Ottawa, Ontario-based Kroon Electric has created a new category of electrical business that president Michael Kroon describes as a “technical services company.” Before unveiling its business model, let’s touch on the developments that have brought the company to where it is now.

Kroon Electric: A use case

Kroon Electric was started in 1976 by Kroon’s father. In the tradition of a family business, it has employed members of three generations, including Kroon’s grandfather, who served as the company’s accountant.

Kroon Electric gained initial traction working for homebuilding contractors. Kroon recalls that when one of them went bankrupt, Kroon Electric ended up owning residential property it never expected to.

Even as the business moved up the food chain and landed contracts on small commercial jobs, Kroon recalled, the company ended up owning real estate that it had never anticipated, when one of its customers “went belly up.”

In the 1980s, Kroon Electric steadily grew and enjoyed a run of profitable years. But business conditions became difficult in the early 1990s. Kroon’s father encouraged him to seek a new job in another industry, and that’s exactly what he did. Moving from Ottawa to Toronto, he took a job at ADP, an industry pioneer in outsourced payroll processing. Although he was successful, in 1997 he decided to return to the family electrical contracting business in Ottawa. The company was still small, but it was profitable.

In 2002, he enrolled Kroon Electric in a network that features a business format franchise model for preventive and predictive maintenance of commercial and industrial electrical systems. In 2008, he redoubled his commitment to predictive and preventive maintenance by becoming involved in other programs.

In 2013, however, he was diagnosed with cancer, which limited his day-to-day involvement in the company. But it did not extinguish his belief in the predictability of service and maintenance versus the uncertainties in new construction. He had reached a major turning point in his life and business.

A new way of business

In 2014, he made a momentous decision to steer his company completely away from bid-based new construction work. From that point forward, Kroon Electric focused exclusively on producing recurring revenues.

The governing business philosophy from that point on would be centered on leveraging intellectual capital, versus marking up construction costs.

Over the past decade, Kroon has remained true to that principle and introduced a number of innovative departures from traditional approaches to service and maintenance. The company, for example, offers customers longer multiyear agreements for energized and de-energized maintenance, standardizing on five-year agreements, instead of the more common three-year versions.

Kroon approaches new business opportunities with a go-to-market strategy based on selling, not bidding.

It stresses the value that a maintenance program can yield by protecting against avoidable equipment breakdowns. Kroon built a talented cadre of engineers and others to enlarge and widen its capabilities at energized and de-energized maintenance.

That additional talent has also put the company in a position to add new service and maintenance offerings.

But nothing tops the company’s ability to provide a post-construction assessment that overarches the commissioning activities that others have performed on individual components of a facility’s electrical system.

Kroon Electric’s technical capabilities combine leading-edge engineering, skilled technician work and predictive testing to deliver electrical maintenance able to analyze all the electrical, electronic and communications systems in a customer’s facility as a totally interconnected assembly, not just individually commissioned components.

The recipe for success in the “after-built” space has continued to win long-term service and maintenance customers.

Today Kroon Electric continues to add more service product offerings, attract a wide range of new customers, and with a select group of service-centric contractors, share a growing body of knowledge about electrical systems maintenance.

As we progress toward the electrification of everything, the greater the world’s level of understanding of how to maintain that “everything,” the better off we will be.