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Million Dollar Electrician - Sale to Scale For Home Service Pros
Rewiring Our Mission: (Electricpreneur Secrets)
Helping Electricians Achieve the $1M Service Van so they can experience ultimate control over their futures.
Join Clay Neumeyer & Joseph Lucanie for a new electrifying episode & High-amperage action item each week to spark up your service van sales to $50K, $70K, $100K, $150K months, and beyond!
Million Dollar Electrician - Sale to Scale For Home Service Pros
Ep 5 - Why You Need to Bill 300HR
Ever wondered why some electricians are making $300 to $500 an hour while others struggle to break even? This episode of the Million Dollar Electrician podcast promises to reveal the secrets behind premium pricing and how you can transform your electrical service business into a profit powerhouse. We’re not just talking about numbers; we share jaw-dropping success stories like a client raking in $290K in a single month with a 71% gross profit margin. That’s right—real-life examples that prove it’s entirely possible with the right pricing strategies!
We redefine what service work truly means and bust common misconceptions around profit and salary. From securing favorable payment terms to understanding the importance of believing in your worth, we cover it all. By leveraging car analogies and compelling anecdotes, we illustrate how perceived value and brand recognition allow some businesses to command higher prices effortlessly. Plus, learn essential lessons from the transition from employee to business owner. Get ready to elevate your pricing strategy and achieve greater profitability with insights from our Price Tool Academy. Don’t miss out on this opportunity to gain the confidence needed to charge what you’re truly worth!
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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 2:I'm Joseph Lucani and, together with my co-host, Clay Neumeier, we're here to share the secrets that have helped electricians sell over a million dollars from a single service van.
Speaker 1:Now it's time for sales, it's time for scale, it's time to become a million dollar electrician. Hey Joe, hey you guys, hello, hello, hello and welcome back to another episode of the Million Dollar Electrician. I don't need to say that anymore. There's an intro. Joe, how are you doing, brother?
Speaker 2:Man, I feel like we're doing good. I love when you and I get to connect in the background and really just talk about how we're leveling things up and moving things. It's a good day. It's been a good day man.
Speaker 1:Well, today we're connecting on a massive piece and it's why you need to be billing 300 plus an hour in your residential service business, and there's a reason why there's a bunch of reasons why we're gonna go through all that today. But first I wanna acknowledge what we were talking about behind the scenes here before we started this podcast. What did you say to me, man? What did you say about taking a swing?
Speaker 2:Yeah. So we were getting ready to go into this podcast and we're talking about all these different business developments we're making and I said, well, whatever it is I elms were making. And I said, well, whatever it is, I'm going to show up to the line ready to swing. And you're like, well, what is it you love about this? And then we're saying, well, I'd rather show up to the line ready to swing than be in the background talking about how we need to swing, because we could talk about it and likely come up with a better plan than if we just go out and do something. But it breeds inaction, compared to saying I'm going to do something, I'm going to see where the results lead up to and then, based on those results, I at least have something in my hand. It may not be pretty, but I'll have something that I can work with and that I'll level up to the next step.
Speaker 1:There you have it, folks. You've got a challenge already. Live up to Joe's standards here. Step up to the plate and take a swing. What are we waiting for? Don't sit around thinking about it. Here's the thing I want to contribute to that. Go for it. Nothing happens if nothing happens. It's like Jim Rohn used to say nothing changes if nothing changes.
Speaker 1:How many of us are being held back, especially on this topic of pricing right now, not doing the thing that we keep making excuses for, keep saying we're going to do it? Or maybe you're here to disagree with us today and go what the hell are these guys talking about? 300 plus an hour? I can't sell at that rate. Then you'd be like me, you'd be like Joe, you'd be like every other electrician who once held that belief and no longer does. And today we're going to explain to you exactly why this is the truth for you, how you can go and do that and also relate it to like a guy in our program that had a $290K month with just six field staff at a 71% gross profit margin. Joe, that doesn't happen by accident and it all starts with getting your pricing right. Yes, I said 71%. That's massive. It's massive, but too many of us are falling victim to the I don't know what's left. I don't know what my gross margin is. I'm just going by the money that hits the bank account. Joe, do you remember that?
