A GUIDE TO NEW & POTENTIAL SATELLITE INSTALLERS

Basic information

So you are considering becoming a satellite installer? Here is some background information that you can use in order to arrive at the best decision. I frequently get asked by young enthusiasts what they require to become a qualified installer of satellite systems, or for many, what is required to start an installation business. My advice to all would be to be as realistic in your expectations as possible. All of us have different ideas of what a successful business looks like and what one expects to get out of it.

One person would just like to have a job as an installer and is prepared to work for someone else’s company.
The next person feels he is prepared for the responsibility of running his own business and make enough money to have the basics in life covered like the education of his children.
Others would would like to manage/own their own business with the perks of driving a Jaguar or Discovery to his holiday home.

WHAT IS REQUIRED OF INSTALLERS TO ACHIEVE THESE GOALS?

Let us look at what is the minimum input required to reach this goal.

No matter which broadcaster you do work for, each installer will need to pass a certain level of competency test.
In order to do this they will have to be employed by an approved company for at least 6 months or more depending on the level of technology they are required to work on.
Employers will need to have evidence of the individuals intentions in order to supply the funds for such training to take place.
Over and above, each technician also needs extensive training in the operation and technology that the broadcaster requires.
This qualifies the technician to be familiar with the standards of workmanship and knowledge of the systems required to activate pay Tv decoders.
Each technician should also be familiar with the payment system that the broadcaster uses.
This requires the technician to be familiar with basic applications on an Android and PC.
A valid drivers license with an accident free record is also vital.
Because we work in customers homes and even bedrooms it is essential that a technician has integrity, honesty and would respect the customers privacy, also regarding their personal info.
The systems that are usually in place will quickly catch out a dishonest technician.

Extra skills required

Broadcasters will expect technicians to know all the different features of their system and be able to explain to the customer exactly how to activate a specific feature and how to get the best advantage out of the equipment he bought.
A technician is required to be proficient in sales in order to boost sales of the broadcasters products, like for instance, insurance and internet services.
A technician also needs to have the ability to pick up on the various needs of customers and suggest upgrades without being tacky.
Remember that you as the technician as well as the installation company you work for does not get paid for these extra tasks you are expected to perform. It is seen as value added services.
Technicians need a solid background knowledge in order to do consultations, site surveys & quotes for customers sometimes exceeding One million Rand. – A great responsibility.

Requirements of Installation companies by broadcasters:

There are a number of hoops that an installation business needs to jump through in order to be accepted as a legitimate contractor.

Your business needs to obtain approval status from the broadcaster.
There will be a legally signed contract that has to be adhered to.
Your technicians should be task specifically qualified by passing required theoretical tests.
You need to have certain office equipment in order to be able to communicate efficiently with everyone in your daily activities.
You need tools like Microsoft Office, Word and Excel plus a Data base.
A presentable insured vehicle (Bakkie) for each installation team plus availability of a spare bakkie in case of a breakdown. (not a requirement but a benefit to your business)
A complete set of tools, stock and equipment for each vehicle.
You also need public liability insurance for at least R1,000,000.
One needs a safe and secure premises where you can store you vehicles and stock and where customers can meet with you if needed.
Whether rented or as part of your home, you require a dedicated office space from which you can manage your operation. This must include a stock room and a staff room for technicians to use.

General requirements for an installation business:

A vital requirement is backup power to keep the office running throughout the day.
To be ready for each type of job you need to carry stock of at about R80,000. (This needs to be insured).
The business needs to be geared to render their services throughout the year within the laws of your country.
One has to make provision to service your customers effectively despite having some staff members on their annual leave.
The law states that you have to pay your staff overtime of one and a third for after hours and Saturday service, plus double time for Sundays and public holidays.
It means that the business must be able to save for leave pay and bonuses during the first 11 months of operations, in order to be closed in month 12.
The business also needs a dedicated person to do the admin, which the owner can do if he likes, but it is really a two person job.

