S3 EP51 How Electrical Contractors Survive the $500K/Month Growth Trap | Kevin Sperry

SPEAKER_05 0:00

The profit is definitely lagging behind the growth because if I wasn't growing and I took on a couple of these, I probably would be making money. But every time I take on another one and don't say no, I hire more buying vans and tools and equipment, so that eats it a lot of the capital too. The hardest part of it really has been when I do get to that point and I delegate something that I've been spending so much time on, I start to feel like, well, shit, what am I supposed to do now?

SPEAKER_00 0:26

Hello, hello, hello, and welcome to the Million Dollar Electrician Podcast, where we help home service pros like you supercharge your business and spark up those sales.

SPEAKER_04 0:39

I'm Joseph Lucani, and together with my co-host Clay New Meyer, we're here to share the secrets that have helped electricians sell over a million dollars from a single service band.

SPEAKER_00 0:47

Now it's time for sales. It's time for scale. It's time to become a million-dollar electrician.

SPEAKER_01 1:00

Kevin, I gotta ask you one thing and let you know, by the way, congratulations. You're in a very small club, uh, exclusive club of people who have now been on the podcast twice. And you know, it's funny, there are just there's so many of our clients, peers, friends that come on here and really impress us. But even in this short time period, I think it's only been maybe six months, five months since you're on here, uh, you've just been exploding, growing more and more and more. And I understand it's not all service, there's some projects in there, but man, we'd love to go through today, just like a, what the heck is going on? Why is this blowing up for you? And B, how are you controlling it? How are you feeling about it? Um, and how are you gonna maintain this trajectory? So, again, welcome, congratulations, man. Tell us a bit about your uh your big month that you're having, or just had rather. Was it August?

SPEAKER_05 1:52

I'm gonna look here. I think it was uh definitely July and August, and let me see about June. So, yeah, I mean, I can see the total total outstanding in July is 500,000, and August is 500,000, and then let's see. So August was about 600 total, and July was about 650 total.

SPEAKER_01 2:20

Wow, massive. Just just so we uh reflect back on this. If you guys haven't seen Kevin's first episode, please go watch that. We were talking about a few numbers there that were already exceptional. Kevin, where were you at this time last year? Kind of month-to-month uh average sales.

SPEAKER_05 2:36

Uh probably 60, 60,000, 30 to 60,000 range. I don't know exactly. And this, you know, half a million months isn't I didn't get paid half a million in a month. That's just just sold work. So a lot of it's work in progress, a lot of it's waiting to start, but you know, two months in a row selling over 500,000, I think is already uh yeah, it's a pretty good start.

SPEAKER_01 3:01

Yeah, yeah, amazing. Yeah, congrats. And what was your total annual revenue last year, if you had to uh remember that? 750. What is it like to beat your last annual uh uh revenue in like a month and a half?

SPEAKER_05 3:16

Uh it takes a lot of figuring out, a lot of pivoting, a lot of delegation, and uh and and a lot more management in different ways. At this point, there's a lot of uh a lot of commercial projects that are coming through, some big, some small, but we're still pretty steadily doing 80 to 100,000 a month out of one van in service. You know, it's it comes out to like about 3,000 a day out of that one van. And in order to free myself up to be able to sell all the other stuff, I took hiring the CSR, Olivia, to take all that back end and scheduling and answering off of my plate. And then, you know, it took hiring our sales tech John to completely take that portion of it away from me because dealing with all these homeowners is just too much to then go and be estimating eight million dollars a month in commercial work.

SPEAKER_04 4:12

I love how you say it so nonchalantly. Like, can we just address that? Like you're like, yeah, you know, it's 500,000 plus a month, but it's all right. And yeah, I'm estimating about eight million a month, but it's okay. I gotta give you credit, man. Like you should like dust the shoulder a little bit, give yourself some credit.

SPEAKER_05 4:26

I want to I wanna verify that I'm actually making any fucking money before I've got no idea. I mean, you get on some of these projects, and you know, we started like five projects at the same time. And like our first month's mobilization, and then you know, our our expected completion for that first month's billing. If you start these jobs at the beginning of the month, the billing cycle's not over until the end of the month, and then you got 30, 45 days after that and 10% retainage. So you could be 60 days or better on five projects at the same time without a dollar. Yeah. And that makes it really hard to know if we're actually making any money unless we're doing the proper job costing, which I'm I'm starting to put those systems in place, but this all kind of happened faster than the systems grew.

SPEAKER_04 5:20

Yeah, no. What I want to know out of all this is it must take a hell of a lot of capital in order to front five different projects all at once. Have you like figured out like a secret cheat code for getting better credit or loans? Or do you have a huge nest egg? What have you been doing?

SPEAKER_05 5:33

No, right now I don't have any money. Um as far as money, we have no money. Yeah, our accounts receivable is probably somewhere between 200 and 300,000 right now that's that's due. And so I've been scrambling to collect on as much as I can this last week because it started to get real tight. You know, I do have a line of credit that can bridge those gaps, but I try not to use it unless it's an absolute last resort. So I haven't had uh a catastrophic issue, I haven't had to miss any payrolls or any payments to suppliers or anything like that. But it's it's cut close a couple of times. Dangerously close. And the service work is what's funding this. I'm seeing two lanes. Yeah, I mean, we're doing say what, 20,000 a week or something like that in in service out of that one van alone. And then we're taking $25,000 a week and putting it into payroll. So most of that is covered there, and then you do get your your little drips of payments throughout these projects, and you know, you'll you might start five and close one out, and it all it all covers it. The the profit is definitely lagging behind the growth. Because if I wasn't growing and I took on a couple of these, I probably would be making money. But every time I take on another one and don't say no, I hire more, you know, I'm buying uniforms, I'm buying vans and tools and equipment. You know, I bought I think four vans and a scissor lift in the last four months. Okay. So that eats it a lot of the capital too. Now I'm hoping, and I'm not sure, but I'm hoping that in the next uh couple of years, as the growth uh slows a little bit, because I, you know, I went from five guys to to 17 over the last uh six to eight months. That um rate of growth it can't keep going. I mean what you get to 30 guys, and then that's kind of where I've I've seen it, it's it kind of evens out. Um and that's not saying that that's a goal or not a goal or whatever. It's just to have the uh the capacity to to do what I'm being asked to do. But like I was saying, at a point that I'm hoping that they uh that those payments on those jobs catch up to the growth and and start producing a profit.

