Has anyone figured out how to make this work?

Prewiring surround and maybe a 4 zone audio system for super cheap or free in specs, counting on a high percentage of calls from owners once they purchase the unit.

I have many builders who I could approach with this. Most that I have talked to already aren't interested in spec'ing a prewire.
I have thought it over with lots of different options and prices for different projects such as, condos, homes from $250 K and up and I was just wondering if this was working for any other business.
Thanks,
Jason Walter

I think a lot of companies have folded with this model. I am sure others can provide more details of misery.

Never, never give away your work!! Treat your builders with respect and they will reward you with recommendations to their clients. You are supplying a valuable service that homeowners want. Do not, under any circumstance, devalue that work by giving it away. As suggested by OEX, many companies have taken this route to their grave. Every time someone in our industry does this, the rest of us are devalued. Do you think an electrician would give away his prewire?

This model DOES NOT WORK!! Even if you can sell the upgrades later on, think of your cash flow...expending all the money to do the installations without recognizing a return for at least one year, more likely 2. I have never met a company that tried this model and didn't go out of business. At the most, offer to equip the model home for free, but even this practice is passe.

Please read this article.

[Link: ce-pro.com]

I'll bet.

From the sales viewpoint:

You are offering something with a price tag of 0.00. This diminishes the builder's perception of the value you put on yourself and your services. In other words, if you're giving something away, how do the people you are interacting with view you on that issue? Let me ask you this; if a vendor gave you wire on the premise that they got to present to all your customers in the hope of selling components, how would you think of them; a business partner you could grow with or a source of free wire?

From the business viewpoint:

Bad financial mojo. Unless you have deeeep pockets you could not finance this effort. The more you grew the greater your front-side outlay. This would impose a glass ceiling on growth, for sure.

From the practical viewpoint:

Builders that would be attracted by this would more likely (not always, but probably the majority) to be the type you want to avoid.

From the A/P side:

Big plus; there would be no problem collecting payment on the work you had done. :-)

Not free, but at a price point the builder finds acceptable. And at which you still garner a modest profit.

Of course, you've got to watch the numbers very, very close, as even a small increase in fixed costs can alter everything.

Another problem with free is that not only are you huring yourself, you're also taking everyone else down with you.

Once you cross that bridge you can't go back. Think of DBS systems. What would happen if Direct & Dish suddenly decided to start charging $800 for receivers again?

Maybe it's time to get out of this business. All this industry needs is for someone else to start giving more work and equipment for free and/or close to cost just to get the job. I think its really getting bad. Tell me if I'm wrong. I would love to have some feedback about how everyone else feels on where we are going.

I agree, this is not a good idea. And you would more than likely find yourself prewiring homes for another company to come in behind your back 2 years later and benefit from your hard work.

I have a few quotes that I live by:

"Don't work, just for the sake of working"
"I charge $75.00 per hour, $150.00 if you want to help."
"Quantity is NEVER better than quality"
"I'd rather have 10' too much wire, than 2' too short"

Once you open pandora's box you can never close it. Good Luck

Another thing to consider is that once your competition catches wind that you're doing free prewires, their obvious comeback is going to be:

"Sure there's people who'll do it for free....if you want lousy work, but if you want it done right, come to us"

If you have to give away your prewire costs, then you are in the wrong market. It's a total waste of time to spend on tying up installers for a non guaranteed return (in fact a guaranteed loss). Spend that time on nurturing more lucrative clients and projects. Speculation in terms of some consulting, perhaps. But the second the drill comes out, it's on the clock.

Damn, after reading all the responses I have just figured out how to make this work...

Yes you can offer "free" pre wire to a builder. But, like most things in life, there is a catch.
First, depending on size and value, you need to determine how much wire and labour you are willing to risk. 6 phone and coax, 4 data and 4 rooms of audio?? or something like that.
Next, the "free" is only available to pre construction buyers.
Those buyers must then sit through a 90 min. "seminar" with your sales staff explaining all the wonderful things they can have in their new home, and or add to their mortgage (the big upsale).

If you can't get almost every client to buy something, even an upgrade or more locations, then your doing something wrong.

Even to move a couple of jacks could cost a few hundred dollars (you just recouped cost)

As for the builder, if he has some lots that will be built before they are sold, give him the lowest possible price you can for those. As long as it's not more than 30% of the homes in the development, remember, these will eventually get sold to people that you may never meet.

2 big problems with this.
1. find a builder that likes this and the terms.
2. this is geared to homes 1/2 mil or less, those people are often spending everything they have just to get the house, you are a luxury item. Thus alot of sales made will be small, or discounted to get the sale.

But hey, it could work.

The only free thing I like is PORN!

I've decided to start doing free prewires just as soon as my wire suppliers start giving away free wire, my van runs off of water, my insurance company starts giving away free policies, my telephone, gas and electric providers stop charging me and I find a bunch of guys who are willing to work for free.

There's nothing wrong with giving something away for free if it makes you money, often referred to as a "loss leader". I just think that in this circumstance it's insane because the payoff won't be there.