Jan. 2, 2024

Ep 231 - How We Would Start a New Electrical Biz in 2024

Have you ever wondered what it takes to electrify the entrepreneurial world with your own electrical business? This electrifying episode sparks the conversation with Joseph, where we share the secrets to jumpstarting your venture in 2024. We tackle the big decisions - bootstrapping or banking on loans and investors - and how to accelerate cash flow to fuel sustainable growth. Our chat takes a turn down memory lane, acknowledging how the rush of time and mounting responsibilities shape our entrepreneurial endeavors. Special thanks to our community spark plug, Chad German, for driving us to craft this power-packed guide for electricians ready to light up the business world.

Switching gears, we illuminate the perks of powering up a service-based business model, speaking from my own shift from construction to service. Understand why a service-oriented approach may keep your business glowing bright amidst the industry's competitive landscape. We dissect the stats revealing the small business climate's challenges and opportunities, and why putting all your eggs in the construction basket could leave you in the dark. Finally, we explore the backbone of a resilient business - finding your 'why'. It's not just about flipping the switch; it's about igniting a fire that keeps you blazing through the toughest times. So, plug in, amp up your knowledge, and prepare for a series that will transform your approach to sales, pricing, and customer service.

Join us LIVE 5 days a week on the Facebook Community page:

https://www.facebook.com/groups/electricpreneursecrets

00:02 - Starting an Electrical Business in 2024

08:10 - Choosing a Service-Based Business Model

17:51 - Finding Your Why

WEBVTT

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Hello, hello, hello, and welcome back to another episode, the first episode of 2024 of Electric Purner Secrets, the Electricians podcast.

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I'm your host, clay Newmire, with me, as always, my esteemed co-host, joseph Lucani, and we are the Electric Purners, just a couple of master electricians with business addictions, here and ready to serve at a whole new level.

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Joe, how are you doing today, by the way?

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I?

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got to admit just before we got on this podcast and we're like you're ready for the first podcast of 2024?

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And the answer was just such a resounding yes.

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I am so happy to be back in the cockpit with you and I'm really excited for the value we're going to be putting out today, so I'm feeling really, really blessed.

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What about you, ray?

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Absolutely, man.

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I am pumped up for this episode, episode 231, how we would start a new electrical biz in 2024, quickest to cash and sustainably.

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Welcome to your freemium daily coach.

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Call the investment, for this is just your time.

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So sit back in the hot seat.

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Join us today, take everything we give, just promise to take action.

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It's totally fair to use everything here.

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Just report your wins back to us, joe.

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This one I'm stimmin' for a little bit.

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Brother, this has been a big planner.

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It's something we've wanted to do for a while.

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There's some shout outs that actually deserve a little bit of credit for this, and we'll be discussing them and their place in this trivial pursuit of everything we're looking for, which is that successful enterprise, right.

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That successful electric printer like Chad German actually is one of them, one of our homies from the Facebook crew that reached out and he said hey, do you guys have a guide for someone looking to start a business?

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And we thought what better time.

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New year, new us, right.

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Exactly, and watch again.

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Yeah, oh my gosh, excitement, excitement.

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How were the holidays, joe?

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I gotta admit, the holidays were really, really amazing.

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New year's is never one of those things that I really feel is a huge big deal, but this year put a particular stamp in something, because we started this enterprise a year ago and where we've come in one year.

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I had to really like I was on my knees with Grace Mann.

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It was one of those things where truly, I feel blessed to have come this far with such a great person and to continue to continue moving forward.

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I feel great.

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I feel really, really, truly great.

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Don't you just feel this pull in time Like it's speeding up?

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Anyone else feeling that if you're with us?

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Like is time actually speeding up?

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Is gravity getting greater?

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Because more and more I'm feeling the back slouch and the years fly by, man.

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It seems like yesterday it was May and here we are, january 2nd again.

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I have an extra expression for that that I learned that I feel would really apply to it, which was do you remember when you were a kid, how it felt like didn't matter what you were doing, whatever it did, it lasted all day, and a day just felt longer.

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And then, as you became a teenager, you used an excavator in the sandbox.

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Moving dirt man for days.

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And you became a teenager and became a little less.

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And then, as an adult, you're like why did this happen?

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So I've heard and I believe this that the introduction of responsibilities is what's lowering our perception of time, when you were a child and you had nothing to do other than just be yourself and live in your best moment.

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As a result, you had all the time in the world and no deadlines, no responsibilities, nothing to follow.