SPEAKER_01 8:06

Yeah, that's really good. There's a few things in here uh worth touching on. I'm seeing two lanes develop here, obviously. Uh we uniquely are positioned here to have a great conversation about service as it supports the cash flow of a company, which we've discussed in in many, many episodes in many ways, but also this projects line, and I think this this episode we can make it very clear that you know projects don't have to be evil, but there is a playbook, just like you're mentioning. Um, you know, I think what soured the well for me in projects is where they do go wrong, where there are problems where we buy projects to keep busy because that's all we know. But I love actually seeing guys be able to do both. We've seen it be very lucrative. And one of the things I want to touch on in this podcast, which I haven't dared try before, is a bit of an advanced concept, but it may help you, Kevin, to understand this too. So I'm gonna try and touch on it today about how beyond break-even we become more profitable in business. And that's one of the reasons why a healthy service department and projects on the side can actually give you more estimating freedom, more ability to weather the storms of delayed pay, and still do really freaking well. And we really wish that on you, of course. So you're in it. Great time for a podcast. Thank you for being vulnerable already. And we get to talk about some of these things. Um, yeah, it's super, super exciting. Let me ask you this quick though. Why say yes to all these projects? Are you at a no now if something new comes on your plate, or are you still looking to take more?

SPEAKER_05 9:49

I'll take more, and I don't have a good answer as to why. Okay. I just I I I rarely say no. I do say no to the out-of-state contractors that that work all over the country and you know you're not getting paid, or they're gonna fight you on everything. I don't say no. I mean, this whole this whole business is the project side of it, is all relationship driven. So I develop a relationship with a builder or a developer or whoever it might be. And once I'm there, I don't say no. And then they just keep throwing more and more and more at us. You know, I'm not really throwing cold bids into the wind on Blue Book or Plan Hub or anything like that. But you know, we work for people one time, they like us and they keep calling us back. And once once you're there with me and I'm there with you, I don't, I don't say no. When I sometimes probably should, because the fear is that if I say no to this one, somebody else is gonna do it, then that then they're me for those guys. Um, and every no to me feels like a missed opportunity or an opportunity for for somebody to go a different direction.

SPEAKER_01 11:00

Yeah, I like that. Even to reframe you a little bit here, then you're not just throwing a price out there. These are people you've worked for before and been able to profit on this work.

SPEAKER_05 11:12

Not all of them. You know, some of them are people that I've had a good enough conversation with that I I can say you reached out to me because of this or that, or however we got introduced, and we talked, and they understand how I run my business, and I understand how they run theirs, and it seems like a good fit. And I might work for somebody one time because it's a job that's that's close by and and it's a nice little job or something that seems profitable, and from there it snowballs.

SPEAKER_01 11:41

Nice. You said something there. What do you think guys need to know about your business before working with you?

SPEAKER_05 11:48

So, what they need to know is that I'm not bidding to everybody. I like to work with people that that like to work with me. And so I've got a perfect example of uh something like that. I got a call from a a large commercial contractor in in the area, pretty much saying they've they've seen some of our work, they they they like what we're doing, and they're they're rebranding their company and and want to bring in a new team of good, dependable subs that they want to work with going forward. And so I went over there and had a meeting with them, and they sent me like 10 invites to bid, and I was bidding to them, and they're coming back to me, like, yeah, this looks great. You know, we're gonna work together, we're gonna get one of these. And uh then I went to a site visit with them and I walked in and saw seven electricians that I know. And I turned around and I walked out and I made a phone call and I said, Unfortunately, I'm no longer bidding to you. Because that's not how I operate, it's all relationship driven. I'm not gonna be a number on a spreadsheet. I'm gonna be the guy that you call that that you say they'll get it done, they'll be fair, and you know, I have no problem if you've got two other electrical contractors that you work with, and maybe those two other are above me in your on your totem pole. But even if I'm at the third spot, the first guy's too busy, second guy, the job's too big, I get it done, and now I'm now I'm number one.

SPEAKER_02 13:14

Yep.

SPEAKER_05 13:16

But I don't uh have any interest in being one of 10 bidders and then getting uh an email saying that the job has been awarded, now give us your best and final offer. Like I didn't already do that.

SPEAKER_01 13:28

Yeah, Joe, I'm seeing uh a correlation here to remember we had Hans on not long ago. Yep, very similar thing, right? They were very project-based, doing a ton of spec homes. Kevin, did you listen to that podcast?

SPEAKER_05 13:41

But no, I haven't had time to listen to anything in the last three months.

SPEAKER_01 13:45

He's busy. Pacific Northwest, doing about 11 mil. He's in our group too. You probably want to connect with him, honestly. I bet you Hans would be an awesome dial in your pocket because he's been where you are. Um, yeah, he he's been uh attached to it, grew it from two million to 11 million uh a year. So doing big stuff anyway. Similar thing. He said, Hey, we were doing all these spec homes and basically not making any money, and we just don't do it anymore. We just say no to that work, and we only do custom, we only work with the people that really want us. They want us for a reason because of our people, um, because of our our the way we approach the work, the the efforts, the the way the office works with you to get it done instead of against you, and constantly in change management process and all the the ugly lawyer shit of it. Um, so it seems like a similar feel there, Kevin, from what you're saying.

SPEAKER_05 14:37

Yeah, so we um maybe a little bit like I'm always in range with these projects. A lot of times I'm not the low guy when there's 10 bidders, and I would say most of the time I'm not. And we still are winning work because we're working with people that want to work with us and understand that like I I here's a good one. I sent out a bid and I accidentally doubled the lighting package on it. And I got a phone call that said, Hey, we you're at this, we need you 40 grand cheaper. And I was like, There's no way anybody could do it for that. And then I went back and looked and saw that I made a mistake and I came in too high. And I actually called them back up and I said, Yeah, I know you said you want me 40 grand lower. How about 50? You know, because I actually needed to be 10 grand or 15 grand less than what they expected, and so from there, they're not gonna they're not gonna go and get 10 bidders, they're gonna call me and and know that I'm gonna give them the honest the honest answer of what it should be, and then I'm not gonna come in super low and make it all up on change orders by nitpicking every little thing and screwing the customer and the GC. I'm gonna tell them what I need to do it, and I'm gonna do it.

