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Discussion Starter · #1 ·
A good friend of mine is an accomplished audio installer, in fact, he does tremendous work.

He has his own company, but he approached me (because I have a pretty impressive knowledge of video, wrt non AVS'ers) to join him in forming a low overhead business with him, desiging, selling, installing, and calibrating home theaters.


One of the main reasons he wants me to help him is because I know about the low cost alternatives to the "Runco Shops" that pretty much anyone can afford. (anyone meaning someone who is already in the market for a big screen and bose system)


We have been discussing the possibility of setting up packages, with projector/screen/audio/cabling/installation at $x,xxx. The idea seems rather interesting to me, and I think it would be a lot of fun. It's long been my dream to do this, and he has experience with the audio side of it, and I have about 6 years of experience with consumer electronics (primarily in the RPTV world).


I'm not sure that we'd make much profit selling these, but some is better than none, and we'd probably make the majority of our money on installation, and calibration.


It was also suggested to have "viewing parties" of sorts, where people could come to see the budget projectors in a controlled environment, and be free to fiddle with them, and watch their own material on them. This seems to be something that is missing in the A/V world. I'm trying to fill a niche where I see it developing. If this is successful, I'd likely take this approach on the road. Obviously it would be a no pressure, sales pitch free type of thing. I'm sure that it would generate some business, but I'm also sure that people would come to see the projectors, and screens... and then buy them cheaper elsewhere. Nothing wrong with that, just the way the business works sometimes.


That said, I'm strongly considering becoming ISF certified. I need to get in touch with Joel Silver, and see what all is entailed in that process. I know there are seminars occurring in October relatively close to Indianapolis (Nashville, TN) and I am planning on attending that so I can learn more about video in general.


This "hobby" is more or less a passion of mine, and this is where I want my career to be. This seems like a reasonably positive step. Even if this venture is a complete failure, I'm certain I'll learn a lot of valuable things. That's what failure really is anyhow, isn't it? An opportunity to learn?


If anyone has any comments or advice, I would love to hear it.

I respect the opinions on this forum more than any other source in the A/V world, so please tell me what you think.


Thanks
 

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I've considered almost the exact same thing. It too is something that I think I would really love. But, I'd have to be able to make a living at it.


My thought also was to create 'packages' using normal "mere mortal" consumer gear ie: Best Buy, and z1/x1 type projectors. The idea was to offer a great package, and try to make about 1K profit on the whole install (audio video, ceiling mount, cables, etc). I dunno that may be too much... but if you figure that it would realistically take a full day at least for an install, and that there would be only so many installs in a month... you'd have to find some way to make enough profit on each one to put food on the table.


The idea is, word of mouth would spread and your volume would increase. Also a yellow page ad reading something to the effect of "why buy a xx" 'Big Screen' when you can get an 8 foot screen for the same money!"


Basically, your post is almost word for word, the same thoughts I've had. (minus the certification part)


If I were to try this, I would have to start out on the weekends, and keep my full time job. Once I worked the bugs out, and if it grew, then i could consider it full time.


And i too would love to hear what other's thoughts on this idea would be.


I'm also curious how or from where an installer, could buy audio equipment wholesale? If you're installing 4 a month, there has to be a better source for Kenwood, Sony, or Denon receivers than BestBuy...


-Jason W
 

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Discussion Starter · #3 ·
There are distributors who sell directly to small businesses at reduced prices.

Also, pretty much any commission based store would sell you equipment at good prices, if you were to be a frequent buyer. As a commission based salesperson, I know I would.


Imagine, a product with $300 profit in it, could be sold to you at a $150 discount, putting $150 in your pocket. That's pretty low margin, but again, some is better than none.


I know my audio installer friend has a lot of distribution channels, but often buys locally from a high end shop in town, because he gets reasonable prices, and he gets a lot of referral business from the salesman.


I honestly think this could be a successful business, given proper marketing, and superior customer service. I'm fairly excited about the prospect.
 

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ISF certification can be a usefull marketing tool, but you'll end up having to explain what it is to 90% of your customers (entry level HT purchasers) which kind of defeats the purpose :D . There is a ton of information available on the net for free, just not as neatly organized. I'd recommend the calibrator forums on The Hometheater Spot. The money you would invest in ISF certification could then be invested in good calibration equipment (analyzer/signal generator). If money is not an issue then get the certification, you'd not only get a focused introduction to what calibrating is all about, but get to network with people with similar interests, whcich may turn out to be the most valuable.
 