Speaker 2:I remember that, but I'm going to say one even worse, which is when we say, well, how much do you take home? And they go well, the business account has this. It's like, well, yeah, but how much is the businesses and how much is yours? It's like, ah, it's all mine. It's like, no, no, it's not. And that's when you find the really dismal profit ranges.
Speaker 1:Totally. Yeah, we get that a lot. We talked to electricians and a lot of them are sole proprietors, still early starting. Can't blame you for that Humble beginnings, man. We all come from there but saying, oh, we were a 50% profit last year. And then I say, okay, what was your salary? Well, that was included in the profit. Say, okay, well, how much did you earn? Well, two, three, even five or 600,000, doesn't matter, because that equation isn't quite adding up. So step in with us today. Let's go over this pricing, how it can make a difference for you. In fact, why don't we jump into win of the week, joe? Do you remember what that one is this week?
Speaker 2:Yeah, no, I was going to say. One of our clients, Brandon, who I'm incredibly proud of, did an absolute challenge and just completely knocked out of the park so you know how some people describe their wins. Like they say I sold a big ticket item. But then when you ask them, like what was it? It was like, oh, it was a project. It was like, oh, is it service or no? Well, it was, it was the last, so we modified it for this, but they're giving us eight weeks of work.
Speaker 1:You know that kind of song oh yeah, making concessions to get the job, you start following someone else's process more than your own. That whole thing.
Speaker 2:Yeah, he didn't do that and that's the best part about it. The win in the week is that he closed $150,000 project, but it was at a hundred percent service rate. There wasn't no modification, there was no concession, there wasn't no white taping. It was this is my price to do it, this is the full price to have it done, and we either do it at this price or we don't. And the best thing was is it was an existing, a relationship, from what I understand, where it was like okay, well, you've already seen me do it at a lower rate, same project, but I'm not doing it at those rates anymore, doing it at this rate.
Speaker 1:Yeah, and as I understand, that was about 30 or 40% higher. So 150K job that otherwise maybe was 100, 110K, but now sold at this simple service rate, a full simple service rate, and they're meeting him where he's at. That's a superpower that once you take hold of that, it never feels the same again. You know what I mean, that confidence that builds up. But it also asks a question, Joe. It begs to answer. This question is like well, what is service really? Then We've got a guy who came in, used a simple service rate, locked in a bigger project at that simple service rate, at the full simple service rate again. So what is service really? Then? Like, when do you say no?
Speaker 2:So that's the interesting thing. Now all of us consider service for the most part being any kind of like residential type call. But you can technically simplify it even further and you can say all right, is someone willing to pay what you would charge for a service call? What is your service rate? And if someone's willing to say, yep, sign me up for that full rate, then I say that's service work. I don't care if it's a hundred hour project, if every one of those hundred hours was accounted for at full price and you gave them that number and they accepted it, that's service work and we should accept it.
Speaker 1:Yeah, yeah. I like that Along with other principles in the offer, like hey, can you get your deposit, can you get a 50% deposit to schedule it? Or at least at least schedule those draws in a way that benefits you before that work ever starts and that you know you're getting paid in full at the end of the work. None of the 30, 60, 90 day project nets that we've all suffered before, like throw all that away. If you're willing to give me $150,000 project, joe, you're going to pay me at my full rate to do it and give me money when I need the money. When I say I want the money, heck, not only will I do the work, I'll include solutions that include subcontractors under me and I'll become the general for that job and I'll run it and make all the money off it, instead of following someone else's thread, following their crappy process that's non-existent other than how to not pay people when they need to be paid.
Speaker 2:Yeah, I'll be whistling the happy tune the entire time. You want to pay me to have a smile on a whistle the entire time, walking with a hustle, full service rate. I guarantee you every one of your technicians are going to be smiling because you're not going to be breathing down their neck telling them how slow they're going, because you're not losing your ass on this job. You actually made a fair profit, which means you're treating your team in a better way and the customer gets a better result and everyone wins 100%.