SPEAKER_01 15:55

Yep, fair enough. That's good. In terms of growth, Kevin, you mentioned you went from five people to 17. How are you finding staff, electricians for these projects?

SPEAKER_05 16:06

That's tough. That's been one of the hardest parts is the the people and the vehicles. I there was a couple on like Indeed. There were a couple that worked with uh some guys that work here previously at uh at companies that they had already left. I've got I think four or five guys that came from the same company over a couple years now. I'm sure those guys don't can't stand me. But yeah, it's just a mixture of guys that know other guys and uh and sorting through resumes on like indeed smart sourcing.

SPEAKER_04 16:42

Well, you must be doing something right. Because if you think about it, to hire that many people within a course of six months, most people can't get that many resumes coming in. The fact that you had that many and had enough to filter out and acquire good people. I mean, like, were they mostly like journeymen, or did you have to like you know dip into the apprentice pool? Like, like what kind of caliber are we talking about?

SPEAKER_05 17:01

So I've hired a couple of apprentices, but mostly like I hired the the uh sales guy, I found him on Indeed. My commercial project manager, I found him on Indeed. I think my estimator I did too. And then I've got one guy that came from you know a recommendation from one of the other guys. And uh the apprentices, I'm I'm pickier about apprentices than any other position because they're like the the guys that know what they're doing and they're seasoned, they're you're just getting what you're getting. The apprentices, there's a ton of them out there and they're all looking for work. I would rather hire somebody with uh with half a brain and a good attitude than somebody with an extra year of experience at that level. And I've gotten pretty lucky with with how picky I've been with that. They're they're just easier to find, so easier to sort through. And I've got this one who came from no experience, like a kid that had an accounting degree and worked at a bank and decided he unlikely, and came over here, and now I've got Foreman telling me they need him back on the job site because he wrote down everything and where every circuit went. And I'm like, you weren't telling him where to pull this stuff? And he's like, No, he looked at the plans and knew what needed to be done. But I don't know the way he routed it.

SPEAKER_04 18:18

So I guess on top of that, you also have to consider that if you were growing commercial and you're hiring guys in that background, having people with additional years also comes with additional baggage. So by going with the apprentice route, it's like, yeah, I have some guys who can get it done, but I also have the way people I'm really trying to develop. And they may be a long-term play, but when they actually are ready, they're gonna really be an asset to the company.

SPEAKER_01 18:39

Yeah. Oh, absolutely. Uh, just a little nugget for you, brother. As you grow, like you said, maybe you need 30 people in the near future. Uh, we're having a ton of success right now with other people in the group uh doing Facebook ads for electricians, like uh Andy Craig. We got a hundred electricians in like 10 days. Some of them are the third and fourth level or whatever apprenticeship as well. But I think he said there was about 25 qualified electricians from that. Uh, that cost him only in ads like 350 bucks. It's just like the best, most affordable recruiting method there is right now. That in our experience, we've seen it work for a few. Have you considered trying that, or is that something that's been off the radar?

SPEAKER_05 19:23

I did meet with Austin about that at some point.

SPEAKER_01 19:25

Oh, sweet.

SPEAKER_05 19:26

Um, it didn't end up going anywhere because right as we were kind of talking about it, I found the last guy I needed. Yep. At least at the time, but it's still it still is in my uh in my head.

SPEAKER_01 19:37

Yeah, yeah, totally. I I keep telling guys, it's like a Rolodex. Uh just like my journeyman told me when I was first starting, right? Rather looking looking at it than looking for it. It's like, man, if I had a bunch of names and I had just a quick chat with a bunch of these guys and I narrowed it down to 20 that are ready to freaking go, how valuable would that be? So, yeah, when the time's right, man, yeah, give them a call again because that is working very well. Uh Jacob had similar success too. Yeah, really, really good. Okay, sweet. So if you keep going at this rate, then where do you think you land at the end of the year?

SPEAKER_05 20:13

Like revenue?

SPEAKER_01 20:14

Yeah. Yeah, revenue, team size, number of vans on the road. You you must think about this right now, right?

SPEAKER_05 20:21

I just bought the 10th truck today. Um, I mean, they're all used Chevy Expresses. 10 bands of 10 bands, man. I just started switching to uh yellow, and uh, I was getting made fun of by uh some of my friends and neighbors until I explained it to the one, and I'm like, yeah, but you all noticed it. And he goes, Oh shit, that's genius. Nice touch. They're they're ugly, but you can't miss them. You know, there's some some larger, like uh, you know, those plumbing HVAC electric companies that everybody hates. There's some larger ones around here that uh that are all running yellow, and uh you can't miss them. I've got people now telling me that every time they see one of those vans, they're thinking it's me.

SPEAKER_04 21:13

Nice.

SPEAKER_05 21:14

I'd probably miss it.

SPEAKER_04 21:15

I'm colorblind with yellow.

SPEAKER_01 21:17

Are you? Yep. What color is the shirt behind me?

SPEAKER_04 21:22

Uh I I'm assuming I'm assuming it's yellow because you made the statement. I can't read in yellow. I can't read in red, and I can't read in yellow.

SPEAKER_05 21:30

Interesting. All right. Well, it's not gonna work on you then.

SPEAKER_04 21:33

Yeah, I'll see a big blur moving, like active camouflage is moving around.

SPEAKER_05 21:37

But to answer your question, I think um a million and a half because the the growth came so late in the year. I think that's like our floor. And my goal this year was one point one. Nice. But I think that two is plausible. Yeah, it really just depends on how much of this work in progress gets finished and. And paid and closed out. But you know, we've got uh a couple hundred thousand dollars worth of solar work too that we just started doing, and I have no idea uh solar. I just hired a project manager that came from uh an industrial solar background, and he had some contacts and brought him in and said, 'Here, I'll price it, I'll procure it, and I'll do it.' And I said, Cool.