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Now, 30 something years later, running a business, being a proud father, you know, continuing on with licensing, education, it feels like there's not enough hours in the day.

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So it's not that what you're doing takes so much time.

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It's that the gravity of what you're doing requires the time in order to have the biggest impact.

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I like that.

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I like that man.

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What we're going to feel, then, is rapid weight through this little series we're doing, because that responsibility and accountability is going to grow massively, man as we talk through this.

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What do you say we get started in?

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Let's do it All right, all right.

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There's a couple of common things that come up at this standpoint and, by the way, if you guys are with us, live in the Facebook group Electric Pinner Secrets.

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Feel free to drop your own comments, questions, concerns.

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We're happy to go back and forth with you a little bit here, but one of the first things that I hear people talking about when deciding to start a new business like not even in the niche yet, do I bootstrap it?

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Do I get a loan?

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Do I need an investor.

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How much?

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do I need to save to start a company?

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Do you have an opinion at that general level, Joe?

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So it really depends on the endeavor you're trying to pursue, and let me explain what I mean by that.

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So let's say, say, give argument your goal and you're like I'm going to go back into it, I'm going to be a generator specialist and I, as a result, I'm going to do X, y and Z and this is my niche.

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Well, there is a certain amount of things you're going to financially need to buy.

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You're going to need the training, you're going to need the tools, you're going to need the equipment, you're going to need the physical unit itself to work on.

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There would be things that come into that.

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But at the same time, I personally don't believe that you need to take out massive loans to start, because usually what that shows is that you're trying to take everything in one bite and write it off on one bill and realistically it should operate like a deck of playing cards.

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Individual circumstances pile up to create a substantial individual thing.

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When you get a loan, that's not a problem.

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If you wanted to get a loan for a van, you wanted to invest in a shop or something that can directly impact your ability of going and acquiring a sale, then that's an investment.

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But when you're taking a loan to do things that appease the vanity, such as I want a large billboard on the main throughway or I want to make sure every one of our techs has snap-on tools.

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Those are vanities, so it's really.

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Do you need it?

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Well, it depends on what you're trying to chase.

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Personally, I don't think it's necessary in every situation.

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And you said a magic word it was investment.

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Guys, I want to start by really being clear on some important terminology.

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With this business, with this endeavor in mind Most of business as a phrase we've heard before I want you to erase that.

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Let's look at this as every expenditure of this business is an investment and the question becomes investment to what?

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And right now, in the beginning of this business, that question is never more important because we're developing the habits to be a sustainable right, so we're going quickest to cash in a sustainable enterprise.

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That's what's important here.

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So, what investment is worth it?

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And if we're really going back to the granular, okay, how do I get this going?

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I'm planning almost building a business plan around this.

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What investments are necessary?

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Investment to what?

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To get a sale?

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Why?

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Because sale is proof of concept and that takes us into the niche and understanding.

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Well, who are we trying to sell to?

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Just to answer this first question, from my humble opinion, you don't need a loan, you don't need investors and you don't need a whole bunch of capital going into this.

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You can successfully bootstrap it and we've seen people do it, from just listening to our podcast to cashing 5, 10, 15, 20, 30, thousand dollar checks because of some of these service principles.

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Where people went and they got to the sale, you can serve at the highest level and cause great sales and great interactions and great relationships, no matter how much money is in your pocket.

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With, of course, a couple of limitations it's going to be hard with holes in your trousers and no boot on, but assuming there's boots to strap, you can absolutely bootstrap a service electrical business.

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Are we getting into the niche today, joe?

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Yeah, I think it's worthwhile Okay.

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So here's some obvious here.

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Obviously we prefer service, and I've got a whole bucket to unload on why that is Joe.

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But just for the interest in your opinion, what do you say?

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Why is it service for you?

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Why did construction have to go a different route?

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So when I started off, I had gotten the experience of doing new construction Like I knew the margins that were going into it.

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I knew the projects, the deadlines, the physical construction of work, and the difference was is that with construction, it felt that there wasn't a lot of growing room.

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You could take on a quantity of work, but it was very rare that you could increase the quality of your work and still be employed within the same parameters of a normal new construction person.

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What I wanted to do was I wanted to create an industry or an environment where we could do really high quality work, establish relationships with people that would want to keep calling you back and then also having that quality enhanced difference to say it's justified for the investment.

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When you work in a service environment, what you often find is people need you in a shorter time frame, so there's less bidding, less projection projects out and more of hey, this isn't working right now.

