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

1. 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 Professor Architectural Engineering Department Civil, Env, & Arch. Engineering Pennsylvania State University The University of Kansas e-mail: driley@engr.psu.edue-mail: tglavinich@ku.edu Justin Reginato, Ph.D., P.E., LEEP Green Assoc. AssiociateProfessor Construction Management Program California State University, Sacramento e-mail: reginato@csus.edu

2. EC 2020: Strategies for Electrical Contractor Business Development Challenge Shifting Landscape • Energy economics • Boom in line contracting • Recession in building construction • New technologies • New business methods

3. EC 2020: Strategies for Electrical Contractor Business Development Challenge and Opportunity Many 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

4. EC 2020: Strategies for Electrical Contractor Business Development Project Outcomes • EC Business Development Success Factors • Manual for Business Development • Recommendations For ELECTRI, NECA, IBEW, and NJATC

5. EC 2020: Strategies for Electrical Contractor Business Development E.C. Business Development Success Factors • Healthy core business to build upon • Entrepreneurial spirit and skill to build business • Technical competence in the targeted work • Process experience in the targeted business • Knowledge of marketing, sales, and relationships

6. EC 2020: Strategies for Electrical Contractor Business Development 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.

7. EC 2020: Strategies for Electrical Contractor Business Development 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.

8. EC 2020: Strategies for Electrical Contractor Business Development Business Development vs. Sales Selling 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.

9. EC 2020: Strategies for Electrical Contractor Business Development Developing Relationships • Technical: be the best at what you do regardless of the price. • Personal: get to know your clients as people.

10. EC 2020: Strategies for Electrical Contractor Business Development Business Development & the Services Lifecycle

11. EC 2020: Strategies for Electrical Contractor Business Development 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

12. EC 2020: Strategies for Electrical Contractor Business Development Business Development & the Services Lifecycle • Phase 2: Established in the market: • Market specific capabilities to GCs and end users • Hire an aggressive and smart Business Development professional • Brand matters

13. EC 2020: Strategies for Electrical Contractor Business Development Business Development & the Services Lifecycle • 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

14. EC 2020: Strategies for Electrical Contractor Business Development Business Development & the Services Lifecycle • 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

15. EC 2020: Strategies for Electrical Contractor Business Development The Basic Economics of Biz Dev • Know your close rate • Estimate how much a biz dev professional would cost Scenario: • 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

16. EC 2020: Strategies for Electrical Contractor Business Development The Basic Economics of Biz Dev • 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

17. EC 2020: Strategies for Electrical Contractor Business Development Recommendations • 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

18. EC 2020: Strategies for Electrical Contractor Business Development Project Timeline We plan on completing the research and sharing our findings at the 2013 NECA Convention in Washington D.C. this fall X – July EI Mtng X – NECA Convention X – July EI Mtng NECA Convention – X

19. EC 2020: Strategies for Electrical Contractor Business Development Team David R. Riley, Ph.D.Thomas E. Glavinich D.E., P.E. Associate Professor Associate Professor Architectural Engineering Department Civil, Env, & Arch. Engineering Pennsylvania State University The University of Kansas e-mail: driley@engr.psu.edue-mail: tglavinich@ku.edu Justin Reginato, Ph.D., P.E., LEEP Green Assoc. Assistant Professor Construction Management Program California State University, Sacramento e-mail: reginato@ecs.csus.edu