SPEAKER_01 22:24

So, Kevin, we knew that there was something special about you from the day we started working together, the grind, the intensity, the forward motion, that momentum. Like even I remember our first call, man. I think you had a win of the week for some reason, or or maybe I don't can't remember if you paid in full, but we got on a call right away, a one-to-one strategy. And you were literally driving down the road, going to estimates, getting clear on okay, how do I get my CSR to do this? How do I position this? How do I get it? It was so forward. And there's a type of person that that does this that's really risk-verse, uh, excuse me, risk tolerant, and and just sprints towards it. Have you always been this way? Is this something you've known about yourself? What's driving you to just run blindly, even at this thing? I mean, it's not blindly, that's not fair to you, but you know what I mean, right? You're sprinting towards the danger here.

SPEAKER_05 23:21

I don't really know. I, you know, you have um it's saying in high school, right? You have all these uh overachievers that are doing some kind of group project or something, and they they pat themselves on the back and say, I'm such a good leader. And then they go and and go to college and get some job working in a cubicle and not leading anything. At that point, I had not ever considered myself any sort of leader or or even all that smart. You know, I I was all right um as far as grades and whatever, but never put that much effort into it until I got into this and realized that I love it. It's like playing around with the numbers we're playing around with and the projects we're doing. Every morning I get up and it's it feels like gambling. It's like every morning I'm getting up and go to a casino almost, is what the feeling is. And it's exciting, and it keeps working. And so I just um I keep going at it because I'm like, all right, what's the next the next relationship we're gonna break into that we've been trying to? And what's the next big project we're gonna pull off? And and how are we gonna get all this done? And what's the next thing I can delegate and and hand to somebody else so I can focus on something new? The the hardest part of it really has been when I do get to that point and I delegate something that I've been spending so much time on, I start to feel like, well, shit, what am I supposed to do now? I've got an extra 45 minutes today. What do I do with this time? And that's drive me crazy. And I always find something to fill it. That you know, a new responsibility for myself to take it further.

SPEAKER_01 25:04

And and brother, you mentioned it feels like a casino. Are you addicted to this? I don't know. I don't think I've considered it. Do you think there's some bad bets in here too?

SPEAKER_05 25:14

Bad bets? I think that uh there's risk. I don't think there's any bad ones. I think there's some riskier ones, but they're hedged by some safer ones.

SPEAKER_01 25:24

Pound a stake in the sand here and just mark this moment because it here's the thing what people don't realize. Some people will be listening to this and referencing their own experiences, and they won't be wrong for this. They'll roll their eyes and go, oh, Kevin, some people will listen to this and go, Holy shit, this guy's inspiring. And then there'll just be a bunch of people in the middle that just can't wait to see what happens. But what I can promise you, Kevin, this is the only guarantee out of this, is that fuck man, you're learning at a hundred X the rate of the average electrician right now. You're learning at even maybe a 10x rate of even ambitious, the average ambitious electrician business owner right now by absolutely gunning for this. I used to, for a long time, like fear and built a fortress around never failing in business again after my first business failed. Even if some of these riskier projects backfire, what you will learn from that, what you're learning already, and the time that we've come to know you, feeling blessed by it already, right? Like you are growing at a faster rate than, man, a lot of people, a lot of people. And we talk to a lot of electricians. So I hope that that comes across well and that people listening understand this too. It actually doesn't matter if a project crashes and burns because of the lessons that you're gonna take from that. So I hope you keep going, man. I do. I hope, I hope that you recognize that you're you're blazing a path right now, first for yourself, but second for others, to see what that level of execution, trust, risk tolerance, and sprinting towards something results in. Massive. It's a massive, massive amount of effort. And I the moment you said, even like, oh, well, I just hired a project manager for that. I just hired someone with experience. It reminded me of Henry Ford and the contempt he was held in in court, right? Like how you can't do these things. It's not unethical to do them because you yourself don't know how. And he said, What? I have a button on my desk for every uh subject matter expert in each of their given fields. I don't need to know it all. I just need them to do work for me.

SPEAKER_05 27:47

There's at least one project that I know, maybe two that I know are not panning out as well as they should have. But those are hedged with five projects that I know right off the bat are gonna be fine because I've worked with these people before. I've done projects very similar and I already know what to expect. So if I'm losing money one place, but I've got 10 other projects happening at the same time, I'm still not too worried about it. I'm gonna finish that project with a smile on my face so that when that contractor calls me for the next one, I'm ready and not gonna take a bath on it.

SPEAKER_04 28:24

That I think is the biggest deciding factor right here. Because I know there are so many electricians that once they realize they're walking away with a loss or they're walking away with nothing, they will start finding every possible avenue in which to try to rectify that and to collect, whether it's change orders or whether it's moving faster or cutting quality. I love the fact you're like, I'm gonna lose, but I'm gonna lose with dignity, so that when they decide I need another person, that like this guy did great, even though the job went south for him. I want to bring him back in. That's the kind of guy I want to work with. Like, I think that's a huge credibility boost, not only to everyone who's working with you, but all the contractors that you have and all the connections you have. Because I'd rather work with someone who I know is going to treat me right, regardless of their circumstance.

SPEAKER_01 29:08

Yeah, really good. You mentioned service already and kind of the part it's playing and just that fast cash flow and how that's helping the business. You were doing all the sales yourself at one point. Now we've got this. I think you said John, Kevin. Is that his name?

SPEAKER_05 29:23

Yep.

SPEAKER_01 29:23

Yeah, John's in the mix. What was that journey like? And it, you know, how important is service to your business uh to right now for that cash flow?

