Pathway to success: Konvertek Company

Pavel Sidorov, owner of Konvertek Group of Companies, on his path, development of climate control equipment market and going beyond the Ural region

Pavel Sidorov, 34 years old

CEO of Konvertek Group of Companies

Pavel, tell us about your education. What's your major?

I graduated from the Ural Federal University named after the first President of Russia B. N. Yeltsin with a degree in electronic engineering. I chose randomly from a small list of specialties in Kamensk-Uralsky, the provincial town where I come from. But what can they teach in a provincial town when it comes to new production technologies? The most modern thing that they taught was CNC machining. I studied theory at that same university. I lived like many - in a dormitory and felt all the «life pleasures».

What was your first job? Have you tried to work in the specialty?

My first job was on a construction site, I was carrying bricks. Information about the underwork spread to students instantly and tasks were taken away as doves of bread. What we only did not do — we built roads, equipped territories in the yards, dragged asphalt, «bring, sell and earn a tip» type of work. Diploma and specialty were just for the sake of appearance for me, while I wanted to do something more modern. In the 3rd year, I worked as a supervisor, then I already had my car, and I took advantage of it. The job was quite simple - to launch promotions in stores, follow promoters, take photos of them. Nevertheless, there was still little money.

And at that time the fashion for sales manager emerged. It was considered a profitable business. And I decided to be one.

From a bunch of newspaper ads I found a company that deals with climate control equipment. I decided to go wherever they'll take me without experience. And I got hired for this job.

How did you develop in sales of climate control equipment?

At the start there were not much sales, enough only for student life. Right now, from the perspective of the practical experience I can conclude that the segment they covered was not highly profitable. They searched for small private orders and employed primitive methods. My assignment sounded something like this: «check out all the first floors, if you see there was a renovation going on, then sell them air conditioners». But I am grateful to them for the beginning of my path in sales, which led me to understanding the market of climate control equipment. Three years of experience, including the «fieldwork», strongly improved me.

At some point, the crucial event happened. I got a call and was offered a job as a sales manager in a solid climate control equipment company and they offered me good conditions.HR office has agreed on my transfer to another company. Since then, I got into a serious climate control equipment company, which was distinguished by large volumes and a strong team. After 1.5 years, when I plunged into the details completely, they started to appoint large deals for me. Courses and business trainings on sales techniques helped me very much. Soon I became the best in sales in terms of the year and held this title for several years.

Then financial difficulties began, the company was bankrupt. The sales manager gathered his team, and I became his deputy. This has lasted for several years.

When did you realize that it is necessary to start your own business?

Several critical moments prompted me to set up my company. Firstly, disagreements began to emerge with the Director of Process Management and Development, the work for me basically began to turn into stress. Secondly, at that time there was another peak of the financial crisis and we lacked money. However, the decisive factor in this situation was a certain case.

In 2015, I successfully negotiated with my customer — a 1500 sq.m. shopping mall. Due to the tight deadlines, I managed to negotiate 70% of the advance payment. In order for you to understand the situation — in the construction market the issue of prepayment is always a complicated one. A lot of tenders are paid on the fact of delivery of equipment and performance of works. Nevertheless, my director considered that such advance payment is not enough and did not sign the contract, thereby once again trying to show me his decisive word in any questions. I found his position unreasonable towards me and decided that the moment was right now. The next day in the morning he was ready to sign this contract, but I already made another decision - to open my company and perform works on the object myself. My first project was exactly that shopping mall. Then I worked with former customers on my behalf, new ones came to me by the recommendation. I am grateful to my former supervisor for the skills and invaluable experience that I have acquired. Everything that Konvertek is doing now is due to all the difficulties that occurred here.

Tell us what is happening in the air conditioning and ventilation market?

The market is actively developing, but it is haunted by echoes of the crisis in the construction segment. There are high-risk projects with complex money- receiving mechanism. You can simply end up working for free without receiving money at all. There are even structures which are created especially in order not to pay the contractor. They can delay acceptance and instill the contractor. On large objects the competition is high, they are in sight and dozens of different companies appear on the tender. Nevertheless, it is necessary to correctly assess your strength and possible risks, rather than taking every possible project.

Many companies used to be engaged in the sale of climate control equipment, it was considered something elite. You would not just go to an electronic store to buy an air conditioner. It was the prerogative of climate companies.

Now you can find air conditioner in almost every apartment. But we do not work in the mass market, our direction is B2B, wholesale sales/supplies of climate control equipment. The cost of projects, as well as the reliability of costumers, is much higher there, with individual and complex work with each customer.

Creating a company in the construction industry has become more difficult. Now before signing the contract, the legal entity passes the verification more seriously than ever before. A bunch of documents are requested — licenses, ownership/lease agreements for office and warehouse space, accounting reports, company personnel information, certification protocols of work safety for installers and their supervisors. Major customers refuse to consider contracts with companies that have been around less than three years since their founding date. After all, the older the company, the more checks it passes.

Reliability is the most important thing for customers now: how much the company exists, what staff it has, whether it has a web site.

How do you get top customers?

The important point is that we keep the quality of our products and services. We do not save on the quality of used equipment and materials in our projects. The leader always participates in the negotiation process, at the closing of major deals. When the customer sees the involvement of the entire team, feels ten years of the accumulated experience and business appearance, the deal is more likely happen. In addition, our customers often recommend us.

How do you promote yourself online? Are you developing a website?

The website was not an income tool for me until one case. In a previous job, a customer from Moscow was building oil and gas laboratories in the North, and I could not negotiate with him and close the deal. Then I came up with an idea. I told him - «Look at our website and then you will understand everything». And so he did. He assessed the scale of the company and signed a contract with us.

