company or new to the market:• Focus your limited resources

on sources of data that are easy to get (e.g. GCs)

• Find out what you do well and what needs to be improved

• Increase your close rate



Phase 2: Established in the market:• Market specific

capabilities to GCs and end users

• Hire an aggressive and smart Business Development professional

• Brand matters



Phase 3: Build on your reputation:• Know your end users

well and talk to them regularly

• Know exactly what they need and when they need it

• Become their preferred electrical contractor

• Own the work before it’s on the street



Phase 4: Move on to greener pastures:• When technologies become

mature, any EC can perform the work, owners/GCs will hard bid it

• While everyone else is beating themselves up, move on to other markets

• Biz dev moves from focusing on maintaining old clients to finding new ones

• Repeat the cycle

The Basic Economics of Biz DevEC 2020: Strategies for Electrical Contractor Business Development

• Know your close rate• Estimate how much a biz dev professional would costScenario:• You bid on $10MM of work and get $2MM (20%

close rate)• You estimate a biz dev person would cost $300k/year• Your biz dev person would have to capture 3.75% of

the $8MM you’re missing out on (or increase close rate to 23%) in order to cover his/her cost

The Basic Economics of Biz DevEC 2020: Strategies for Electrical Contractor Business Development

• Most ECs that have seriously dedicated themselves to a strong business development effort have seen a very large ROI on the hiring of a professional to head that function– Not just trying in increase close rate, but finding new

markets– Found new markets while the construction economy was

soft– Discovered leads before they were on the street; work

towards becoming the “preferred” EC

RecommendationsEC 2020: Strategies for Electrical Contractor Business Development

• Develop literacy of business development process and strategies

• Design strategic plans appropriate for EC expertise, size and region

• Capitalize on NECA/IBEW/NJATC and ELECTRI International

• Monitor new market development

Project TimelineWe plan on completing the research and sharing our findings at the 2013 NECA Convention in Washington D.C. this fall


Activity Su. 12 Fa. 12 Sp. 13 Su. 13 Fa. 13Step 1: Program Design Task Force Formation Step 2: Matric Development Task Force Meeting / Focus groups Step 3: Summarize Results Task Force Meeting Step 4: Feedback Period Step 5: Evaluation and Completion

X – July EI Mtng

X – NECA Convention

X – July EI MtngNECA Convention – X

Team

David R. Riley, Ph.D. Thomas E. Glavinich D.E., P.E.Associate Professor Associate ProfessorArchitectural Engineering Department Civil, Env, & Arch. Engineering Pennsylvania State University The University of Kansase-mail: [email protected] e-mail: [email protected]

Justin Reginato, Ph.D., P.E., LEEP Green Assoc.Assistant ProfessorConstruction Management ProgramCalifornia State University, Sacramentoe-mail: [email protected]





ec 2020: strategies for electrical contractor business development in the new energy economy ...

Documents

loss of business

current business

new business sector

new business sector

new fields

new worktoo

new methods

new markets