SPEAKER_05 29:33

Right now, for the cash flow, it's what's keeping us afloat, you know, and then in two weeks from now we'll be rich, and then in a month we'll be poor again. And but that's a steady, a steady baseline that we can uh keep things moving with this rapid growth. I mean, I I wouldn't have been able to pull it off without the the service and at the at the pricing and the the systems behind it that I learned here. So you know I brought John on. It kind of explained to him that he wasn't gonna be pulling wire every day in a in a new construction rough in, and that this is what I have envisioned for you. And he spent uh two weeks riding around with me, kind of getting the the handle on how I how my process is, and then however long he spent, I'm sure he still pops into classes, uh, but I I don't actually know. And uh, you know, he went through all of the uh the videos and and uh then we sent him out there and for a week or two I was reviewing everything that he had done. That was weird. Height adjustment, yeah, adjustment. Yeah, oh I didn't know this did that.

SPEAKER_01 30:45

It just lifted, yeah.

SPEAKER_05 30:47

There you go. That freaked me out.

SPEAKER_04 30:50

I was wondering, I was like, man, passing guests or something.

SPEAKER_05 30:53

I was like, no, no, no, no, no, the gas just started going like this, it wouldn't stop.

SPEAKER_01 30:57

Yeah, by the way, Tony has control of your desk now. That that happens on the podcast. We hacked it control your Tony get him on the uh the back corner cam. No, sorry, you were saying a week or two checking everything uh with John, and then what happened?

SPEAKER_05 31:15

Yeah, I was looking them over, and then um from there I uh just gave him the reins and said, here, you know, you uh estimate it, schedule it, and then uh and then get the material for it and make sure these are these are your jobs now.

SPEAKER_01 31:32

Okay, complete ownership.

SPEAKER_05 31:34

Yeah.

SPEAKER_01 31:34

See, this is another interesting point and something that guys need to pay attention to in this this call because when we have to do something, it tends to get done a lot faster, doesn't it? Kevin, it doesn't feel like you had much time or grace, like this just had to work. John had to take it, the decision was made, and so just like all the other decisions you're making fast and leaning into action, this was one of those too. Just get it done and go. Was John performing right away in a way that you thought, oh, this is gonna work for sure? Or was there still some risk involved in that too when you did step away and go, you got this, let's see what you got.

SPEAKER_05 32:11

There's always risk in it. And you know, of course, it wasn't like hitting my numbers right off the bat, but you know, after a month or two of settling in, it's it's right where it should be. Yeah.

SPEAKER_01 32:21

And I think from our first podcast, like you were kind of you were hitting 100k months in service too, I think.

SPEAKER_05 32:27

Uh it could be. I don't it's it's hard to remember at this point.

SPEAKER_01 32:31

Yeah, it's it's been so much has happened. Um I've got you know a calendar full of uh due dates here and uh uh so yeah, we talked about you going from about a 60k a month company to 100k and service being a big part of that, getting your price right, offering the options. I think you said John's kind of averaging 80 to 100k months now himself, too, 20k weeks.

SPEAKER_05 32:56

Yeah, probably something like that. I mean, some of those service is still things that um I I think he's probably selling himself closer to 60 or 70. Um because there are still ones that like you know, somebody will call me up that I've already done a bunch of work for, or I'm in the area and I do one, you know, a one-off. And so I'm still probably putting 20 to 30 a month towards that that service crew, but without driving around meeting seven homeowners a day and telling grandma it'll be $300 to fix your doorbell while I'm firing off a million dollar estimate in the truck.

SPEAKER_04 33:33

That's insane to think that you have the time for seven calls a day. Like the thought is we're supposed to be maintaining the three to four at the max, and you push it on top of that, and you're also doing huge million-dollar quotes in your van between calls. Like, how do you have the mental bandwidth for this? Like, what does your personal life look like that gives you this kind of mental fortitude? I don't I didn't have the bandwidth for it.

SPEAKER_05 33:56

Okay, but how do you think mistakes were being made? It was it was working uh enough, but you know, there were there were mistakes being made here and there. There were things that I'm forgetting about, and I still am. Like, I gotta write down bid due dates and I gotta remind myself to follow up with this person and that person and do this, and that's gotta get done. So it's not so much uh you know having the mental bandwidth to remember it, it's just having the mental bandwidth to do it when it's in front of you.

SPEAKER_04 34:25

Do you like work with like priority lists and whatnot? Because I know what keeps me organized when things are too busy is like to order things from highest priority to lowest priority and constantly chip away at the highest priority ones, eventually get to the smaller ones. Like, do you try to get momentum by doing the small ones first? Or you're just like I have to tackle this big one?

SPEAKER_05 34:42

I don't typically uh chip away at anything, I just sit down and get through it when I need to get through it. The residential service estimates, when I was doing those, it was like Olivia would schedule it and it would be you know a one-hour arrival window, and that was my that was my hour to get there and do it and be out, and then on to the next one. And so it worked, but I had to be on it, and that was the priority there. And then when I get home, then I sit down and get on the computer and do whatever else is is on the top of my head, and then search for what am I forgetting? What needs to go out today? What do I need to order? Do you keep notes? Like, because it seems like a lot to hold. It is. I mean, I I flag emails that seem important, and I I text, you know, I the Olivia has a has a work phone and I text that sometimes all night with like, remind me to do this tomorrow. Or I send her a screenshot and like this needs to get done, and I gotta get on this. And so she keeps the notes of what my reminder should be because I'm constantly just moving around too much to even have a second to write it down. And if I do, I might write it down here on my on my desk. But then if I'm out there and I'm not looking at that, I don't know what it is.

SPEAKER_04 36:00

What about like a voice record function? I'm sure it's gotta be just somewhere where you're like, I'm just gonna speak into a recorder and then save that information and have it auto-remind me at the end of the day.

SPEAKER_05 36:08

Yeah, I could do that, but then at the end of the day, I'm already wrapped up in something else.

SPEAKER_01 36:12

Sounds like it's just putting all uh on the CSR. CSR has been a big help for you.

SPEAKER_05 36:17

Huge help. You know, like I mean, last night, right? I it's 11 o'clock at night, I'm trying to fall asleep, and uh, I had to text my my PM and say, make sure the rotation is correct on those rooftop units, just because that's the thing that'll keep me up at night if I don't get that out, because I don't want to go and check it or find out that it was a mistake was made later on. But there's things like that, and then all night long I text that that work phone with we gotta do this and this and this, and I'm pretty good at getting things done quickly. So I don't have a pile of crap that needs to get done at the last minute, but no, I don't have any sort of real system for keeping myself organized.

