Fire Security Systems Installations

When comparing the upfront profit margins of various types of security installations (fire, intrusion, access control, and video surveillance), fire actually has the smallest upfront profit margin. However, security dealers should be aware of the promise for recurring revenue in the fire security industry.

Marketing Fire Security Systems
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On a cool, crisp autumn evening, there is no better time to gather around the campfire. But before the good times (and gooey s'mores) can begin, somebody needs to actually start the campfire. Now, it doesn't take a boy scout to know that the way to start a campfire is to first start small. Light the tinder, then work your way up to bigger and bigger pieces of wood while carefully fanning the flames. Once you get those leaves and dried pine needles ignited, their heat will then set the little twigs ablaze, and so on and so forth. With some patience and careful planning, you can build up a nice campfire that will last the evening.
Security dealers who are looking to build a profitable fire system installation business could discover it is much like starting a good campfire. If you try to take shortcuts and don't take the time to learn how it works, your dreams of growing profits could go from sizzle to fizzle.
When comparing the upfront profit margins of various types of security installations (fire, intrusion, access control, and video surveillance), fire actually has the smallest upfront profit margin. So why bother? The answer is simple: recurring revenue.
KNOW THAT YOU DON'T KNOW
One of the biggest mistakes that security dealer integrators make when they first start doing fire system installations is thinking it's like installing a burglar alarm. "Probably one of the worst things you could do is being comfortable in the fact that you know how to program a security system and therefore think you know how to handle fire systems," says Mike Madden, national sales manager, Gamewell-FCI.
He quips, it scares me when I hear someone say they have real smart installers who can handle any security system and they don't worry about fire. "I run screaming from people like that because they really are naïve about what they are getting into," says Madden.
Al Koenig, president, Casey's Systems, a fire dealer in Floral Park, NY, agrees. He says that oftentimes security dealers who try to get into the fire business don't understand the difference between burglar alarms and fire alarms.
Fire alarms are code driven, meaning national codes, local codes, city codes, and law regulation, Koenig explains. As such, according to him, you have to design the job, plan the job, file the job, then follow the plans in every way—the way it looks, the kind of wiring, the kind of conduit, the way you terminate the wire, everything—to a strict code standard.
Another problem that you could run into is bidding a project too low. "The wrong way to work up a project is when a dealer thinks you can add up the devices in the system, throw in a few hours of labor, a couple of dollars for wire and call it a day," says Koenig. He sees this attitude in fire installs for typical small businesses, such as restaurants, bars, or night clubs, looking to install a fire system for about $5,000.
"If they got the price of the job from a real fire alarm contractor," he continues, "the price would be $20,000."
Koenig explains the extra expenses come from necessities like hiring a licensed professional engineer (PE), providing professional drawings on AutoCAD, paying the building and fire department a filing fee, hiring an asbestos investigator, using a UL-approved central station, the special fire wiring required and so on.
Koenig has seen underbidding a fire install ruin a dealer's business. If a dealer who doesn't thoroughly understand the fire business tries to go for the big installs right away, he could be in for huge problems immediately. For instance, a dealer might look at a 12-story building and figure $10,000 a floor would be pretty good and make a $120,000 bid. Koenig explains that might be a good bid for that building for burglar alarms, but for fire it might be more like $500,000. "If your company is small, that type of mistake could sink you," he warns.
FIRE CODES ARE KEY
While fire installs are very different from burglar alarms, Madden says that they aren't necessarily much more difficult. However, he emphasizes a thorough understanding of the fire codes, which can be key. A fire dealer has to pay attention to national codes, such as from NFPA or IPC, as well as local codes.
He continues, "Local codes and national codes work hand in hand in terms of what governs a correct installation of a fire system—and you can never be too educated in that area."
Madden says that he is currently fighting a battle for a dealer regarding an interpretation of the fire code. While he thinks his dealer is in the right, he says this situation could have been prevented if the dealer had gotten this sticky part of the local fire code clarified before the job ever took place. Now he's fighting the battle after the fact.
"In security you can design and do whatever you want to do," says Madden. "There is nothing to constrain you. You are only constrained by your imagination on how you want to approach a job. In fire, that is not true and you have to pay attention to the codes."
BUILDING THE BUSINESS
For security dealers who are serious about getting into the fire business, Koenig recommends that they get educated about the industry and start building relationships with the key fire people in their locale.
Koenig says that the National Institute for Certification in Engineering Technologies (NICET) has fire certification classes (Level 1 through 4). "You should get at least a NICET Level 2 so you really understand fire," adds Koenig, who also gives courses.
"The best advice I have is to start small," urges Koenig. He recommends relationships with the fire department so you better understand what the inspectors want; and start talking to a professional engineer, an electrical contractor, and the vendors of the products you might represent.
He also suggests it is a good idea to join a local fire alarm association and go to the meetings. "A lot of engineers show up there," he says, "and you'll get a great deal of free education."
Koenig concludes, "Most dealers can succeed if they hire a person who knows fire and grow a division from there."
SHOW ME THE MONEY
For somebody who wants to learn about the fire industry, it can be a steep learning curve. For instance, the NICET tests are six hours long—and they are difficult (only about 20% pass on the first try). It can take close to a year to reach NICET Level 2 and a few years to reach NICET Level 4. Couple this with the fact that there are lower upfront profit margins in fire than in access control, burglar alarms, and video surveillance, and it certainly begs the question: Why get into the fire business?
On the plus side, Al Koenig, president of Casey Systems, notes that the fire codes require annual inspections, oftentimes twice a year. Such inspections of the entire system will require repairs and tweaks, which means solid recurring revenue for you.