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You often are working directly with the person that wants to sign or is capable of signing your check.

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Thus establishing the rapport you build is worth having and the work you do you actually have a direct impact to the family or the person you're working with, like if you were to go to a commercial facility and you were to wire the circuit for a new hot water heater for a 2000 gallon system, yeah, the tenants will thank you, but the landlord who writes the check isn't going to care versus.

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You put in your just single line in someone's basement.

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But now they can power a sub pump or now they can have their hot water heater running.

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They have someone who really appreciates it.

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So, all in all, I'd rather work with the kind of person that would shake my hand and say thank you, joe.

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I'm looking forward to working with you again.

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Compared to thank you, joe, checks in the mail See you in 90 days.

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Absolutely, man.

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I'm going to add some more fuel to this one because I've got actually some stats for you that are going to help with this decision too.

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Of course we're going service guys.

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This is the reason why.

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Did you know that 99.9% of businesses are small businesses?

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Joe, 99.9% were even in the decimals at this point.

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It's absolutely like almost all business out there is small business, the big ones that make it.

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Usually every market's got a big three.

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Those are the ones that exceed but most business.

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I mean there's just hundreds of millions of small business across North America.

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It's incredible.

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Only 9% of those ever realize a million dollar revenue a year.

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Wow, that's a stat I shared the other day.

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So just knowing that alone begins to show how dire of a situation this startup is really in from the get go.

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We're against the odds.

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We've got to do some things right.

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One of the riskiest startups there are is around projects and construction.

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Statistically I don't have the exact number to justify that, but it actually makes a lot of sense and you guys out there, if you're watching this, you're feeling that already.

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Or if you're listening to the replay or on your favorite podcast channel, you're feeling that already.

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Here's where you're feeling it in your pricing.

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That reason you feel compelled to charge $100 an hour or less to be competitive is in large part due to business, to business relationships and places where people haven't actually perceptualized that someone could earn over $100 an hour and it wouldn't be enough.

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But a lot of construction arrangements are looking for the bottom dollar.

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Like Joe touched on this and we've touched on it so many times Quality cost time you can only have two or three and in business to business they want all three but they're willing to cut on quality and we're not.

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And we're not willing to cut on relationships and we want to be invested in that because we want a sustainable business and it's actually a really difficult picture to paint.

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To have a sustainable construction enterprise is actually incredibly difficult Because you don't know when the next project is coming, when that tender is coming, and you don't know that you're going to be a competitive enough bid.

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And my personal favorite, when a company tends to succeed.

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I mean, look around at some of the bigger construction and project outfits.

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How many customers are they serving in a year?

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Might be five, might be three in some cases.

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We're familiar with diversity of stock risk right, and like mutual funds, and why they do that is actually to diversify risk so that if one industry dips, we've got all these other to average out that loss right.

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The same thing would apply with customers.

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Think about it as a business.

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Now let's be specific.

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Let's go back to the million-dollar enterprise.

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If, let's say, you managed a $2,000 average ticket, congratulations, that's a good, good average ticket.

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But that would mean you served 500 customers this year.

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What's the damage if you lose one?

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About $2,000.

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You have 100x more customers than the construction outfit with five customers.

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And if they lose one and they're all equal in average distribution of revenue, then how much revenue did they just lose?

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A fifth of their business is completely gutted 10x, not $2,200,000.

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Does it even make sense to start that kind of business with that much risk?

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The only way I can see someone wanting to do it is and this is just from my own personal perspective is if they were in that mindset of, well, I can do a little more for a little less, which a lot of people they'd dang the carrot for.

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They're like you know what?

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I know a guy If you can come in for $80 an hour, we'll just feed you, work all day.

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Look at the money you're making, right, but when you look at the big picture of it, clay, you're so right.

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I'd rather have a tribe of people that respect our quality in our brand and even if they're willing to pay 2000 instead of 200,000.

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I know that that 2000 will refer me to another 2000 compared to that project.

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Who's like?

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I'm not referring you to no one.

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We're locking you in on this one 100% and honestly, joe, if you and I are starting an electrical company today, it's not where I see myself long term.

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So that means you and I are looking to sell this in a few years and I know that the five customer electrical business that relies heavily on project management, construction management, lead electricians, that whole bit.

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It's going to be a very difficult sale next to a service company that's got thousands of customers and has shown a track record of increasing lifetime customer value and repeating with each customer having that full process.

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So I think it's unanimous between us Are we deciding to go with the service company here?

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100%.

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Get the embossing tool.