SPEAKER_01 36:58

Sounds like your brain works a lot like mine. I kind of liken it to, of course, I'm pilot and training, so you know, obvious here, but I liken it to air traffic control. That's how I look at controlling a business, too. I have a really bright mind for remembering all the small details for a short term. And my personality is to come through and check on those details so that I can keep going on to the next things that come up. But it's really not meant to like Joe, you you and I have recognized this for so long now. You're the opposite, and like you don't have all the small details, you just have depth and what needs to be taken to 100%. That's never been my strength. I'm the 80% guy all day, every day. I want people to do the 100%. Well, I just make sure rotation's right, like Kevin said.

SPEAKER_04 37:48

They think combined we make one really solid business owner.

SPEAKER_01 37:52

Yeah, yeah. Hey you guys, if this episode sparks something for you, imagine stacking that every single week. That's how businesses stop flickering and start running steady. If you subscribe to the show or leave a review if you're on audio, and if you're driving down the road, please pull over when it's safe because I've got something you're not gonna want to skip. For every person that subscribes and or leaves a review and fills out the form below, letting us know that you did that thing. We're gonna draw one monthly subscriber for our open circuit lifetime membership worth $1,500. And that's not all. Every six months, we're actually gonna draw another subscriber for our $5,000 scholarship, which you can use for any of our electric service packages to get your business and your service rocking better than ever. Come on, guys, let's brighten this thing up. Is it gonna be you? Back to the show. Something really interesting you said, Kevin, though, too, is like, man, it's crazy. You were doing 80 100k months with the service process, but it also sounds like you were not anywhere near your max either because of the compressed window of those appointments. I I wonder if John's in those same compressed appointments. Is he also running six, seven calls a day?

SPEAKER_05 39:07

No, not that many. Let me see. I can pull up right now. It's a good insight, Clive.

SPEAKER_01 39:12

But uh yeah, just because an hour to get there, build rapport, understand what they want, when they want it, why, who who found it or or experienced it, right? Do the whole process and provide options and get an answer that's just man, that's tight. I must have been falling short in places.

SPEAKER_04 39:32

I can imagine doing an opportunity call like that because you plan on doing the two-call close, but like the demand call is way too tight. Because if you're thinking about like, how do I build these options in a realistic time and communicate them with a 30-minute diagnostic?

SPEAKER_01 39:46

Yeah, which is a good thing, not a bad thing. It just means there's way more runway. Go ahead, Kevin.

SPEAKER_05 39:50

So I got it pulled up. Monday, he had four, Tuesday, six, Wednesday, two, Thursday, four, and Friday, five.

SPEAKER_01 40:00

And I was a betting man. I bet if you did get John and Olivia to our CSR call um and the uh sales call, that we could do some schedule leveling, a bit of lead scoring in there, too, prioritize the best calls for John and give him enough time. And I bet you there's more uh juice out of that, with John being less busy and more productive. I I would put money on that.

SPEAKER_05 40:24

My thought is always the the more that get they get done, the more that gets sent out, the more work that comes in, the bigger numbers.

SPEAKER_01 40:33

Spray and pray. Volume. So that's interesting, though. And if you're open to discussing it for a moment, like I had the same chat and call with uh Bill Goldman in class one day. Here's what Bill did that a lot of people hate, and I bet maybe you tell me if you would do this too. He went to a third call close, so he went three times for free, allowed that person on a schedule three times in two weeks. Would you guys do that?

SPEAKER_05 41:02

I don't think we would say no, but I wouldn't be happy about it.

SPEAKER_01 41:06

Yeah, but here's what we found because Bill tracks all his sales metrics, he actually came in for a different problem. It was the first thing I saw. I'm like, oh, you went three times, but the ticket was over 10 or just under, it was $10,000. Yeah. So then when we look at ticket, and then we look at average ticket, well, his average ticket was about $2,200. So if he had rushed three appointments and got average ticket, $2,200, that would have been worth $6,600. Because he stayed, built the relationship, went deeper with them, they chose more $10,000 ticket. That's over the average ticket. Now that's just one example. Is it going to work that way absolutely every time? No. But that is how we're seeing guys do 150, 200k months, even 250, 300k. Actually, got a meeting with a company after this. Guys doing that much from fewer calls with more intent.

unknown 42:00

Yeah.

SPEAKER_01 42:00

More intent to serve, if that makes sense. I I think you guys could too. I just think maybe worth the consideration. Thought we'd bring it up live here. Hope you don't mind.

SPEAKER_05 42:09

Yeah, I guess the thing that would uh that would strike me is if somebody's gonna spend that, they're gonna spend that. I don't think, and and I could definitely be wrong. I don't know what the hell I want to jump in on the case.

SPEAKER_01 42:21

That's a good debate. I disagree. Uh my first touch on it is just like in night school. I just had a guy, Kevin, with a similar thought, but his thought was people are tired kicking on the phones, they don't want me to the house, therefore, people don't want to spend. If they're gonna spend it, he said the same thing. If they're gonna spend it, they're gonna spend it. Do you think he's right in that case? And you can't get to a house, everyone's tire kicking, there's there's no way.

SPEAKER_05 42:48

That one seems a little bit uh a little bit different. I think when you're over the phone, and I say this all the time, you're just a number on a spreadsheet. When you can get there and actually meet somebody, then they can put a face to the name and you can build that trust and and make your suggestions and and walk them through what what it is they they want or they they don't know that they want. But I don't think a matter of going twice or three times is gonna make that you know 3,000 difference. I and I like I said, I don't I don't know what the hell I'm doing here. I'm just winging it. So I could be wrong. I probably am wrong.