"You build a recurring base," states Koenig. "The more years you are in the business, the more recurring base you have. All your profit is in your annual."
"In addition," he says, "once you hold the program for the building (all of these systems are electronically programmed), the building owner usually stays with you forever. Furthermore, if you are doing office buildings, tenants are constantly moving in and out and every time a floor is altered, you get the job. So you get the recurring on that. You get the residual. That's the key to the business."
OLD BUILDING… NEW FIRE SYSTEM
"If these walls could talk." It's an old expression that's particularly apt for the new Crestwood Condominiums building in Kansas City, MO. This grande dame of the city's historic Country Club District has a long, storied and varied history.
Originally built in 1917 and designed by John McKenknie, one of Kansas City's most prolific architects, the Crestwood was originally known as the Brookside Hotel and Apartments. Over the years, the building's function and level of upkeep has oscillated. It has served as temporary housing for military personnel in World War II, as a dorm for the St. Paul School of Theology, as University of Missouri- Kansas City campus' Treadway Hall, and as a home away from home for flight attendants.
Most recently, it sat vacant and in a sad state of disrepair. But this past year, the once proud building's dignity was restored by developers. Today, the building has been reborn as Crestwood Condominiums, with the interior completely gutted but its classic character intact. The building now features a wealth of modern amenities and safety features.
In a way, this building's walls can now "talk." The building communicates smoke and fire danger to building management, residents, and the fire department through a life safety system installed by the low-voltage and fire safety dealer integrator, Service Electric of Blue Springs, MO.
Service Electric project manager Shawn Grey explains why the Silent Knight system is his choice for apartment buildings. "One of the reasons the system is well-suited for buildings like Crestwood is the way all the different remote power supplies are connected via an S-bus and easily programmable from a central control panel," he says. "Each remote power supply has enough power to cover a given floor making it a very well-engineered system in this regard."
Crestwood's Silent Knight solution includes one Farenhyt IFP-1000 addressable control panel located in the main office and one RA-1000 remote annunciator located in the building's main lobby. The Crestwood solution also includes several RPS-1000 intelligent power supplies.
Crestwood's all-in-one Silent Knight IFP-1000 fire system uses 139 addressable points (with the option of expanding to 1016 points) that let the user determine exactly which device has been activated or needs attention. It also uses distributed power supplies, enabling power sources to be located near evacuation areas, rather than having to institute a complex wiring system.
"During an alarm situation, the panel tells us exactly where in the building the problem is taking place," says Donna Shippy, Crestwood's building manager. The system triggers doors that automatically drop down in front of the elevators, blocking their use. Residents are directed to the closest stairway and then to the nearest exit or safe area."
The Silent Knight RPS-1000 Power Supply also offers a high degree of flexibility, thanks to its "Flexput" circuit feature. With Flexputs, an installer has the option to establish each of the panel's six circuits as either an input or an output. With many other power supplies, the circuits are pre-defined as either input or output. But the RPS-1000's Flexputs give the installer more installation flexibility, accounting for whether they need more conventional smoke detector input or more auxiliary power or notification output.
VIDEO SURVEILLANCE: The Next Fire Alarm?
The 2007 edition of the NFPA 72 fire code includes, for the first time, provisions that allow "Video Image Smoke Detection" and "Video Image Flame Detection."
"It's an up and coming technology," says Lee Richardson, senior electrical engineer, NFPA. While he cautions that the technology is "not fully mature" and "more work needs to be done," he expects the next edition of NFPA 72 will have even more refined requirements for video surveillance fire detection.
One of the companies on the forefront of this budding technology is axonX with its SigniFire system.
"SigniFire is a comprehensive, video-based threat detection system covering intrusion, smoke, and fire," says Bob Dannenfelser, manager of global product services, axonX LLC. Capable of using up to eight standard analog CCTV cameras on a system, the SigniFire DVR can detect the presence of motion, smoke plumes, smoke stratify, outright flames, and even the reflection of flames on others surfaces, he explains.
The whole concept behind the SigniFire is to use video analytics to detect the fire in its infancy rather than wait for heat or smoke particles to reach and activate a sensor. Furthermore, when SigniFire's video analytics detect a fire or abnormality, it is able to transmit both an audio and video warning. By having a visual of the situation, onsite security personnel can better plan the response.
The SigniFire, Dannenfelser says, can help security dealer integrators break into new markets. For instance, dealers can go back to their existing CCTV customers and offer them a level of security that they were unable to before, he explains. "It also allows them to go to new customers who may have said, 'Well, I already get my cameras from so-and-so,' and take those existing installed cameras and turn them into a system by adding our SigniFire package."
So far, axonX's SigniFire has been received well by critics. It has won a Wall Street Journal Innovation Award in the category of Security (Facilities), and the U.S. Navy rates it highly as well. A concluding report from a 2004 Naval Research Laboratory's Advanced Damage Countermeasures Volume Sensor Project found that the SigniFire responded faster and to more fires than all of the other video or spot-type detection systems that were tested.
axonX does not yet have Underwriters Laboratories (UL) or Factory Mutual (FM) certification yet, but it is working on that. The company is partnering with the University of Maryland's department of fire protection engineering as part of a Maryland Industrial Partnerships (MIPS) project. The SigniFire will be tested in simulated dorm rooms and possibly in the school's basketball arena which seats over 12,000. Depending on how this MIPS project goes, it could officially become listed by the UL and FM.
axonX will be releasing its own SigniFire IP camera as well as a paired, multi-site server. Currently, for companies with a firewall, SigniFire's surveillance of the facility has to be monitored from a computer onsite (as opposed to going through the firewall to a remote site). With the new multi-site server, which axonX hopes to have available early next year, SigniFire's onsite server would be able to communicate through the firewall with its remote server, allowing the facility's SigniFire system to be monitored offsite.
author: By Greg McConnell, Assistant Editor - Security Dealer




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