Office tasks could be:

Arranging of appointments.
Stock control and purchases.
Calculation and payment of salaries, UIF, PAYE, overtime and suppliers.
Payment of monthly VAT.
Staying on top of Debtors, and making sure money comes in on time.
Liaison with major customers.
Doing site surveys, for quotations.
Regular customer visits to check on technicians work quality.
Calling customers to establish satisfaction levels.

To have a smooth running business with happy customers and employees, it is vital that there is a positive cash flow and healthy bank balance. You are expected by your Broadcaster to render a professional service to their customers.

What is the general Monthly expenses of such an operation:

This will differ for the size of your operation, but you can use this template by filling in appropriate amounts so that you can arrive at a total that will be close to reality.

Salary of owner. ………………
Salary of Office manager. ………………
Salary of technicians. (4 techs no medical). ………………
Insurance. ……………..
Rent. ……………..
Petrol. ……………..
Repayment to bank on bakkies x 2. …………….
Airtime. ……………
Accounting fees. ……………
Savings for leave, holidays, bonuses & co. Tax. …………….
Provisions for new tools & special equipment. …………….
Clothing, safety-shoes raincoats etc. …………….
Replacement of office equipment. …………….
Office requisites/ paper & printing etc. …………….
Safety & first-aid requirements. ……………
Entertainment provisions. …………….
Vehicle services & maintenance. …………….
Income Loss due to sick-leave. (R476.oo/ Techn./day) …………….
Bank charges. …………….
Training (4-non income generating days at a time). …………….

Total: R…………………

The Largest expense above is the owners salary set-out as follows:

House repayment (3 Bedroom in medium income suburb). …………….

Municipal. …………….

Medical aid. …………….

Payment on family car. …………….

Payment on spare bakkie for owners use. …………….

School fees …………….

Insurance …………….

Pension fund. …………….

Food- petrol – annual Holiday. …………….

Savings. …………….

Total: R ………………..

Capital required to start this small business:

Deposit on a rental property.	…………….
Stock in trade – to equip 2 work ready Bakkies.	…………….
Specialized tools. (Testers, ladders etc.)	…………….
Deposits on bakkies.	…………….
Purchase of Office equipment. P/c, cellphones, printers,etc.	…………….
TOTAL: R	………………..

The required income for this business type:

It is thus logical that the income of the business has to exceed the expenses by a margin of at least 20% to compensate for weak months. This minimum income for this small business should thus be: R ……………….

With the available working hours in a day kept in mind, let us look at what the business has to charge per day, hour, Job in order to meet their expenses. That means make a very small profit.

Target monthly income: (expenses + 20%) R……………….
Devide by 2 teams: ………………..
Devide by available working days (21) ……………….
Only 2 x 2 point 3h installations fit in a day ………………
Per job the income has to be: ………………
If this Per Job amount compares favorably with the income that you are paid by your Broadcaster it means that you are making a profit on each job,and should reach your monthly target.
BUT IF THE INSTALLER CANNOT MAKE HIS INCOME AND EXPENSES BALANCE, WHERE CAN THE PROBLEM BE?
Unfortunately it is not possible to have jobs come in, in such a way for you to fill each working day optimally. We thus lose productive hours frequently, that needs to be compensated for.
One frequently have to deal with last minute cancellations where lots of hours get lost.
Spending time traveling is a dead loss because domestic customers do not want to pay for traveling. It is therefor to your advantage to limit your traveling distance to below a 10km radius if possible.
It is much better to swap out jobs with other installers in order to cut on traveling. It is also beneficial to the customer to call back a nearby service provider in case of a problem.