SPEAKER_04 43:25

You know, it's less about being wrong or right, it's more about the perspective that comes with it. Because I I'm in the very different camp. I believe, and I actually have been a perfect perfect example as a customer from this situation. I remember when I've wanted to do work on my own property, I had an idea of what I wanted. And I believe that I'm as a someone who's in the trades, I have a good idea like how I'm gonna get it done. But I have found people come to my home and take the extra time, and I've learned I actually don't want this, I really want this, and the budget went from here to here. So, yes, I Would have spent the money. You're right. If I'm going to spend it, I'm going to spend it. But by taking the extra time and making sure that I understood one, they're the right fit, but two, they've got some incredible ideas that are really going to benefit me. Now I am going to buy from them, but I'm going to buy at a higher ticket and I'm going to be happier about it. So a lot of times people are worried and they say, Well, I don't know, it's not worth the second call. But if you adjust and actually look at the metrics of what is your percentage base on that second call, you'll find that the conversion ratio goes high enough with a high enough average ticket that does justify that extra trip if you put them side by side.

SPEAKER_01 44:38

Yeah, I think there's also an argument to say, you know, could Bill have closed that in two calls? Sure. Yeah. And should we try? Should we stay and stay in that ridiculous moment? Sure. I think though the debate here, which is a great one that electricians have, so I love that you brought it up too, is how much time does it take to build trust and melt resistance so much that they understand and are able to make a choice about what's best for their electrical system. If you accomplish those things in an hour, then it works. And so there's not really, like you said, Joe, it's not really a right or wrong, but there's an average time it takes to actually build trust, to actually educate. And every job would be a bit different. Every situation is a little bit different because of the homeowner's occupation, the homeowner's understanding, the homeowner's relationship to you or referral, etc. So we just operate on the best average data that we have, which is typically uh the longer window just equates more trust, less resistance, more buyer ability.

SPEAKER_04 45:48

I have a personal belief when it comes to the three-call close, because there are circumstances where I do think it's very justified, but usually it's hinged on how well we did the now or later stuff. Because you could do everything possible and agree that everyone's gonna be there and then find out for some genuine reason it couldn't have been, or a second spouse wasn't able to be there. And you have a choice. It's really one or the other. Hey, I took the time to build value, I did connect, I came back a second time. I could either send them the email and have that person then present to their spouse on my behalf, or I can say, I'm gonna sunk cost this, I'm gonna go to the third call and expect I have the highest chance of closing if I go, compared to the email and the wife selling it on my behalf. So you can look at it and say, how much is this ticket worth? And what kind of relationship is this worth? And is it worth taking that third? A lot of times the answer is yes, but four is usually like out. If they're not moving forward after a third visit, that's usually where you do a strong takeaway. And it's like, I don't want to feel like I'm pressuring you to do something, but it feels like you're doing a great job of not moving forward with this. So please let me know what I'm doing wrong and how I can change it.

SPEAKER_01 46:57

Yeah, it's good luck. Uh, one provider we're working with right now is on track to hit about 8 million just in service this year. So they've got guys selling 300, 200, 80k months, like and all the way around down. And we're tracking all their metrics and building them a custom dashboard right now. So I'm really, really obsessed with looking at these numbers. What I've noticed is certain guys, different close rates, certain guys, more two-call closes, more estimates sold in another day as we track it, and other guys are less. And what it comes down to, honestly, is for that person, how comfortable are they sitting with the homeowner in that moment and having an open, honest, transparent conversation about things like money, about things like what you need, your objections, what you'd want to talk about with your partner, what would your partner say, and all the objection handles that Joe goes through, there's just very few people, Joe, that will stay at your level.

SPEAKER_04 47:55

I guess the way I view it is if you don't close this now by that second time, you're not gonna get a second chance back into the door. And if they're already in a place where they're giving you objections, I assume they're already saying no. But at the same time, if we're willing to say, if I already expect you to say no, then I have nothing to lose. There's nothing to lose by staying an extra two or three minutes into this. And a lot of times, those two or three minutes are the difference of, you know, actually, you're right. Can I think tell me more about the silver option?

SPEAKER_01 48:23

Thanks for the deep dive there on that, you guys. That that's always a fun one. I know we were touching on the service. I promised a little bit of a lesson. I'll save it for the end here. Uh, I want to get Kevin back in the mix because we've got his time and his time's valuable. I had a couple things with love for you, Kevin. On the first one, we asked, if you could go back and give yourself some advice, what would that advice be? Would you change anything? And I think now we're in a new place. So I want to ask that question again. Uh, for you or someone else in your shoes, what advice would you give uh going back in time a little ways here?

SPEAKER_05 48:55

To myself, I think I wouldn't. Um I think that everything has worked out the the best way it could have, and that uh some of the early mistakes were just learning experiences that if I hadn't done then, maybe I would have made them now and it would have been a bigger problem. So I think I'm good with where with where I'm at and how I've learned.

SPEAKER_04 49:20

I feel like that the best example of an expression of if it's meant to hit you, it cannot miss you. And if it's meant to miss you, it cannot hit you. And as a result, you're like, you know what? I did the things I was supposed to do, it ended up working fine. If I did something slightly different, I could have snowballed into another position. Yeah. That's pretty cool to think about and say, I'm on a path. This path was destined to happen. If I did anything else, it could have taken me somewhere else.

SPEAKER_05 49:43

One guy, if I if I kept him when he wanted to leave, maybe I wouldn't have found a different one who would have found me a different one and brought other opportunities in, and who knows? I might have still been it just a couple trucks out there and I thousand I thousand percent agree.

SPEAKER_04 49:57

Like, I remember letting go a guy that didn't want to let go because he was so essential. But when we did, three electricians stepped up. Yeah. Like you don't know what's gonna happen. You think this could be terrible for you, and it opens a huge opportunity. I just I love your commitment and faith. Like it's really inspiring for lack of better terms to have that level of confidence in what you're doing. And like, I'm just going forward and it's killing me or otherwise. We're gonna get it done. Good on you, man.

SPEAKER_01 50:22

Uh, Kevin, we do this thing now that's kind of like uh five fast questions. Uh love this. So basically, just try not to think too much about it, just try to answer the first thing that comes to mind. Okay. Couple of fun questions for you. Ready? All right. If Sperry Electrical were a service panel today, which breaker is working the hardest and why?

SPEAKER_05 50:44

I don't even know what that means.

SPEAKER_04 50:47

It's the one landed at the mains with no breaker. That's what it is.

SPEAKER_01 50:52

Don't even know what that means. What do you think is like the um hardest working, the most delicate point in the business right now?

