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How To Break Into The DDC Market

Originally published: 09.01.07 by Kevin R. Yeanoplos

DDC technology can help clients and yield energy savings

Need a few good reasons to get into the direct digital control (DDC) game? There are plenty. DDC technology is good for business and good for the bottom line — both yours and your client’s. DDC technology can help clients improve operational and staff efficiency, while netting building owners some pretty significant energy savings.

According to the Building Owners and Managers Association (BOMA), the commercial office building industry spends $24 billion annually on energy — the single largest operating expense for building owners. This is one of the many reasons DDC technology is making such huge gains in the hvac field. DDC technology allows users to program and monitor energy-saving strategies based on low occupancy, low demand, and other criteria.

The following six steps serve as a primer for DDC.

Select a reliable product and supplier. Sound easy? It may be harder than you think, particularly, if you have no previous building-automation system experience. Unfortunately, many of the major players in the DDC field are manufacturer branch offices. As such, they may not be anxious to help you become their competition. Many other manufacturers allow only one contractor to handle their products in a

geographical territory. As expected, many of the most fertile territories are spoken for already.

Don’t be discouraged. Some major hvac manufacturers still distribute through authorized systems distributors. These distributors are anxious to partner with qualified independent mechanical contractors who can provide installation and service. Seek them out.

Make a commitment. Are you serious about the DDC market? Being successful requires a serious commitment similar to the one you made when you first went into business. Certain “tools of the trade” are just as necessary to the controls business as a refrigerant- recovery machine is to the refrigeration business. To start, you probably will need notebook computers, manufacturers’ engineering and commissioning software, interface cables and commissioning devices, and of course, training. Many distributors offer low-cost training, locally held training, and discounts on necessary tools to help contractors get started in the business. A good distributor partner will help identify these tools for success. 

Train your people. Training is absolutely necessary in the DDC field. Many distributors can help locate factory training for you. A few others hold training in their own facilities. In my experience, not everyone is cut out for the controls business. The same probably is true in your company. Identify one or two employees with a special interest in the controls segment of the industry who are willing to take the extra time to learn DDC systems. In my company, we have found it almost impossible to learn the products, systems, software, and hardware while on the job alone. Our most successful contractors have realized the same.

Promote your abilities. After you have made the investment, identified the lead players in your firm, and completed training, it is time to market your capabilities to your customers. If you don’t promote your newfound niche, customers will never know it exists. Too many times, contracting firms fail to break into the business because they do not know how to market their expertise.

Potential DDC applications include buildings that require remote monitoring and control due to an offsite maintenance staff; multiple-location facilities managed by a facilities manager or maintenance department; and clients looking to trim energy costs. 

DDC opportunities are everywhere. Employees are your offensive line to break into the market. Train them to uncover potential applications. In addition to employees, your distributor partner should gladly help promote your business to your customer. After all, his success depends on yours.

Expand your services. The DDC market can open your business to new profit centers. Supplying and servicing building-automation systems can lead to many related profit opportunities, such as, monitoring contracts, service and control tune-ups, and add-on graphics packages. As you gain experience and confidence, you will begin to feel more comfortable offering these products and services to your customers. In our local distribution area, three contractors have developed fully self-sufficient building automation businesses or control divisions.

Avoid the myth: “DDC is only for manufacturers.” Manufacturer branch offices and geographically licensed control contractors have dominated the DDC business for so long that many mistakenly believe they are the only source for DDC products. Don’t succumb to the myth. Together, with our local independent contractor friends, our firm has successfully supervised over 1,000 building automation systems. Many end users prefer working with a familiar contractor who knows their equipment and already services their facility. Installing and maintaining a building-automation system is a natural extension of an already trusted relationship. 

About Kevin R. Yeanoplos

Kevin Yeanoplos

Kevin Yeanopolos CPA/ABV/CFF, ASA, is the Direstor of Valuation Services for Brueggeman and Johnson Yeanoplos, P.C., a firm that specializes in the areas of business and intellectual property valuation. He currently is serving as a Commissioner on the American Institute of CPA's National Accreditation Commission. He is a frequent lecturer on the topics of business valuation and applied finance.

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