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I'm going to stamp my name on it and be like done.

00:15:43.979 --> 00:15:47.153
All right, brother, all right, we didn't discuss this prior.

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But how much money are we starting with?

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Just so we can make this fair, oh God, well, small savings, bootstrap with what I don't know 30k, 40k.

00:15:58.312 --> 00:15:59.937
I mean you can do $30,000.

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I mean it's a hell of a lot more than I started with, but at the same time, it's doable.

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Yeah, we could do less.

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So to put in perspective of where we were at, my partner and I, we literally had a situation where we were both working at an existing company.

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We were building the company while working somewhere else, and then I ended up taking a night job when we started on our own so that I could pay for the material that we were buying.

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I don't recommend anyone go through that.

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That was a nightmare.

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That was a nightmare, but we built it.

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You are sweetening this up, rich, so we are out of time for this one.

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We're going to give an action, but you just paved the path forward.

00:16:37.701 --> 00:16:40.538
We've got a couple of things to discuss then on the next episode.

00:16:41.139 --> 00:16:41.360
Okay.

00:16:41.770 --> 00:16:48.350
One is that sort of part time thing you just mentioned and how we could develop that investment money while we work.

00:16:48.350 --> 00:16:53.863
So more of a bootstrap method versus having a bit of capital and taking the risk.

00:16:55.347 --> 00:16:55.428
Yeah.

00:16:55.590 --> 00:17:02.289
We've got the niche, but also that's going to lead us right into structure of our business.

00:17:02.289 --> 00:17:11.991
A bit of the administrative side, because if you and I are doing this together, we're going to make a partnership, but for our viewers, listeners, they might not have a partner, in fact, they might fear a partner.

00:17:11.991 --> 00:17:17.539
Who better to bring them up to speed on what a successful partnership could look like?

00:17:18.240 --> 00:17:18.922
Amen to that man.

00:17:18.922 --> 00:17:19.583
I'm so for it.

00:17:20.544 --> 00:17:22.391
All right Action item Today.

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If you're starting a business with us today, here's what I would do.

00:17:26.401 --> 00:17:34.904
I would listen to this episode again and I would really contemplate that risk analysis of what niche do I want to serve?

00:17:34.904 --> 00:17:37.536
Is it residential service?

00:17:37.536 --> 00:17:39.410
Is it a level deeper, as Joe mentioned?

00:17:39.410 --> 00:17:47.343
Are we going right for the generators and what do we need to have for stock and investment to sell that first job?

00:17:48.750 --> 00:17:49.614
I can go with an all-star.

00:17:50.055 --> 00:17:50.596
All right, hit it.

00:17:50.978 --> 00:17:51.179
Okay.

00:17:51.179 --> 00:17:53.435
So the all-stars originally for your basic.

00:17:53.435 --> 00:17:54.819
You're like evaluate the niche.

00:17:54.819 --> 00:18:01.862
The all-star is a little bit further and the all-star is do you have a why for that particular niche?

00:18:01.862 --> 00:18:08.681
Because there are days I remember when you were broke as a joke and you're trying to make something happen.

00:18:08.681 --> 00:18:10.484
That why better be strong?

00:18:10.484 --> 00:18:21.138
Because if it's only I'm trying to do this, make extra cash and suddenly extra cash disappears and you're negative money, like most new businesses are when they're trying to establish, you're going to break like a stack of twigs.

00:18:21.138 --> 00:18:27.836
But if your why is like I'm here to change this industry a hell or high water, I'll do it or I'll die.

00:18:27.836 --> 00:18:29.854
Trying Nothing's breaking you.

00:18:29.854 --> 00:18:33.180
So you better have a why that surpasses the need.

00:18:34.471 --> 00:18:36.349
I love that man and that's big guys.

00:18:36.349 --> 00:18:41.470
Don't worry if you haven't found your why or have any idea how to find that we're going to be going into why again.

00:18:41.470 --> 00:18:43.372
Don't you worry about that, guys.

00:18:43.372 --> 00:18:46.190
This has been the first episode of 2024.

00:18:46.190 --> 00:18:56.184
Electricpreneurs Secrets the Electricians podcast, where me and my partner Joe keep showing up to help you master your sales, simplify your pricing and deliver premium level electrical service.

00:18:56.184 --> 00:19:05.536
And tomorrow we're going to be continuing this chat and this is just going to be a banger the whole way through, so you might want to come back Looking forward to it, guys.

00:19:05.536 --> 00:19:06.902
Cheers.