Fifty four year old high performer 3618 has sold splits and VRF sales to specifiers in this market for an AC contractor with considerable success over the last 20 years.
Some of 3618’s achievements have been:
- Consistently achieved or exceeded sales targets up to £1.5m at margins between 25% and 40%.
- Developed an innovative finance leasing package for clients, thereby increasing sales and improving cash flow.
- Retained most customers for 15 to16 years.
- Has been selling between 250k and 500k per annum to local authorities for more than 15 years.
One chief mechanical officer of a London authority said about 3618’s performance: “It is the understanding of our needs that I like. It has led to working with other people and departments in the authority because of that reputation. As far as this authority is concerned I would rate performance as edging on 5 out of 5.”
So I asked High Performer 3618 for some of the reasons for this success.
James Thornhill
Why is that market such a good market?
High Performer 3618
The good thing about that market is it is just repeated work all the time. They have got countless schools, admin offices, libraries. It’s just a constant flow of projects. I have so many buildings and so many of these places require air conditioning. They are constantly refurbishing their premises. They are constantly building new premises, so that’s why it’s never ending. And everywhere they go, they want air conditioning. So for example, schools, I have done constant work on school classrooms. Take computers in classrooms, whereas years ago, when you and I were at school, we never did that sort of thing in the classroom. But now because there are 30 computers in a classroom, they have to have air conditioners.
James Thornhill
How did you first get into the market and then build it up?
High Performer 3618
I got a project for about £200k I think. Well to be honest, a couple of times, one of the guys in one of the authorities left there and he went to a couple of other authorities, and every time he moves around, he is stuck and he calls me in. So he has introduced me to two of them. So a lot of it is also recommendations as well. But a couple of ones I called cold. They all know it other and it just snowballs like that if you are doing your job properly.
James Thornhill
How do you make sure you are doing a good job?
High Performer 3618
Well it is not only me when it comes to that; it's the actual company that you work for, the people that put the equipment in. You are only as good as your last job. You have to make sure the job is installed correctly because if they mess up then you could lose them pretty quick.
I constantly monitor their work all the time. I go around, not what you call snagging, but as the job progresses, even though I may not be running that job. I call in on the off chance of catching them out or not catching them out to make sure it has been installed correctly.
I also try to make sure the customer is happy and talk to them of any problems they might have. So I am constantly monitoring the standard of work that a contractor does, the actual workmanship of your company. It’s not only from the customer’s side; it’s also from the inflation point of view as well. That’s what Local Authorities look for, standard of work.
James Thornhill
How do the margins you earn on Local Authority work compare with other types of work?
High Performer 3618
They are slightly more contested, because so many people are trying to get into that type of sector. So I guess profit margins are not quite as high as perhaps other organizations.
You have to be aware that if you put too much profit on the job, you are not going to get it. Although they come back to you repeatedly, those people are aware of what things cost. They have got a feel for what a thing should cost, and if they think you ripped them off, they will know about it. They know. So your prices have to be fairly keen.
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