With the recent deluge of $3K and under projectors on the market, and some of them actually being somewhat acceptable... how is that changing this business?
Being brought up on nice CRT units, as most of us have been (where we could make a decent living doing a theater), now with the influx of all the new lower cost projectors do we start up a chain of "McTheaters"?

I mean, a guy could toss together a system with a little Energy Take 5, or Paradigm or B&W or JL sub-sat package with a Marantz or Denon Surround Receiver, DVD player and lets say an Epson 550 or Infocus 4805, and basic Screen for under $5,000 and have a passable small room theater - actually probably better than a set up running 3 or 4 times as much a couple years ago...

The quandry for me is... Do I address this market and start packaging systems in this range, or stick to the higher end systems??? I've got to make a living, and it seems like the lines between the Upper Mid performance stuff (say a $25,000 theater), and the Mid to lower Mid end stuff is quickly morphing into $5 to $10K set-ups.
It is getting more and more challenging to be able to sell projectors (for the most part) in the $10K and up range... (more difficult to point out the actual performance differences & justify the costs)...(Except of course at the real-high end of the spectrum)--but that market is slowing a bit.

I guess I could embrace the trend, and be able to do more for these clients in a given range... Include wall treatment, much better speaker systems, better screens & more attention to room equalization - so a guy COULD for lets say $12 to $20K get a pretty good little theater "experience"... Maybe even have room for a couple nice chairs...

At least in the CRT days, there wasn't the internet frenzy going on... and nobody would have benefitted getting a CRT off line, as they would still need the services of getting the unit converged and tweaked by a professional. But today, I'm encountering so many people who are getting our reccomendations up front, and then buying them off the net... Or COSTCO etc.

In my proposals, should I leave out model numbers, and just list the manufacturor? Should I say... "Hey, it's all or nothing - we only sell the whole entre' - no ala carte?" Or have a NAZI rule or surcharge... Any owner supplied projector or control system (i.e. russound) - will be installed with a $1,000 surcharge of some sort? --- Or not installed??? Or "any owner supplied components installed @$150 per man hour w/no guarantee from us in terms of integratability or performance satisfaction" or some legal jargon, to where we could at least cover our labor costs, and cover our tails, if there is a learning curve our guys have to go through installing some of this crap?

I left a clients' home very late last night...(no, not a "double install"!!!) She bought some Harmon Kardon receivers (of which I haven't messed with in years)...The supplied remotes sucked! The instructions for using the zone -2 sucked and it took me a couple hours of embarrassment and frustration to figure it out, and be able to explain to her (so that she could understand) how to get it going... We installed the background speakers & surround speakers--- and at the last minute (a day before we were to deliver OUR components), her "friend in the business" got her (1)Toshiba Projector (HER FRIEND MOUNTED THE PROJECTOR) -- (1) Philips Plasma & (2) HK surround systems!!! Anyway, I bit my lip, and did my best to get things up and running, left the house at 10:45, exhausted bummed & feeling like I just did that for P.R. so we'd stay with her builder... I was afraid if I bitched about it, or charged her for my time (which I SHOULD have done),---she'd run crying to the builder.
It's mostly my fault, as when I got the phone call (@4:30)... I figured, Cool!... I'll just swing by on my way home, and get things going in 1/2 hour or so...no biggie!!! It was only a couple little surround-set ups... should be a piece of cake!!! On top of all of this... when I left (6 f****ing hours later) it was almost as if she was mildly upset with ME --- because the systems (equipment SHE supplied)--- weren't user friendly enough for her... and short of selling her a really good remote with Macros, she had this vibe of.... Hmmm not happy... Even though I was off the clock, and just trying to be a good sport! I will be setting her up with a couple Harmony's... Woo Hoo!

I guess next time I get a call like that I'll just have to ask more questions and quote our hourly rate... Any suggestions would be appreciated, or if you can share any horror stories!!!

Welcome to my world. Typically I come to RC and am totally blown away by some of the high dollar jobs most on this forum do. The biggest job I have done in my almost 2 years in business is 15,000.00. That's right, fifteen thousand dollars.
I make my living off of really small jobs. My market just doesn't support a guy who would only do 25,000 and up theatres. Hell, I have never even done a dedicated theatre.
Here is a list of what I did this past week.

A wireless network with 2 computers, an Xbox live, and wired up a walmart surround witha go video dvd recorder.

Hardwired 12 computers for a computer school.

Prewired a house with 4 cable outlets, and 4 phones.

Trimmed out a house that had 6 cable outlets, and 5 phones.