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Quote:
Originally posted by Kidd Digital


I honestly think this could be a successful business, given proper marketing, and superior customer service. I'm fairly excited about the prospect.
You are correct, it could be a pretty successful business.

However, the key is customer service.

Just some food for thought ...

You are targeting the HT enthusiast who wants the home theater but would rather give you a few hundred bucks to install it rather than doing the (quite simple) job himself.

Now, consider this same "lazy" person pops a lamp ... or his kids fiddle with the user menu and adjust colors ... or he decides to buy that fancy new DVD player the Jones' next door have ... or he gets a power spike and now the unit won't turn on ...

They paid for your services because they didn't want to get their hands dirty and they will now call on your customer service.

The $20 in gas to get out there, and half a days lost work just burnt up half of your profit.

And can you imagine if you installed a Sharp M20X that had a power fail issue like so many had ... so you would need to go out, remove the unit, send it into Sharp for firmware upgrade, go back out and re-install.

Or a Sony HS10 with the lamp problems ...

Or a Infocus X1 that has a dead mirror you hadn't noticed on install ...


I am by no means saying it can't be done. I am just throwing some stuff out there to consider.

For it to work, it will more than likely not be a situation where you go out with $1500 worth of gear, sell it for $1800 and go home happy with your $300 for a days work.

Customer Service will be the key ... and with FP ... that isn't an easy task.
 

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It could be successful.

My business is customer service oriented with on site service so I can tell you this, you have to charge for service calls. If someone fiddles with the settings, it isn't your problem. If a lamp blows, it isn't your problem.

If people want on site-customer service, just be up front and tell them your minimum charge to come out is $49.

I will say that since you are dealing with really inexpensive equipment here, mainly a do -it yourselfer won't need these kinds of services but then again since it is so cheap it doeasn't look that bad to get the whole thing installed.

It's also going to be difficult because you do not know the logistics and cabling needs of each job so there's no way you can really do flat rate pricing.

Of course your worst enemy when starting a small business will be the government. The best thing is to work on the side for a while otherwise you will be doing alot of ankle grabbing.
 

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I am also considering this "career mode". However, I think you have to understand your target market. A lot of people in the "low end" / entry market are there because they have limited monetary resources or want to experiment themselves before making a bigger commitment. I think your margins will be very small versus a lot of the "best buy" places around a typical city. Ultimately, the question comes down to "will people pay for service?". I am wrestling with that as I know alot of people who have "plunked" down sizable amount of change ($3-5K) for equipment and have not had any one help them set up. They seem happy with their purchases yet in a number of cases, from my view, it is performing below its capabilities. You know some of the cases where people don't even "de-adjust" their "factory settings" for brightness / contrast on their $3k "flat screen" even though they usually know about the adjustments and in some case about the setups on THX discs so they don't even need "special equipment".


A number of people are on forums like this to get a feel for things so that they can "fiddle" themselves. This leaves me questioning how successful the business can be (ie. struggle to make a living from it). Having said that, from a job market perspective, service seems to be where it is at in terms of opportunities these days. So I figure if you "bond" enough services together, ultimately you will be successful. So if you take HT and bond it with audio setup, in-house LAN / HTPC, home automation, sat service stuff, along with some custom installation, you will have plenty of avenues into the "average home" going forward. You don't have to offer all at the start... your idea of audio and FP is good for starters. The idea about having "special days / evenings" where people could come in and experience a "proper" setup is very good for getting business. Bonding with a person who already has a "toe" in one of the principle elements (audio) is also good.


On your query about ISF "certification", I ask this question to one of the "middle to high end" stores in town. The proprietor said that they had one person on staff who was certified but that in general he didn't find much demand for it because of the amount they would have to charge in terms of sending a guy out with equipment ... a minimum of $300-$400 dollars which he seemed to indicate most people weren't willing to pay.


This is from a canadian perspective where it seems a lot of people are still pretty conservative but also there availability of stuff (high tech. toys) is limited unless you bring things in from the US... which is usually another "battle" with customs and the crazy charges that appear on things.


