Holiday Light Electrical Safety & Energy Saving Tips

During the holiday season it is important to remind your customers to heed safety and energy conservation while enjoying holiday festivities. Electric lights and candles warm our hearts, but they can turn holiday cheer into tragedy if they are not handled carefully. Here are some valuable safety tips you can provide to your clients.

Electrical Safety Tips for Holiday Lighting

• Be sure all holiday lights have the Underwriters Laboratories (UL) label, which means they meet UL safety standards. Be sure to buy the right set, either for indoor use, outdoor use, or both.


• New, light-emitting diodes (LED) holiday lights use much less energy than traditional lights. Consequently, they do not become hot enough to burn fingers or catch trees on fire.


• Before installation, check for frayed wires, damaged sockets, or cracked insulation. If you find any defects, replace the entire light set.


• To minimize fire and shock danger, make sure there is a bulb in each socket. If a bulb is burned out, leave it in until you unplug the light set and replace the bulb.


• All outdoor cords, plugs and sockets must be weatherproof. Also, make sure there is a ground fault circuit interrupter on each circuit.


• Remember that hot bulbs can ignite dry tree branches. To avoid damage and injury, keep trees well watered and keep extension cords and light strings away from the water.


• Keep a working fire extinguisher handy.


• Be sure your home’s smoke detectors have new batteries and that they are working properly.


• Don’t overload your electric circuits or extension cords with too many light strings. Don’t connect more than three light strings. The cords could overheat and start a fire.


• Never leave lighted candles unattended. Responsible adults should monitor them at all times. Do not light candles on Christmas trees. Properly installed electric lights are much safer.


• Always unplug holiday lights before going to bed or leaving the house.

Some Holiday Lights Are Energy Hogs

If you’re a fan of those old-fashioned, two-inch (C-7) bulbs for decorating, keep in mind that they each use about five watts of electricity. According to the U.S Department of Energy, lighting six, 100-light strands of these large bulbs around the clock for 30 days costs more than $18, based on an average of eight cents per kilowatt hour.

A more energy-conscious choice would be the miniature white or colored lights. Miniatures use only about half a watt each.

Even less costly and more efficient are LED holiday lights, which use .04 watt per bulb. Over a 30-day period, lighting 500 LED bulbs would cost about 19 cents. Operate lights for no more than six hours a day to keep energy use under control. Timers make this simple. If you are building a new house, ask your builder or electrician to install holiday electric outlets which turn on and off with one easy switch.

Guarantee Profit in the New Year

With 2007 quickly approaching, we thought it would be a good time to address your profit goals. How much profit do you think you should you make? Your answer is probably one of the following: “5%,” “10%,” or “15%.” Or it’s possible that your reply is “More,” or “As much as possible.” None of these goals is a clear target.

A recent survey of over 2,500 construction company owners showed that:

• 66% of companies have NO specific profit goals
• 70% of companies have NO overhead goals
• 50% of companies have NO sales volume goals
• 92% of all company employees have NO written goals

Shoot for nothing, hit it every time!
Most companies shoot for moving targets by attempting to make ‘as much money as possible’ or ‘more’ than they are currently making. ‘As much as possible’ is not a target. ‘More!’ More than what? These are not clear targets or goals. 5%, 10%, or 15% are not clear targets either. As your sales and job costs vary each month, your total markup earned changes, while your fixed cost of doing business remains the same. This causes your net profit to move up and down like a roller coaster.

A specific annual sales target of $3,000,000, an overhead target of $400,000 and a net profit goal of $120,000 are specific fixed targets you can shoot for and hit. Not, “More!” And not, “As much as possible!” As 2006 draws to a close, it is time to ask yourself:

What is your annual sales target?
What is your annual overhead budget?
What is your annual net profit goal?

Always make a profit!
The goal in business is not to stay in business or keep your crews busy. The goal of business is to always make a profit. According to a recent study, companies who have specific strategic plans with clear targets and goals make 33% more profit than companies without targets. And only 33% of all contractors actually make a profit every year. Additionally, 92% of all business owners reach age 65 with $0 net worth! It’s not how much you make that matters, it’s how much you keep (after overhead, job costs, staff, and a fair salary for the owner).

Run your company like a business
Very few small and medium size general contractors actually run their companies like businesses. A “business” has a business plan, sales goals, job cost goals, an overhead budget, and profit goals. A “business” pays its president or owner a fixed and reasonable salary every month (plus year-end bonuses from the net profit). A “business” prepares monthly financial statements, profit and loss statements, income statements and balance sheets. Most importantly, a “business” makes a profit. A “business” without ALL of the above is not a business. It is a place to go to work; a place to try to make some money; a place to try and cover expenses; and a place to try to have some leftovers to pay for the owner’s lifestyle.

Get a return on your investment!
If asked to invest $100,000 in a friend’s new start up contracting business, what annual return would you want? 10%, 15%, 25%, 50%, or more? Considering the risks, one should never invest in a new construction business that doesn’t offer at least a minimum guarantee of 15% to 20% annual return on investment. Your fixed cost of doing business (overhead) is an investment in your future ability to make a profit as well. Every year you decide what overhead costs you will need to run your business. Your staff accordingly, rent an office, seek jobs to bid, and hope enough business comes in to make a profit. Likewise, you must also make a minimum 15 to 20% annual return on your fixed overhead investment you commit to in advance every year.

Aim at a fixed target
Construction companies should make a minimum 20% return on overhead every year. This is the minimum target to shoot for. If your annual overhead is $400,000, you should expect a minimum net profit pre-tax of $80,000. Remember this is the minimum and in most cases, too low to shoot for. Aim at a target of 40% to 50% return on overhead as a higher target to hit. For example, if your overhead is $400,000, your pre-tax net profit goal would be $160,000 to $200,000. Now you have a minimum target and a higher target to shoot for. These are specific goals you can aim at and then track your progress.