Wall fished an RG-6 at a condo from the tap mounted on the outside of the condo to the HD box in the basement.

That's it. That was my week.
I have come to the conclusion that you have to spread yourself thin with what you will do. You have to compete with the electricians.
I run allot of wire for 3 different school districts. I have 6 builders that I prewire for, I have a network company that I run cable for, and I am currently working on doing commercial installs for the cable company.
Now you see why I get blown away when I see some of the jobs that you guys get.
If you run your business lean and mean, you can make a good living on 1 and 2 thousand dollar jobs. Then again, I'm basically a one man show. My brother or my 19 year old son work with me when I need a hand.
I think it all boils down to your market area. I do allot of single cable wall fish jobs for 150.00 to 200.00.
I also bid allot of small jobs and don't get them. I don't loose them to a competitor, the customer just decides they would rather attempt it on their own.
Example: a couple of weeks ago I had a customer call me that had hung a 42" plasma, and wanted the cabling moved to a closet that was behind the wall where the plasma was mounted.
He wanted an IR with a universal remote. I was fishing a cat5e for IR, fishing 2 mini 5 element RGB cables, wall plates, jacks, fishing the rg-6 for the DVR feed, selling an MX-850 remote, programming it. My quote for the entire job was 850.00. The guy couldn't believe it was that much.
He asked me for an itemized list of parts . I declined to give it too him, and told him that if he decided to have it done in the future to give me a call.

You can make a nice profit off of an Epson 550, Denon receiver and DVD, Screen Innovations screen, B&W speaker package, and Velodyne sub with all the cabling and Furman line conditioner. Total system price about $7k. The key is not to whore the product out. Put the package together, give a small system discount, and make sure your clients know they aren't buying just equipment, but your service as well.

We sell a lot of systems in the $7-10K range. As a matter of fact I like them very much. In a finished basement I can wire the system, install the equipment, and calibrate everything in 1-2 days by myself. High dollar systems usually mean much more time, and a lot of trips to work out all the bugs.

Give me 3 $10k systems a week and I'll show you one happy person:)

Stanley,

We tried exactly what you are talking about. Spent 5 months trying to sell the exact packages you are talking about for 5k in a very high traffic mall in a pretty high income area. It was a miserable failure.

The only way to do it and make a decent living is to do a high volume and I'm talking two or three a week at least. Figure what your margin would be on that five g's and how long it would take to do that install.

I'm not saying it couldn't work in some markets, but it is a tough one.

We have a company in our area that opened a store in another high traffic mall, selling essentially the same thing and I have been told that they are doing great. But they also spent at least 100k to build the store and do a ton of advertising.

Really look hard before you commit any capital.

Everyone laments that the profits from projectors and plasmas are dropping dramatically. But the fact is since the prices of these products are dropping they are more affordable to many more people. There is constant changes in businesses. We are going to be forced to adapt to these changes if we hope to stay in business.

TVs, for the most part, are becoming too complicated for many people to simply bring home, plugin and enjoy. They need someone to mount on the wall, install a Dolby Digital surround sound system and program a remote control so that they can use it. A company can market itself as a Video Integrater. Someone who will come and and install the video display, the audio system, and computer system into one system that the customer can use and enjoy.

I run a business. I have to pay bills. If a customer wants me to install equipment that he has furnished I will increase my labor charges to compensate for the lost revenue. I furnish no warranty except that the job is done correctly. If he has a problem and I have to come out to check it out then guess what? He gets an invoice for a service call and labor.

The one thing that I will not do are cheap jobs. I will leave those jobs for someone else to do. I will focus on the mid level jobs. Most of my business is now in the $7,500 to $15,000 jobs.

I am lucky in my area we have several big box stores that are trying to get into the custom installations. I have no problem with competing for these jobs with them. When a customer starts to compare prices on certain parts of the proposal I tell them the only line they should be comparing is the bottom line. I have a much harder time winning a proposal when I am competing against a fellow custom installer.

There are some people who will not cater to the new "McTheater" customers. These fellow members of RC are extremely experienced and knowledgeable. They can continue to serve the smaller "elite" market of customers that get $50,000.00 and up for their installations. I admire these people and wish that I had the knowledge and experience of them. But for now, I am going to adapt to the market and concentrate on the mid levels jobs.

Hope this helps,

Dave

I have been working towards a variance of that goal for five years.

