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It May Be Time to Diversify
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by Rod Getz - Getz Fire Equipment, Peoria, Illinois

Now that 2009 is behind us and the economy is still trying to recover, this may be the best time to look at some ideas to expand your business. I will review some areas that have been successful for my company and some ideas we are working on.

First Aid

In the past, we started a first aid division. This is an add-on product with a very good profit margin. Most of the products are easily available, and I think it works best if you dedicate a specific sales rep to concentrate on selling first aid and some minor safety products. You have an existing customer base, so your techs can hand out flyers and look for opportunities and customers who might already use this type of service. Start off by selling cabinets and stocking them with the first aid supplies and tablets that may be used for that customer. Some competitors use a “stock” cabinet fill, but by suggesting to customers that you can “customize,” you might be able to get some new accounts. Restaurant and industrial accounts may be serviced monthly, others are serviced bi-monthly, and others semiannually. It has grown to be a nice addition to our business and another service the competition may not offer, which separates us from everyone else.

Kitchen Exhaust Cleaning

We also started a division of kitchen exhaust cleaning. This is a type of business that not everyone wants to get into (but then again, that might be the reason for you to look at it). The down side: it’s difficult to find quality employees who want to work nights, in the grease, and crawl around inside hoods and ducts. The upside is: you probably already have restaurant accounts (who may not be happy with their current vendor), and there are not many competitors in this area. It’s all service, so the profit margin is very high. The average single hood and one exhaust duct take about three hours to clean. Our crews consist of two people, and we use high pressure/hot water (which most of the industry uses) to clean the systems. The initial investment is about $10,000 plus a vehicle. It also leads to other add-on sales, e.g., replacement filters, fan hinge kits, access panels, and grease collection devices around the exhaust fans on the roof.

Fleet Washing

Another specialty business we ventured into is fleet washing. This involves washing truck fleets, delivery vehicles, new and used cars at car dealers, and also getting into concrete cleaning. The investment is more, but the competitors are fewer. We purchased a reverse osmosis water system (RO) that generates spot-free water (this is very helpful because we don’t have to dry off the vehicle after we wash, which saves time), where most competitors don’t spend the extra costs. Remember we try to differentiate from everyone else! We then carry our spot-free water with us, therefore needing larger trucks, so the cost to enter this market can be high (equipment with RO system: $15,000 plus vehicle). However, because it’s all labor and very little material (some soap), the profit margins are very high. The add-ons such as pressure washing buildings and other types of pressure washing can also help. We even got a contract to pressure wash mining equipment on a regular basis. The nice thing about this business is you can pick up one account and because you are often washing on a weekly basis, the annual amount is large. It doesn’t take a large number of accounts to keep one truck busy.

Fire Alarms and Sprinklers

Other services we have grown over the last couple of years are fire alarm and fire sprinkler service. While these may not be new to our industry, I think there is plenty of growth that can be had. Again, you already have the customer base, so why not expand that? It’s easier than going out to get new accounts, and it should be more profitable. Put on your thinking cap and brainstorm some ideas for expansion. Remember, some of the odd or unusual areas might be the best for you to get into.

Security

New items that we are currently looking at include video surveillance and access control (security). I think this is a growing industry and our system and alarm techs can pick up the installs and service with little additional training. Video surveillance (CCTV) is the easiest. Most of the install is low voltage and coaxial cable, which is easy to install. Again, a large number of your existing customers are using this, but they may be interested in replacing their old tape cassette recorder to a new digital recorder (DVR) and adding cameras to what they monitor. You can buy this equipment easily, and the profit margins are good. Access control (card access) is a little more technical, with some programming and installation of electronic door strikes which may require a locksmith to install.

Website

The latest area we are working on is updating our website. I think this is very important as most people are using the Internet and not the phone book to look up vendors. Contact your current supplier and get their thoughts on sprucing up your website. Your website administrator should be able to use search engine optimization (SEO) strategies to update your website so when customers use Google to search for key words, your company comes up on the top of the screen. I am reducing my yellow page ads and spending more on our website.

In these trying times, it’s very nice to have different divisions to pick up sales where one division may be down. It also keeps us different and unique from our competitors. Not many companies offer all the services that we offer, which makes it difficult for competitors to take accounts. So talk to your customers, your employees, and “think outside the box” and come up with a new idea for your company to grow and expand (which will make your company stronger). Good luck with your new venture.

Article published in Firewatch! March 2010. Copyright NAFED 2010. Do not reuse without permission.
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