Ask the Construction Expert, September 2011

Q: How can I reach new customers to grow a profitable business in this competitive market?

A: Brad Foster had a dream to start a different kind of contracting company. He wanted to build a leading electrical contracting business in Colorado Springs, Colo. and have the best reputation for providing exactly what customers want.

In 1987, he founded Foster Electric Corporation from the basement of his house. He had a small crew and one truck. With hard work, a focused vision, good salesmanship and a desire to offer more services than the typical electrical contractor in his marketplace, he quickly built a successful business.

His company became diversified in all types of commercial projects including retail stores, factories, plants, restaurants and educational, military, medical and government facilities. By diversifying, the business has survived the recession and continues growing. Today, Foster Electric is a full-service electrical contractor serving commercial, industrial and residential customers, with design-build capabilities.

Foster’s company has more than $7 million in annual sales, and their average electrical contract ranges from $50,000 to $300,000. Their largest contract this year is a $1.5 million military facility. The company has now grown to 62 employees, and many have been with the firm for over ten years.

To help his company reach this level, Foster has followed key business fundamentals.

Meet Customer Expectations

Finding out exactly what customers want and delivering it has been one key to Foster’s success. Foster says his business philosophy is to “lead by serving—a leader needs to serve customers, employees, family and neighbors.” He says “your leadership will be exalted” by doing this.

With this strong conviction, Foster asked his customers what his company could do differently from other electrical contractors. General contractors said they needed more than competitive electrical prices and good workmanship. They also wanted a full-service one-stop-shop electrical contractor to handle everything from concept through completion and have their own in-house engineering, design and construction team.

This included developing conceptual project budgeting, attending design meetings with project owners and architects, working with mechanical designers and providing blueprints, CAD drafting, floor plans, symbol drawings, lighting selection, energy management, lighting controls and permitting.

Become the Expert

Foster wanted his company to become known as the master of design-build. With their own experienced design team, technology, draftsmen, CAD software and plotters, Foster’s company can create a preliminary electrical plan, scope of work and conceptual budget. They can also provide proactive value-engineering, suggest ways to improve the project, offer cost-saving ideas, coordinate scheduling and help plan for expansion and technology updates.

Working closely with clients allows Foster Electric to design and build projects within the budget goals and deliver exactly what clients want. Involvement from the beginning gives them the chance to use their knowledge of materials, methods, codes and practices to promote more efficient projects, saving customers time and money.

Never Say No

After ten years in business, Foster Electric started receiving many calls from past customers who were upgrading, expanding and remodeling. These customers needed 24/7 service to hook up new equipment, change lighting, make repairs and upgrade power and controls. Customers also wanted the company to be very responsive, on time, trained, knowledgeable of the latest requirements, neat, quiet, safe and technically capable.

Rather than tackling these service requests with their regular electricians, Foster started a service division that has a full-time manager and dedicated salesperson in charge of growing this business unit. They also added a service coordinator who handles the calls and schedules the crews.

The crew members are drug tested and must be clean-cut and wear company-themed red hard hats, pants, shirts and picture identification badges. And their service trucks are color-coordinated, clean and fully equipped.

Each electrical service technician is on call 24 hours a day and receives ongoing training 20 to 40 hours per year in customer service, electrical techniques, OSHA safety and NFPA 70E standards (the National Fire Protection Association’s Standard for Electrical Safety in the Workplace).

The decision to create a stand-alone division has paid off for Foster. Today, the service division represents over 25 percent of the company’s total volume and has helped them withstand the economy.

Look for Opportunities

Foster recently expanded into residential service work. Rather than starting from scratch, Foster became a local franchisee of CurrentSAFE Home Electrical Services and created a new company division with a dedicated manager and technicians.

This division offers Electrical Hazard Detection (EHD)—testing to locate potential electrical fire hazards in residential homes. They have trained technicians who use sound and infrared test equipment designed for this application.

This business is driven through marketing efforts including television and radio ads and a weekly-hosted radio program called Talk to the Pro.

Continually Improve

Foster regularly attends industry conferences and is an active member of an electrical forum peer group that meets twice a year for two days.

His company management protocol includes a total quality management committee that consists of key people representing each area of the company. This group meets every week and works on evaluating and improving the company systems, job descriptions and standard operating procedures, which are documented in their “red book.”

They also hold a weekly estimating and project management meeting to review and evaluate current and recent bids, upcoming opportunities and projects under contract.

Expect Honesty and Integrity

“Mean what you say, and say what you mean.” This is one of Foster’s favorite sayings. He demands honesty and integrity from his employees.

Foster’s business philosophy is as simple as following the golden rule. He expects his employees to always treat people the way they want to be treated.

Construction Business Owner, September 2011