I don’t know if $5,000 is realistic but there is profit in mid/low end systems. We sell a lot of $10-20,000 setups; they are much easier to do then the larger custom systems. The key is that they give the customer the benefit of a large custom system but they are NOT custom. Make packages at a few price points and stick to the package, no substitutions. Figure in not just the equipment and basic install but also for the remote programming and calibration of the display and the audio. These are value added services that you can provide that big box stores and many slammers can not. These services make a huge difference in the performance and enjoyment the customer will get out of their system. When you make up the package don’t sell yourself short on what you charge for service just to hit a price point. If you are trying for a $5,000 package and you figure everything up and it comes out to $6,000 either cut on the quality of the gear (not easy at this price) or charge the $6,000 for the system. You need to make as much margin on a small system as you do on a big system. Customers want the same thing whether they pay $5,000 of $500,000. They want a system that is easy to use and performs well for the amount of money they spent. If you can give them that for $5,000 great, just don’t cut your throat to do it.

You should check out Theater Extreme: http://www.theaterxtreme.com/

Their first franchise and main location is literally 600 yards from the new store I am building. Am I worried? Nah, not a bit. Those guys must be good marketers as I read that they are hoping to have 500 locations by the end of the year. LOL! Maybe you should consider being one of the 500?

I just sold another one of my typical systems. 42" HD plasma, bracket, $1,000 reciever, $250 DVD, 5 Disc CD changer, MX-850 w/MRF300, MAX in wall, Panamax 4300, a nice $800 sub with some front speakers, (Reuse surrounds) and viola, A Cash cow. A great system thats easy to control and my clients love them. I'd do 3 of these a week. While they are cookie cutter, they perform well, theyre simple and reliable. Zero frills. I do basic HAA calibration and offer suggestions to make the room sound better. I also ISF calibrate the set. While I don't line item these things, I make the client educated about them and it definately helps differenciate me from my competition. The bigger the job the bigger the headaches.

It seems to me that there are 3 threads here.

1: Is there a market for 5k systems. This sounds like can you install C4 systems? At some point the problem with inexpensive systems is similiar to expensive systems except that there is no profit in the installtion to support the possible problems. Units still fail, clients still need too much inststruction, and it takes the same amount of time to install a cheap projector as a more expesive counterpart. The problem is that although you are selling a commodity system you are installing a low end custom system and you are expected to support it. Support costs money which you either need to charge in the form of time and materials or you need to have it built in to your system profits.

2. When you do a system for free you end up losing the respect of the client. I too have been suckered into doing something in the here and now for the promise of something in the future and all that happens is you get screwed in the present for the illusion of a future possibility. If your builder expects to give away work for free I might ask him how often he does this? It would seem as though he too does not have much respect for you or the work you provide and while I do not doubt that he is a good source of work one does have to question his attitude. If yoiu do good work a builder, archetect or decorator will recomend you. If he asks for free work then he is a scumbag as he would in all probability never work for free. Sure I have sent a bill to a client who did multi hundreds of thousands of dollars of business with me that had only zeros on it. But that was directly for the client not for a friend of his.

The past is prologue. Next time you do a favor do it for reduced rates and time and materials. It will still cost you money but at least you will get some money for your time and efforts.

3. Small systems are always the most profitable. Large, complicated multi hundred thousand dollar jobs seem cool but they rarely make money if you calculate the amount of time you spend on it by your hourly rate. Install a system like OEX just did and you will stay in business for a long time and have a house on the shore like him. I too signed a dream job of sorts this week. 3 chip DLP, 2 way wireless remote and a program rewrite for what amounts to a one way system. No wire to run, no time to wait while construction catches up. A job where you can install and finish within a week is a dream that does not happen often enough. I wish I had more volume control jobs to install.

Alan

Really?

You should do anything that is going to keep gas in your trucks...Having said that I would tell you to that you cannot serve two masters. The high end game is hard to get into and one day you will have to pass on a 100k job cause you are stuck on a 5k job. Here is my beef. I have spent over 12 years working on my craft. I will be dammed if I am going cheap. For those of us who are really good, we put a lot of time money sweat and sacrafice to get here. I used to do the McTheaters and I got tired of selling my soul. Even if it is 5K theater the customer will demand a 50K finnish. In the end you will be giving away your talent to someone who won't pay you what you are worth . I would rather install cable than play with the McTheaters. Here is something to slice your wrist over....Wait till walmart sells the Hisense 42" plasma for 1,000.00.