What is required of the Broadcasters by their installation company partners:

Installers need a regular and constant flow of work coming in from the broadcasters sales team to be able to schedule appointments well ahead of time.
IT IS MY HONEST OPINION THAT THIS IS THE CURRENT DANGER THAT FACES THE SURVIVAL OF INSTALLATION BUSINESSES.
To try and keep most days profitable for installers, many adopt additional services types like security etc. This however is not ideal.
If there happens to be any type of hold up or blockage in this flow, it will drastically influence the profitability of the installation business. One can not make up for days in the month where work did not come in, or work was cancelled/suspended for some or other reason. – It effects your bottom line dramatically. It is not possible to quickly get other jobs to do on short notice, which means that the business must pay full days of technicians salaries without them bringing in any money. No business can afford this.
It is also vital that broadcasters have teams available to service their customers, and keeping them loyal in order to keep the switch-off rate as low as possible.
It is not legal for broadcasters to expect installers to be dedicated to them only, but it would be an ideal partnership if you did not need to do other service types and could specialize in only satellite/Tv.
Also when new pay tv customers join up they must be treated to a great customer satisfaction experience, that the installer is a big part of, by being there on time and having enough time to finish the job.
Let us face it. Installers are just as reliant on the broadcasters as the broadcasters are reliant on the installers. We have a tricky balancing act to manage here, but if we happen to get it right, it will be a win-win situation for all three parties.

What is the difference between servicing your own customers and those of the broadcaster:

When working for a broadcaster, you have to keep your prices as close as possible to their guidelines. This helps their customers to budget, and to know what to expect.
Broadcasters usually pay a fixed rate for a specified job, leaving you at a loss if you have to pay overtime rates.
Working for your own private customers, gives you the freedom to get paid exactly what you deem your high quality services is worth. You can charge more for more difficult or dangerous work, as well as pay your technicians overtime rates should they work late, or on Saturdays & Sundays, as per Dept. of Labour Laws.
You can also charge a little more for your hardware, that helps to boost your profitability.
It is vital for installers to accumulate a few corporate customers. These customers usually create an income, with their Television services to their customers. They are therefor not so price sensitive as domestic customers, and are willing to pay more for excellent and professional service. I have determined that these are the ones that pull my business through (Positive cash-flow) every month.
This however means in theory that your corporate and private customers actually subsidizes the jobs you do for the broadcasters.

Striking the ideal balance:

From the above mentioned facts it is clear that we have not reached that sweet spot of balance with the broadcasters yet. Is this possible? No one can tell. If however both parties are hellbent on making their businesses work, it should be possible.
It is admirable to notice how much money the broadcasters have been prepared to spend getting the system to work smoothly for themselves, installers and their customers.
We surely still have a long way to go, which is observable in the amount of installers leaving the trade and the ones who experience so much work related stress that their health fails. For others the financial reward has just not been worth their efforts and they have moved on to something more rewarding.
A balanced business should also escalate in value over the years. All their years of hard work should turn into a valuable financial asset that they should be able to sell at any time, to say, boost their pension plan.
* This is however not really possible with an installation business anymore, because the customer base that they have been accumulating over many years, have been taken over by the broadcasters, that now send the installers to work at their previous customers, at a much lower hourly rate.

Current salaries for technicians in the industry:

With 0 to 3 years experience.	R3,500 to 4,000/month
With 3-5 years experience.	R6,000 to 8,000/month
With 5-10 years experience.	R8,000 to 12,000/month

The main broadcasters in the Southern African region:

1	SABC/SENTECH.
2	OPENVIEW/ OVHD.
3	STARSAT.
4	DSTV/MULTICHOICE.
5	SATELIO/ DEUKOM.
6	ZAP.
7	ZUKU.
8	PREMIUM FREE.
9	CANAL+/ PARABOL.

Conclusion:

We have no idea what the future holds for this industry under the current economic conditions. There are however still many installers that are doing exceptionally well and then others on the opposite side of the spectrum.
The services of this business type remains high in demand and have served many families through the years with a vital income.
It is essential that different installation companies start seeing each other as allies and not competitors, so that they can work together to iron out any problems that arise with a collective force.
I would encourage installation businesses to keep the well-being of your colleagues and employees in mind by limiting their work week to 5 days, so they can keep their family life healthy by spending time at their homes on weekends and being fully recharged for business on a Monday.

I hope that this information is valuable to especially individuals that are considering entering this field. Please remember that this is my own opinion and conclusions. Speak to as many as possible other players in the field to get a broader view. Thank you for reading all of this and supporting this website. Anyone is free to drop me a mail with your comments and suggestions.