Having said all of the above, I am hoping to head in this direction (HT systems / sales / installation / service) over the next couple of months so I wish you all the best.
 

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I too have considered starting my own little custom install/low overhead business with a couple friends based out of say my house.
 

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IMO, it would be very difficult to make a living doing what you describe.

You have to do the big jobs to make good money.

There just isn't enough margin on the lower priced items to make a living out of just the low end stuff. Being small means buying from distributers, which means lower margins. You'll have to be competitive with the likes of Best Buy and Circuit City and the internet, which will cut into your profit even more. That really just leaves the install to make your money. And if it's a small system, there just won't be that much in it.

You'd have to spend a good chunk of money advertising and marketing also, so that the people who don't want to spend more than $5k will find you.

I'd suggest starting with it part time, doing jobs on the side. You may try talking to some custom installation companies in your area to see if you could work as an outside salesperson/consultant (commissioned).

Talk to your friends and family and get the word out that you will install systems.

Maybe start by offering to help people put together a good system (tell them what to buy and where the best place to get it is) and then install it for them.

Make up flyers and hit some areas where new homes are going in. Talk to the builders themselves and the new home sales people.

Just some thoughts from someone that is doing HT's on the side. (Since working for MCI isn't exactly stable!!) ;)
 

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Me too, I was considering doing this after work hours at first and weekends. This should work out because most clientele wont get home tell after 5 PM anyway. I was considering not selling products at first. But just hooking-up wires and programing remotes and such.


What would one charge for doing basic (average) 5 speaker home theater hookup?.


Ive done this for friends and family but never asked for money. I was usually offered Beer&BBQ for helping.


Rick
 

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I had this same idea last year. As a matter of fact I registered a domain name of extremehomeentertainment.com. Never really got anywhere with it though. I even discussed this with VP of Home Entertainment from Infocus.


My target customer was the average Joe who already owns a tv, and is shopping BB or CC with plans to upgrade. Most of these people do not have space for a dedicated theater room. I planned on doing inhome demos where I would bring a projector, screen, DVD player, and complete sound system, all of which I would sell as a package (incl. installation) or break it into pieces. The beauty of this is exactly what the prospect saw and heard would be exactly what he got. There would be no surprises.


My stumbling block was installation. SO may variables when it comes to running cables in ceilings and walls, not to mention you need to be or have access to a licensed electrician to install a power outlet in the ceiling.


I still am trying to figure out a way to may eXtreme Home Entertainment a viable business.


I would highly recommend a thread is this same forum titled Sales Snobs, stated by Bowls 300s on 12-17-02. It starts out discussing poor sales people and adds quite a bit of information/ideas concerning turning this hobby into a business.


Good luck.


Feel free to PM to discuss this further.



patrick
 

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When I think about how much trouble we were to our dealer (sent back three M20Xs and then spent a lot of time with HS10 issues, all on ONE sale) there's no way I'd want to have to deal with people like me on a mass scale.
 

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I have discussed this with a number of folks, and there must be a way to make money with this business.


The crazy thing is that we have items that retail for between $1000 and $5000, with accessories, and no one wants to enter the business.


My idea was to stock a small number of items that are mostly very low cost, carrying one or two higher cost items only.


The packaging idea is a good one. Charging for service and installation is going to be necessary.


I don't think you need ISF certification. It is not that hard to set up a projector well. The fancy stores around here that have ISF's do a terrible job of adjusting their demo machines.


My name ideas were "Home Theatre Value" or "Cheap Thrills Home Video" or "Flicks Home Video". I would carry Infocus, Sanyo and NEC, perhaps a DILA at the high end (no one else does). Onkyo sound systems, DaLite screens.


I would open only at certain times, nights and weekends.


You can package a complete system for $2000 these days. That is less than many RPTV sets not including sound systems or DVD players. I would write up a short document about installation and setup of the specific gear being sold.


Around here (Palo Alto), rents are very high but there are a lot of vacancies. You would have to find a helpful landlord.
 

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Hello:

All the above comments are right on with regard to starting a small business especially those about servicing the product.

