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GM is globaly defined in finance as gross margin.

That profit window is not what someone actually put in his pocket, wheather you work for your own buisiness or a corporate, actually is what money goes into your organization account.

You have to deduct various project cost, expences (gas,tickets accomodation), labour cost, rents, bills etc.
There you have a net cost where usually (depends on country tax method), you get taxed and you also then deduct taxes.
Corporates on top use to allocate other costs, but lets not expand..

Anyway any percentage may seem enormus to field engineers, but when it comes the end of the year and you count your pocket money that GM goes off the fly....

Its seems to me that a good definition of Gross Margin is needed before we start talking about percentages.

Originally Posted by miller_elex

elaborate some more.... no need for company names... 50% of gross margin? Did I read that right? Isn't 8% more realistic?

The company I was working for wanted 42% GM!

Personally I think 8% is great.

Dazza

Originally Posted by flange

was the lead guy for a controls company local branch office....

elaborate some more.... no need for company names... 50% of gross margin? Did I read that right? Isn't 8% more realistic?

was the lead guy for a controls company local branch office that wanted to do mechanical. sold a lot of work and did quite well by mechanical standards. when they forced my hand and wanted 50%gm, work slowed. the good news is that i no longer work for them, but run my own company where we do both.I try to sell the whole project, and decide on house where and how we execute. sometimes we do the controls, other we sub em out, depends. in the end though, they work to my standards or they get fixed.

My company has a control only installation crew and a Mechanical / controls service crew. It works out fine.

Originally Posted by miller_elex

Controls sub from mechanical contractors, and not the other way around, for good reason.

Electrical contractors sub from controls contractors and not the other way around, for good reason.

Now if a mechanical contractor wants to have an in-house controls division, and controls wants to hire electricians who wire controls, be my guest, that situation is going to work out. Butt fer Gawdssakes, make sure it is a mechanical service guy doing the computer and an electrician doing the install.

Controls sub from mechanical contractors, and not the other way around, for good reason.

Electrical contractors sub from controls contractors and not the other way around, for good reason.

Now if a mechanical contractor wants to have an in-house controls division, and controls wants to hire electricians who wire controls, be my guest, that situation is going to work out. Butt fer Gawdssakes, make sure it is a mechanical service guy doing the computer and an electrician doing the install.

I actually run a service division that does both controls and mechanical. While we are a controls business at our core, we needed to diverisfy some of our opportunities to be able to provide additional value add to customers who don't see the line between controls/mechanical, but rather just HVAC and to fend off being locked out of an opportunity where a mechanical would say they could do controls. I suggestion is to focus on what you want to go after and work on the bundle. If you need mechanical help, you can always find a friendly mechanical to assist with some of the heavy lift that your staff may not techanically have yet or are willing to invest in yet. Its all about providing value to our customers and being able to make money!

Puke

Controls only companies make me what to puke.

if you are doing controls work for other mechanical contractors, you become competition and they might not use your services anymore. If you are working direct with customers its perfect you get both sides of the business

I work for a company that does only controls. I often wish it was otherwise because, as someone else mentioned, the customer will call one, only to find that he really needed the other!

It will give you a better understanding of what you are trying to control.

we are commercial refrigeration. We do both. It's almost impossible in supermarket work to have a separate controls company. coordination, technical expertise ect. And the customer most importantly only knows the system is not working. How would he distinguish whether he has a controls problem or a mechanical one? So one or the other comes out, and finds they need the other. That is ridiculous.

In our world the controls and the mechanical are from the same shop. I personally don't see how some shops are only one or the other. I am our primary EMS guy and most of our crew are well versed in diagnosing and replacing controls. Be it an actuator with a 4 to 20 signal or whatever. What does get a little dicey and why I am always available is when they start to try and seek out the sequence of the controls. And once we get that out of the way they are well on their way. We do a lot of freeq drive stuff, a lot of lighting of all kinds of different strategies and equipment. A lot of HVAC. Anything and everything. IAQ, pressurization, economizing, ect. And most of we do a lot with rack refrigeration.

We do controls, mechanical, install, destall,service,pick u up and take you to the grocery store. We found that taking on controls was a necessity, to better serve our customers, because we have been left high, and dry, by local "control companies" when we needed them the most. We relize that stuff breaks at night, during the day, on holidays, and weekends. Try getting a local control contractor to respond then.....

I work/worked for two different companies that do just that. I did commercial service for 7 years and controls mainly for the past 5. Here's the deal - If you really want to get into service go hire a good mechanical service guy. Make sure he is good and is willing to teach and wants to learn controls. Now make sure that your controls guys can get along with him and each other, make sure he seems like a good fit. Now if you have any of your controls guys that are interested in doing the mechanical side have them hang with your new guy and send them to school, in house, online, community college, vendor sponsored, ojt, etc. You need to get started on the right path and hiring some one that knows service would be a great place to start. You want to be able to build a team that can work off each others strengths. Think about it - if you have a team that respects each other then when a question/problem arises then they can glean off of each others knowledge and provide the best solution for the customer - controls guys asking mechanical guy how something is supposed to work so they can build the right application, or mechanical guy asking controls guy parameters to adjust to fine tune the application.

I garauntee thats the reason it didn't work. Honestly whats not good about it? If you have an HVAC issue you call in 1 guy and he can do all your service wether it be a mechanical issue or control issue. I also think its a trick to find the right guy who has the control aptitude and mechanical aptitude.

In my area it has been tried and hasn't worked.

In my opinion, it is because the local controls contractors haven't been willing to invest the time and money it takes to build a mechanical service business.

That is the situation I am in right now. I have been a Mechanical Tech for 9 years. Last year I got hired by a controls company. Now I do both controls and mechanical. I am now set for life

Originally Posted by hvac17011

what is your opinion or experience in a successfull controls company getting into mechanical service side of business.

I think it's a great idea. Controls is/are the future and the mechanical company that get on board will be a head of the curve.