Starting a Home Theater Bus. (1 Viewer)

[KyleBeck]

I have been tinkering with the idea of starting a custom HT installation business for some time now, and was wondering if this type of venture could be profitable. There is already a "one-stop-shop" for this in my area, but they are quite expensive, and seem to have somewhat of a monopoly. However, there is a lot of new home development and families with a lot of disposable income, so it seems that it could be quite successful, if it was done right. Any thoughts?

Kyle

 

[MikeWh]

My guess is that many people here have toyed with the idea, if they weren't already doing it. From what I've read in this and other forums (particulary those where custom installers abound) is that the business can be profitable-- the question is how profitable do you need it to be (to make a decent living at it)? I remember one installer noting in a particular thread (on another forum) that business was booming in LA.... They were literally moving from job to job with a continuous waiting list. Sounds nice.

The problem I see with this type of venture is basically two-fold (and to which you've already discovered):

1) local market-- is there a sustainable market in your area (key factors: disposible incomes, tech-savvy area, etc...)
2) local competition-- is the market already saturated, such that the supply exceeds the demand?

These are pretty standard considerations for any business, in addition to the myriad of other issues that people face when going into business for themselves, probably most important of which is "do I have a clue as to what it takes to run a business???" I think this is the key that keeps most people from making the leap into opening their own business... well, that and capital!! $$$$

 

[Bob McElfresh]

While you can sign up to represent speaker and electronics lines, the internet and mass-retail stores make this very competitive and un-profitable. So you are stuck with most of your money coming from custom installations.

This means making cabinents and doing custom enclosures. (Do you have the tools & background in this?)

Run out and pick up a copy of "Audio & Video Interiors". This is the "Better Homes and Garden" of the upscale HT world. They also have addresses for some of the professional organizations like the Custom Designers and Installers Association (or something like that). This organization has information/contacts on how to do custom work.

You can also do:

- Sat installations (Direct & Dish)

- Study to become a ISF (Imaging Science Foundation) Calibrationist - These guys go to peoples houses and spend 2-5 hours adjusting the televisions.

- Learn to make custom cables and sell them on eBay or setup your own web site. (Go to eBay and search for "Canare" to check out the competition).

- Get a pickup truck and a part-time coworker and sit in front of Frys, Good Guys, Etc., on the weekends with a sign "Local Big Screen Delivery & installation - $xx". This will get you business and then you can offer to hook things up for people for extra $$. Bonus if you carry cable-making supplies in your truck to create custom cables for people.

The last sounds kind of silly - until you think about it. This will give you exposure to lots of different equipment, customers, and the industry in general for minimal investment.

But you have to be able to carry/deliver things, pull-cable through existing sheetrock, attach connectors, program modest->high-end remotes, etc. There is a lot of stuff to even do modest systems.

(We have not even gotten to how much you need to know about high-end front projectors, video processors, screens, light & acoustic control, etc. High-end is about $15,000 projectors and dedicated media rooms).

 

[MikeWh]

Get a pickup truck and a part-time coworker and sit in front of Frys

I love it, Bob. Do people do this in SoCal? I've yet to see it here in NC.... things tend to take about 3-4 years to migrate here.

Also-- good point with the "cross-over" work, like satellite installs.... This brings up something that I've been seeing in our area: The home security installers are now crossing over into home automation and whole-house sound (I see Bose all over their trucks now). So, the competition can get rough, when other custom installers start migrating to the home entertainment direction (which is apparently a rising market).

 

[scott>sau]