SPEAKER_05 51:00

I guess it's gotta be um the the uh commercial estimating. I mean, we're pumping out uh a lot of it, and it's uh very difficult to verify how accurate it is. That's the thing that scares me the most, at least, is uh seriously underbidding something and being excited about getting it.

SPEAKER_01 51:22

You'll know soon enough. What's the one thing uh or a thing keeping that breaker from tripping? From just going, holy shit, screw this. Uh I'm I'm in hell.

SPEAKER_05 51:34

It's my like verification of of what what the estimator sends me before it goes out, and it's it's me holding that together to make sure you know I get something, and I'm like, these hours look low. Did you carry did you carry sight lighting? And then it's oh no, I didn't see that on the civils.

SPEAKER_01 51:54

Yeah, fair enough. What's one kind of shortcut or quick fix habit you've had to let go of in all this growth?

SPEAKER_05 52:02

It's it's gotta be something with uh with material procurement. I mean, I can't be getting everything last minute anymore, like I was. You know, I we have a job today. I'm like, all right, I'll order the material, get it delivered down there this morning. That does not work anymore. It's it's gotta be pre-planned and ordered. I at this point in the business, I feel like I have to babysit the suppliers more than the apprentices, because if one thing's missing on one job, I no longer have the time to say, okay, you know what, I'll just go pick it up and bring it to you.

SPEAKER_01 52:34

Really good. Really good. What's a number that you watch now that you maybe didn't pay attention to in the past? Uh account for receivable. That's a good answer. I like it. Uh finish this sentence. Uh, the next level of growth for an electrical company isn't blank, it's blank.

SPEAKER_05 52:53

Ooh. There is no quick uh quick answer to some of these. Um the next level isn't um well, you say for an electrical company. I don't know anything other than mine. Um I think that the next level isn't um the next bid or the next relationship. I think the next level really is finding a a headquarters that that can allow me to grow and um and have the capacity to to do more. Get more mental equity kind of thing. But I mean a physical location.

SPEAKER_04 53:30

With to gain you more free space so you can do better, is what you're from your saying.

SPEAKER_05 53:35

I I literally mean a physical location so that I can store more equipment and vehicles and okay and uh and material and offices to further expand our capabilities.

SPEAKER_01 53:49

Fair enough. Misunderstood. One last one for you, then uh a networking, um what's the word I'm looking for? Uh channel or activity that uh electrical business owners shouldn't sleep on.

SPEAKER_05 54:04

Um we're in three different B and I groups right now. I've got myself in one, my commercial project manager in another, and then John in a in a third group at this point. So we've got three groups of business owners working for us every week and and becoming part of our sales machine.

SPEAKER_01 54:22

Yeah, yeah, very cool, really good. Okay. Anything else that you wanted to say, Kevin? I'm gonna jump into just a little bit of a uh promised uh trick that you guys can do in your business. If you're listening to this or Kevin, you could even do it that'll really help you guys balance some of your pricing and project woes as well as your service. And this could really help a lot of people out. Anything else you wanted to throw in here on this one, Kevin? I think I'm all wrapped up. All right, man. So, guys, here's this little hack, and I love this for projects. I love it for a blended company. If your service can pay for the company, what we call the break-even, then that puts you in a much better place to position for projects much more profitably with much less risk. And I think that's really what we all want. We just want less risk and a uh healthier growing business. So here's a way you can do this: go to your QuickBooks Online. Uh, at this time, it's uh middle of September time of recording. So you should have nine months of history, eight, eight months of history. Grab each one of those, go into your chat GPT, put all your little PLs in there and say, Chat GPT, what is my break-even for my business this year? And what it's gonna do is tell you a specific sales number that you need. And at that number is where all your cost of goods sold are paid and where all your overhead is paid. So let's say it tells you, Kevin, your break-even is $112,345 a month on average this year. Use service and grow it to that level. Make service pay all your bills, all your overhead specifically. Now, every project that you bid, all the gross profit that comes from it should go directly to your bottom line. There's no more overhead to pay for. This is a massive hack that people don't understand and a fundamental counting lesson that's a little bit on the intermediate or expert level side, but thanks to a tool like GPT, you can get this insight from your Chat GPT right now. So please do take advantage of that hack, guys. Find your break even. Now you know projects over and above that have a much greater chance of success after you've paid for your labor, labor, materials, project management time. There's nothing left to pay for there. It's all profit. So hope that helps you guys. Kevin, you've been awesome on the show today, man. Thanks for taking time out of your busy fucking schedule to come back with us. Joe, anything else left uh for Kevin on your side?

SPEAKER_04 56:52

Honestly, I just want to express how proud of you I am. Like going from where you were to where you are now is beyond a slingshot pull. Like the amount of effort and faith and trust and ambition it took is really commendable, and you very rarely meet people with that level of level of caliber. So, if nothing else, I want to say I'm proud of you, and I'm very honored to know you. I'm very grateful I have the opportunity to do so.

SPEAKER_05 57:16

I got one one more thing that kind of ties into that. I met with this guy a couple weeks ago, and um he is uh he's been an electrical contractor for probably 40 years. And at one point he had 800 electricians working for him. And I said, What does it take? How did you get to that point? And his only answer was it takes balls.

SPEAKER_04 57:43

That's it. It's balls. Oh, thanks. I could definitely replicate that. Thumbs up, good advice, guys. I was like, I got that.

SPEAKER_01 57:54

Well, that's the mic truck moment. Let's end the episode there, guys. If you're interested in learning more about Kevin, uh, you can find him on Facebook.

unknown 58:02

Yeah.

SPEAKER_01 58:03

Kevin Spear. Reach out to him, ask him some questions. Kevin, we're gonna hook you up with Hans. I think that would be a great uh great connection for you. If you had any other questions too, sounds like you got a big dog in the in the neighborhood there anyway, with big bulls. So uh, guys, if you want more wits and more bronze, come back next week for another episode of the Million Dollar Electrician. We'll be here for it. I hope you will be here too. Thanks, Kevin. We'll talk to you guys soon.

SPEAKER_04 58:27

Take care, friends. Be blessed.