For the most part, i aree with Audible solutions but disagree that you can't make money on big jobs. We do the occasional small 15k-50k job but the overwhelming majority of our jobs are in the 100k-400k range. If you can pre-empt the likely problems, have the expertise to properly design and install the systems to a high standard, have a large enough team to comlete the work in a timely fashion, have enough cashflow to see you through the odd final payment delays, have a bullet proof contract, have the ability to devote 400+ man hours to a job and still service other clients and the ability to quote acordingly for all the above, then you can make good money on big jobs.

If you can't achieve ALL of the above then it's quite possible you could lose your house in the attempt. The big jobs may seem glorious if your not doing them but the risks are much bigger as well if your unprepared for the reality of doing them.

Simon.

Volume control jobs are simple. No troubleshooting or very limited trouble shooting. No programming to do; no keypads to troubleshoot; no amps to troubleshoot; cable TV issues are not my problem. No issues with artifacts of a 720P cable program appearing on the screen; why can this 20 inch HD display not display anything above 480P? Why can this display not respond to IR commands or worse why does the image seem blue as opposed to black? No firmware to discovermistakes which means call backs or work arounds; Sure Lutron makes A modules but till now one had to hope that what the spec sheet called a magnetic load did not arrive with an electronic transformer; job meetings that go on for days and accomplish little; reprogram and reprogragram and reprogram the lighting system; Finishing that final 10% can take forever--and much of it may be beyond my control. The decorator's cabinet shop is 1.4 years late delivering the box and lift for the bedroom plasma. The designer did not design enough light into the study. The windows cannot be opened and cannot be ceaned. The fancy fixtures from god knows where have still to arrive, 1 year after the client moved in. Landscape lighting has still to be done 3 years after the client has moved in. Thermostats do not power up as did the other 10. Heat issues for the 5 amps in a rack with vents 3 inches above and below and with no side or rear panels. What do you mean the clock inside the processor is drifting so much that it's now a week behind? You forgot to tell me that you wanted me to move the wires, installed the mill work and expect me to move these wires now?

I may not have as much fun but a voume control job is simple, fast and profitable.

The profitability of large jobs depends on how much you charge for documentation ( one large firm told me 100k was their average fee ) what your fee is for job meetings and how often you can not sell a custom system with custom software.

Alan

Stanley,

Your problem is you're too nice. Same here but I've become a bastard about my labor. There are many threads here (sure you can find em") about how the service aspect is what you have to target.

Look at electricians and plumbers. All of their s--t is at Home Depot... their clients are literally encouraged to do it themselves. But after doing the 110 shuffle or flooding their hardwood floors, they call an expert. Said expert comes in at $65-$95 an hour plus trip fee plus fuel surcharge.

I go in without expecting a dime on video. I hate to say it but the Panasonic PTAE900u is a really nice projector. It is WHORED on the internet. I know how to set it up though and if I release that part of the project and sell speakers, electronics AND setup & design at $75.00 an hour period... it seems I can stay in business. Once you gain a clients trust, let them know you'll help them find the best stuff at the best price. It looks good to them when you tell them the plasma they need is at Costco for a great price. Let them get it to the house and you can avoid hernias. This trust is the key to a few other sales but the most important is time. When you give away your labor you are doing something for someone else during your free time... I repeat... YOUR free time.

Personally I like playing games with my kids or snowboarding during my FREE time. I love my kids way more than any customer. Customers are people who pay me money so I can enjoy my FREE time. I enjoy spending some of my free time with the nicest ones over a bottle of wine to celebrate a job well done but while my ass is in your crawlspace or attic... or running parts for you...or ordering stuff for you... or reading manuals for you because I inherently understand the language better then you...or making your system easy to understand... it's costing you $75.00 an hour or you can go f---k yourself. You just gave 6 hours of your life to someone you don't love and wasted free time... Send her a bill for $450.00. If she never pays it you at least get to write it off as bad debt and it saves money on your tax bill... just don't give it away anymore.

Tom Ciara, QQQ, OEX and others have really helped me see this clearly. You can't fight the tide of the industry. Electronics and speakers are next (hell their already given away) and bitching here, while cathartic, does not help.

You work to live... not live to work. Whatever you are installing... be it a 5k system or a 500K system... when you are working they pay you. One of my electrician friends bills an average of 30 hours a week for 46 weeks (takes 6 off)... thats $103,500.00 a year. Since he owns his house free and clear he lives a mighty nice life.

Made me feel pretty stupid when I took 50K in 2005 and worked double his hours.

The more you adopt this mindset...that your time and ESPECIALLY the time of your employees is not free the better life will be. I'm not there yet but things are greatly improving because of this mantra.