For what it's worth: In any business there is always the question of price(profit) vs volume. If you have a low priced product it better be extremely reliable or the service costs will kill you. I have been involved in new product design all my career and it seems the conservative approach to product pricing is always taken.

You have to ask yourself why do the A/V houses charge high prices for their efforts?

I had a salesperson at a "business presentation projector house" tell me they didn't sell HT projectors because they couldn't afford to spend the amount of time most HT buyers required and make money. Their market was the business man who was going to make a presentation, needed a projector immediately and could be sold one in an hour.

Regards

Richard
 

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Alright, here is a test I conducted, and I think it would be a great idea if you tried it yourself.


Since the idea was to package a complete audio/video system, I went to CC and bought the Onkyo theater package for $499 (5.1 receiver, 5 speakers and a sub). To my ears, this audio system provides the best sound for BOTH movies and 2 channel listening for the price.


I hooked this up in my theater (X1 projector, TimeWarner cable), then went out to BB and CC and tried to talk up a few people about alternatives to the bigscreens they were checking out. As the conversation progressed, and if I felt comfortable. I would invite them over to my house to check out what I had to offer. Only had one taker out of 4 people I talked to. He was extremely impressed with the picture and sound, but said he did not have room for it in his house, and did not like watching with low or no light.


I think it may have gone better if I had demoed they system in my family room, or just brought everything over to his house and demoed it there.


On a positive note, 5 firends who saw my X1 in action have since bought one.


So, go down CC and BB tonight and talk to some people. It can't hurt!


patrick
 

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It's going to be very hard trying to sell services to the type of consumers similar to members on this forum. People that buy X1, Z1, PT-L200U tends to want to do their own installation and calibration. (Most of us are cheap DIYers.)


You won't be able to make a living competing with the BBs and online retailers selling hardware alone. You will probably be more successful selling to 'less educated' (for lack of a better term) consumers.


If successful, you guys might be the ones who bring front pjs to the mass market. Right now the mass market shys away because they think either this is 1. too expensive or 2. too difficult. If you can close the gap on #1 and take care of #2, there might be somehting there.
 

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Kidd...


Let me share some experiences with you, and what I have experienced.


If you want to make a living selling products with little to zero margin you are looking under the wrong rock.


Presently I am doing some good business but my expectations are more on the fun side of the equation.


The market at the low end ultimately ends up losing money. Many people will purchase from you if you are providing a good service but on the low end but most do not realize that some, and alot of projectors are being flipped at a 25 to 50 dollar profit. The assumption from the consumer is that if they can do it.. so can you. With any product now selling under 1500.00 there is no margin to work with and generally you better be prepared to compete with costco, Best Buy, and now even the manufacturer.


Capital requirements... with any home theater product/ non business projector you generally have to buy one to show and one to go. The product does no good to you personally as you will not have any time to view. Some will require a commitment of x number of units with a standy letter of credit guarantee. Unless you can make this commitment and be able to finance and demonstrate as such you will not be able to compete in price. Factor in the price of the demo units... how many you have to sell? and what your real margin is after the unit is now a demo... If you only have one product it will look bad for your business. Seriously take a look at your purchase price and the price you can sell it for competitively. You will have to be able to match or better the price. Retail stores count on the ignorance of consumer. Not all but many do. You hear the backlash of people here all the time when price is goofy. Expect that the lack of controls on price and internet shops flipping the product to be here for quite some time. The DLP chips get sold to manufacturers on a set volume price. They have to meet those targets or face a huge penalty.


Time.... This cannot be done on the side. If you are charging substantially more for the product than others your business will not be able get off the ground and will take some serious battering. On a particular product that is highly praised here I get an average of about 27 emails a day from people that did not purchase the product from me. They bought it were they perceived it was the cheapest. Even though I offer the best rates they succumb to the pressure believing it to be better to buy from Costco or Best Buy. Post the sale they have no clue as to how to set it up, and ask technical questions that the other venues do not have a prayer answering. Many of the emails are not simple questions. They require detailed mathematical responses and precision detail. This takes time. Alot of it and if you hope to be successful from the post sale you better be prepared to spend your time answering it. I was told by a manufacturer to just tell them they didnt buy it from you so tell them to FO. I cant do this. I spend aproximately 87 to 92 hours per week. I make 22% the amount of money I would make if I went back to my profession. I have a 45% discount with the courier company I use, and so I am shipping quite a bit each and every day. Make sure when you allocate your time you do include the amount of admin to do this as well.