Kyle, Mike was right about capital. Granted getting a business license from the IRS is not much overhead, but you will need it to buy equipment wholesale. You will need capital for a good web site, business cards, Qwest phone and online yellow and white listings, and other things like a CEDIA membership, ISF training see www.imagingscience.com , or even THX training. You need the money for the land, and to buy equipment and specialty tools up front.
Bob, offered many things that a small HT business owner needs to do and have. Training, certificates, technical knowledge, specialty tools see www.lsd.com , and customer relations skills are important for work and repeat work.
The bread and butter in low volt is prewire, (new construction). It is important to build relationships of trust with local builders. At first the work orders come slow, but when you get them the pay is rewarding. Bob emphasized custom, it is all about custom design and installation. CEDIA is offering a expo in Indianapolis SEPT see 3-7 www.cedia.org/expo You could test for Designer 1, or Installer 1, or Installer 2. Be aware as Bob and Mike mentioned, that you become a one-stop-low-voltage-shop. If you prewire low voltage (soft wire), you do it all, phone, security, broadband, networking, HT, distributed audio. You have to have a special license to wire for fire alarms (in CO), but you could still get the credentials. Structured cabling is the cable of choice for prewire. Depending on your knowledge and the builder and the homeowner, you may choose to wire less, but the Adelphia and Qwest demark is usually as far as they go (outside). They sometimes will not even do trim out, (phone/DSS/cable/speaker outlet faceplate install). I am not saying they are bad installers, but they have their toolbox, we have ours.
All-in-all wiring for HT both prewire and retrofitting wire is rewarding. The U.S. government (IRS) wants to help the entrepreneur. Do what you love, the money will follow.

 

[Ted Lee]

i've also toyed with this idea. i have a friend who may have some nice contacts and she's offered to toss business my way.

i would have no problem with basic hardware and setup. easy enough. but the more in-depth stuff (like in-wall wiring, etc.) may be a problem.

also, how does liability come into play?

 

[scott>sau]

Ted very good question. As far as business law, what you don't know can hurt you. Researching CEDIA, PARA, and your builders codes and standards will protect you. There is a difference between codes and standards. Electricians, (high volt guys) require a minimum 4 year apprenticeship before reaching journeyman in Colorado. Low volt guys, (integrated residential systems installers) are not required to have special licenses. Certifications look good for building trust and your own knowledge. If someone started a sole-proprietorship they need not worry about employee business issues,but the homeowner and builder. Moving a small business into a LLC, (limited liability company) protects the company. When business increases its numbers more legal advice is needed to gain employees. Knowledge is power when dealing with the law, it is so technical. Learning the basics of contract law, including the formation, operation, and termination of contracts is vital. These issues arise in the normal operation of a HT designer/installer company.

 

[Ted Lee]

thx for the advice scott. do you have any recommendations for websites (or reading) where i can get more info about contract law, etc?

 

[KyleBeck]

Thanks for all the great info guys!

 

[Bill Wise]

First things first... make sure you have access to a competent accountant and a knowledgeable attorney. The other guys have given great info and tips on the custom install business, but frankly, the HT part of the business will be easy because you enjoy it. It's the "business" part of the business that can bite you in the ass.

Try looking for a niche that maybe the competition is missing. Because you will start out small, you will be much more flexible in how you are best able to serve your clientele. And always remember, no matter how much money you have tied up in inventory and equipment, your customers are still your most valuable asset.

Good Luck,

Bill

 

[Bob McElfresh]

(Duhh)

I just found the latest issue of "Home Theater Builder" magazine (we have a separate fourm for this publication). Run to your favorite magazine store and pick one up. You might even see about ordering back-issues.

If the articles in this magazine get you excited, you may have what it takes for custom HT installation.

 

[scott>sau]

Ted, There is a Level 200 course, under the subtrack: Business Management, called: "It's the Law-Business Issues" put on at the upcoming CEDIA EXPO in Indianapolis September 3-7. The instructor is Phil Conley of Conley & Rosenburg. The instructor is one of CEDIA's general council. A lot will be covered about the basics of contract law there. If you cannot make it because of business issues where you are at you could contact them and they may have a book on their seminar.
www.cedia.org/expo
[email protected]
Thanks Bob, I will pick up that issue.

 

[Ted Lee]

thx for the additional info scott!

 

[Mark R O]

Kyle,
Your first priority is insurance. If some nimrod you make a speaker cable for sticks it in a AC outlet and ignites his big toe, or during a house call the homeowners chihuahua bites your ankle and you punt it through a view window (taking out a Ming vase on it's flight), you may be held liable. As a professional, even offering advice can land you in court. Check around for rates, a few bucks a month will cover you.
Also, until you can get a contractor license (most builders and brokers require one), see if someone already doing phone, cable, dish etc., will let you use theirs. Yup, it's legal and may be used as though it is your own (please check your state law).
Very best in your venture!