Therefore, at the time of the creation of my company in 2015, with the help of Syncweb, we created a site www.konvertek.ru, registered domain, connected mail and ssl-certificates, invested in reliable hosting and search engine promotion. Syncweb has provided us with a complete and secure presence on the Internet. Our customers are major, we are trusted, and so our partners are those who can provide reliability, high level of the service and safety of service.We are constantly working on the website, updating, posting new content, promoting. Most customers in our industry come by recommendations — about 50%. The remaining 50% - by direct sales, SEO promotion, newsletters to companies and other channels.At the moment we are finalizing the second website (www.konvertek-stroy.ru) on wholesale sales of ventilation equipment, fasteners and consumables for installation of ventilation systems, constructive fire protection and thermal insulation.

Tell us more about this direction of your business?

In 2017, thanks to my colleague, I decided to open a new direction — a wholesale warehouse for the sale of consumables and equipment of ventilation systems, constructive fire protection of air ducts and thermal insulation. For 1.5 years, we show a stable and confident growth in this direction. We are making progress towards making it possible to order all the components for ventilation installation in one place, which helps our customers save their time.

In wholesale sales, we make concessions to customers in many ways. We sell quickly and easily.

We postpone payment, transport the equipment and materials directly to the object or warehouse to the customer. We are quite flexible to the legal side of the issue — the shipment by payment documents to new customers and by scanned copies of letters of trust, because I understand that that is what I would have wanted.

While we are a small corporation — the flexibility of solving issues works with a bang.

In what areas do you see the future development of your company?

I see our company developing in the industrial segment of ventilation and air conditioning systems. After the development of the project, we order industrial equipment individually for each object. It is mainly deliveries from Europe and partly from Russian factories. After that we bring it to the customer to be installed. My team plays a great role in effective work from the receipt of the order to the final installation, for which I'm very grateful. Our company is committed to turnkey projects from project development and supply of materials and equipment to finishing installation and commissioning works, maintenance services.We have defined several segments for the objects accomplished. There are quick deals — 2-2.5 million rubles. They have clear financing and receiving money for the performed works. Usually, the period of implementation of such projects is from 2 to 4 months.

There are more complex objects in which the cost of the project is already 10 million and higher. The term of execution of such projects starts from one year. Design (if necessary) takes several months, equipment delivery — 2 or 3 months, installation work — about 6 months, depends on the volume of work performed.

We performed a similar turnkey climate system installation project in 2016 in the industrial complex for the production of medical devices in my hometown Kamensk-Uralsk. The cost of the project was 7 million rubles, we finished it in a year. We have launched several sections of engineering systems — general ventilation system, installed smoke exhaust hatches on the roof of the building, heating system of supply units and industrial air conditioning. Also, at the request of the customer, automated engineering systems control was programmed and installed. During installation, we laid ten kilometers of cable, assembled and installed dozens of electrical cabinets, supply control systems with Carel controllers. For ease of operation, we used frequency regulation of all used electric motors. In the smoke exhaust hatches, automatic systems with redundant battery control were used to ensure operation of the system even when the power supply systems of the building are shut down in emergencies.

In the photo: Construction of the production complex of JSC «Zdramedtech-E». Kamensk-Uralsky, 2016 year.

Another example of a large project: in 2017, we performed a large amount of work at the Civil Aviation plant, the total cost of the contract was already about 10 million rubles.

In the photo: Ural Civil Aviation plant, Yekaterinburg, 2017.

Another segment we cover is the elite segment of residential real estate. We carry out projects within the cost of 1.5 - 2 million rubles. We use modern and effective solutions, and only high-quality consumables, which we deliver by ourselves. For the convenience of users, we connect all our systems to the «smart home» (if available) and integrate climate control modules via smartphone and the Internet. We make centralized humidification systems to ensure a comfortable climate and durability of wood decorations.

When humidification system is properly designed and installed, the climate is always very comfortable in the rooms, parquet and wooden stairs do not crack and do not dry, and the correct humidity in the house is beneficial for human health, especially when there are small children.

In addition, we pay attention to the aesthetics and appearance of the systems used.

Designers and architects have long been trying to move away from classical solutions with wall-mounted air conditioning systems, believing that these «white coffins» kill their wonderful interior design.

From a visual point of view, they really do not look very good. Therefore, all our main solutions are built-in, they look modern and stylish, and what is important - our air conditioners are silent.

In the photo: Private object, accomplished in 2016.

What are the successes in moving beyond the region? How do you plan to develop further?

We go beyond our region by the word of mouth. For example, we carried out projects in the polar regions, where the equipment can only be delivered on a snowmobile or helicopter. One object was in Irkutsk, we delivered climate control equipment by river in the winter, loaded it on the all-terrain vehicle, which transferred us to the deposits. In the North the prices are different, there human labor is estimated more expensive. If the customer understands that you are doing excellent on the first objects, he is ready to order works in other regions.

What are the plans? We have already made a large online store for wholesale sales of ventilation and air conditioning systems in the Urals. We have contacts of people who work in the field of construction.

In the photo: Hotel with a cafe on the ground floor, Megion city, Vysoky urban type settlement, 2018.

We supply materials to those who win large tenders for the supply of climate control equipment. When you know the market, it is easier to negotiate.

Soon we will try contextually targeted advertising. Business has a certain seasonality, with peak activity in the summer and at the end of the year, when it is necessary to finish projects. We also implement CRM and IP-telephony so that the promotion is transparent and we could keep in touch with customers. We make all business processes technological and automatic, and this is the future.

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