Doing it on the side... I recommend that you take the necessary steps to make sure that everything you do as a business is legit. Processing and remitting taxes. You cannot bypass these steps as was previously suggested. That is a recipe for disaster, and your personal liability will be at stake. This is the most competitive market I have seen. You will get sold out for a few dollars. Will you be able to sustain the activity as fun when this happens. The major competitor is someone that does not care about the product if it is a business projector. They have 100's of other products that are providing 25 to 50 dollars a transaction.


Good luck to you... whatever you decide.


It is alot of fun. Most fun I have had. I was financially set before starting the business though. The initial investment was about the mid 5 figure.


You would know the market better locally. Is it enough to sustain a business over the long term? The business model for this activity is drastically changing.


I hosted an event in April where over 70 people showed up. It cost approximately 800.00 to fund it, and about 70 hours of work to prepare for it. Some people did purchase items at a later date. Most shopped for the items on the internet and made purchases using that venue. It was not a sales event. It was an event to gather data from people viewing so I could listen, and get a feel for what people were looking for. Very invaluable to me. The local market here is dismal and will be most probably the easiest to crack. But it will also take a huge amount of commitment in time. The requirement for taking on people that will devote their time and have a passion for this at zero dollars is slim. All one has to do is go to most of the retail or store front operations to see how difficult it is to get good help.


I am going to continue on with my business and keep it expanding. One advantage I have is that I was a VP Finance before starting this business. I know all the ropes for shipping internationally, and have quite a few relationships that assist in the development and desire to keep the business growing.


My suggestion is to try and do a cash flow and see if you can actually live and keep it fun with the expected realistic cash flow. If the requirement is that you make more or the same money you do now to sustain the fun ... I think you may be looking under the wrong rock at the present time.


Just my .02. Don't mean to discourage you. If you are doing it for fun ... its great. If you want to make a living at it be realistic on what time, money and effort you can put into it. If the business was lucrative you would not see the market in a position it is in presently. Products being sold for near zero profit, by internet shops, (some of which do not even have anyone physically behind it) and some of the people that have gotten into this business and are so desperate to turn a bit of profit that they have to sell the equipment to flow at least some cash flow into the business. These businesses are floating like lead balloons.


Good luck whatever you do. Running a business is not a hobby. The tougher it is the more I like it. This is an extremely difficult business to be in. Make sure you are prepared, realistic, and ready for the amount of time, commitment, training, financing, and dedication it requires.
 

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.

.

This question, or some similar variation, comes up quite often. It is obvious that this topic is of some interest to many folks.


These responses have to be some of the most informative and thought provoking I’ve ever seen addressing this question! This is great information from obviously intelligent and knowledgeable people. My hope is that this thread does not “roll off†the front page only to become buried under a morass of other stuff. :)


Thanks for sharing your knowledge and experiences –


Alysa
 

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Discussion Starter · #19 ·
Yes, I agree.

Thank you guys so much for all the insight.


To address a couple of things...


#1.

I would never go into BB or CC and try to solicit business from them. That's wrong. I sell A/V at the retail level right now, and I would throttle someone who tried to do that in my store. It's just not cool. I might however, buy some billboard space outside of BB and CC, and do a bit of creative marketing, showing what $4,000 can really get you.


#2.

I am definitely aware of the fact that this won't be an easy thing to accomplish, but this is absolutely the business I want to be in, in whatever capacity, and I think that even if the business fails miserably, it's the best way imaginable for me to learn more about different side of the business. I have a couple of other career options open to me at this point, staying in the A/V field, but this is the one that excites me the most.


#3.

Margin is definitely going to be one of my biggest problems.

I have a few ideas regarding margin, and how to maintain it though. I'll probably do several installs where an RPTV is used. That being the case, I have a channel where I can get pretty much any brand RPTV I want at a very decent price point. I'll be able to easily get 25-40 points of profit out of the high margin RPTV's.


All of this is still very exciting to me, and I fully realize that I have a long road ahead of me, but I'm eager to get underway. I really think this will be a positive step for me, regardless of the outcome.
 
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