What is your fixed cost of doing business?
First determine your fixed cost of doing business or annual overhead costs. Overhead costs include everything you need to run your business without any jobs under construction. Overhead costs include:

• Company management
• Administration and accounting
• Estimating
• Marketing and sales
• Your office and utilities
• Computers and supplies
• All non-job charges business costs

Job costs are not a part of your overhead and include everything that occurs out in the filed or on the jobsite and must be job charged. Your job costs should include:

• Project management
• Supervision
• Pro-rata share of owner for project management or supervision time
• All field labor
• Field labor burden and fringe benefits
• Field workers compensation insurance
• Liability insurance for jobs and labor
• Field trucks and equipment

A typical $3,000,000 construction company’s overhead is shown in the example below. Your task is to calculate your accurate fixed annual cost of doing business. This is the ‘nut’ you have to crack before you can break even every year. Always include a fair and reasonable salary for the owner or president of your company6. If your owner runs some jobs, split his or her time between overhead and job costs such as project management or supervision. Also, field labor job costs must include workers’ compensation insurance and liability insurance. These are now overhead charges as they don’t occur unless your field crews are working on jobs. Be sure to put those costs into your job costs and not into overhead. Another mistake is putting all of your company vehicles into your overhead. Most vehicles are used out in the field and should be job charged including the insurance, gas, and maintenance.

Marketing to Construction

The recent slowdown in residential construction-specifically new housing starts-has garnered a lot of press and has been seen as a key harbinger of a weak economy as 2006 comes to a close. However, some experts say that the housing slide of the past year is nothing to be concerned about.

Although the annual start rate for 2006 is projected to have decreased by almost a half a million from 2005, it still marks the fifth best year ever for residential construction. It has been predicted that $622.00 billion will be spent on residential construction in 2006, down from $630.70 billion in 2005. Expectations for 2007 include a considerable drop to $602.00 billion in spending, but also a quick rebound in 2008 to $626.00 billion. Experts agree that the market should come back to trend in mid- to late 2008.

However, the residential market represents just a fraction of the overall construction industry. Both nonresidential building and public works-including such projects as roads and sewage systems-are expected to increase significantly in 2007 and beyond. Spending in nonresidential construction-including offices, schools and commercial space-is expected to rise from $350.50 billion in 2005 to $384.90 billion in 2006 and $419.90 billion in 2007. Similarly, public works construction project expenditures are projected to increase from $136.50 billion in 2005 to $149.10 billion in 2006 and $159.80 billion in 2007.

Despite the slip in the residential sector, insiders forecast that construction industry spending will continue to show steady growth, moving from $1.110 trillion total construction in 2005 to $1.160 trillion in 2006 and $1.180 trillion in 2007.

Trends to watch

Because of this optimism about the construction industry's growth, there are many opportunities for marketers and vendors to take advantage of it. Three major trends that should have long-term traction are:

Green construction. Being environmentally friendly and energy conscious is becoming a serious part of the construction process. It is being required to some degree in all government building and within five years will be the standard across the industry. Incentives to go green will push the process. Companies that stayed away from the trend a couple of years ago are now looking for ways to go green.

Building information management (BIM). With BIM, all parties-owner, architect, engineer, contractor, subcontractor and suppliers-sit down at the beginning of a construction project to optimize cost and process controls. Jobs that have made use of BIM have significantly reduced costs and construction time. A totally integrated BIM environment results in the elimination of bidding that translates to a savings for the contractor, eliminates shop drawings (thereby speeding up the process and improving profit), prevents cost escalation, eliminates punch lists and finger pointing, minimizes errors and omissions, and facilitates online payment of requisitions.

State and local public works projects. Due to increased tax revenue at the state and local levels, there has been an increase in building and road construction at these levels. In some regions, the local governments have grown tired of waiting for federal [money] and have tackled projects on their own, some with creative financing.

Best marketing practices

Best practices for companies that market to the construction audience appear to be changing significantly. The industry is dealing with factors such as increased demand, major increases in the costs of materials and labor, the impact of technology on the planning and building process, and the stability in the financial markets. These factors greatly affect savvy vendors' marketing tactics.

For instance, many marketers still have blue-collar perceptions of construction workers and find it hard to believe that one of the best places to reach them is on the Web. Contractors and their labor use the Internet every day in the course of their jobs to do research, check on deliveries, verify plans and schedules, and communicate with each other. In some trade categories, the incidence of Internet usage during work hours is an astounding 100% and, on average, construction people use the Internet more frequently for business than they do personally.

This need to be connected on the job means the construction industry will be one of the most lucrative markets for mobile b-to-b marketing once it comes into its own. Motorola is one major company that recognizes this reality and is accelerating development of mobility products that will service institutional, commercial and governmental construction areas.

Tried-and-true tactics

Regardless of the tactics used, online or off, construction audiences prefer to invest in tried-and-true products and services rather than the latest ones, regardless of the benefits touted. Innovative products-highly valued in other markets-are eschewed in favor of products that ‘work like they always do.’ Even great and well-respected brands have trouble launching products that are deemed ‘too new.’

To get over this sizable hurdle, marketers need to get products into the hands of end users. Demonstrations, free trials and sampling are more important than ever. Construction audiences need to use the equipment and services to accept, trust and, ultimately, buy them.

Public relations and viral marketing add an overlay of trust and credibility to any marketing effort and are extremely effective when targeting construction industry decision-makers. The two disciplines used together dispel any concerns about lack of tenure as a brand or capabilities of newer products, and let your happy customers do the marketing for you.