Speaker 1:And while we're down this rabbit hole, this kind of begins to explain the first parts of why we need to charge 300 plus an hour on average. Now, to be honest, you're likely in the range. If you've got a couple of staff, your humble beginnings you're actually likely in the range of four to $500 an hour. 300 was us being nice in this intro and just saying, hey, we should at least start there. Here's why Most of us become electricians, humbly. Maybe we're a bit nerdy, like the rest, right, maybe a little bit perfectionist. You enjoy electron flow, you enjoy the theory and you enjoy helping people with a job that you consider kind of dangerous. It's cool to be an electrician in my books, joe. How about you?
Speaker 2:I mean, it's not uncool to be an electrician. I've never done any decision in my life with cool being a factor.
Speaker 1:Yeah, I've never actually had to relate on that, but yeah, I would say of all the trades electricians, being a pretty damn cool person- would tell you what I loved it from day one and I know lots of the listeners do too and I knew that, if nothing else, it was going to be a great plan b where I could have the opportunity to run my own business one day, and even if I didn't, I'd always find a job for someone else as a skilled trade and be able to show up at 10 for that person and be able to make six figures. I know that I had that opening that door of the hallway. Does that make sense?
Speaker 2:It really, really does. I can completely get where you're coming from there.
Speaker 1:But then, just like everyone else, you get your ticket and you start really being challenged, you start really being thrown in the fire. Oh, and now you're going to service calls independently. Now you run projects or go to opportunity calls independently. Now you're actually learning. And then this confidence comes about, you, and you realize, gosh, I could do this for myself and have more money and more time. Do you remember thinking that?
Speaker 2:You know, actually there was one situation where when I was side jobbing at like 16, 17 years old, I was charging a client $30 an hour and then something like eight years later went back to the same job as my own company and I was charging him over $300 an hour and he was complaining at $30 an hour. And he's complaining at $300 an hour, except this time I was getting paid. Same complaint, same complaint price. He was $30, but he was also bitching about $300. But the fact was is I was like at least now it's worth doing this job for this person.
Speaker 1:Yep, yep For sure. Well, back to the story is like for anyone bootstrapping an electrical business. This is how we learned this stuff. So you go into business for yourself. Who are the first customers? Always Friends and family, someone you know on the block right, and we go to them and what we want to cut deals. But also you look at the work and you realize, gosh, I've got no idea how to price this. So what do you do? You use either your old employer's pricing or you start coloring around shops and figuring out what they would price for it, and then you just use their price and maybe even you thought, hey, I'll do better than them to be competitive, I'll just do a little bit more for a little bit less.
Speaker 1:You remember that one little bit more for a little bit less, and then next time a little bit more for a little bit less, and next thing you know, there's more month at the end of the money, the money at the end of the month, and you're going. How the heck do people make it in this business?
Speaker 2:or even scarier, when they try to price themselves on someone else's pace, like I used to, where it's. Hey, I'm a new, inexperienced electrician. I wonder what the old guy that we used to work with. I wonder what he would have charged. He was a fast electrician. I wonder what the old guy that we used to work with. I wonder what he would have charged. He was a fast electrician. We should price based on how fast he was going, because the customer shouldn't have to pay for ours, and then you end up once again. Job was priced properly if I could do it in a quarter of the time, but it's not realistic.
Speaker 1:Yep for sure. So here's the thing Even if you borrowed pricing from a bigger local competitor no-transcript a lot of those rates are actually derived from. Someone did do the math at one point for them. But the mistake that they commonly make is, anytime it's construction or projects relative. They're dividing their total burdens and growth costs expenses by 2000 hours per man, and that is a full time year. Would you agree with that? 50 weeks, 40 hours, 2000 hours.
Speaker 1:The math checks out the math, maths, and so for most companies, that results in a range of around a hundred bucks an hour for a rate with enough guys there that they're dividing by. It really is a mistake in the math. In service, though, we don't do that. In fact, there's two wrongs there. One is, if we took that same rate, the only way you could ever make even close to enough is to then bill the customer time and material, including going to the warehouse for parts, cleaning the van at the end of the day, doing your garbage runs, all the stuff that customers don't want to pay for. They don't want to see that extra stuff, they just want what's relevant to the job in front of them.
Speaker 1:So there's a solution to that, and the solution is to not show them that stuff and to adopt a flat rate pricing system that includes all of the work that you're offering them and all of the off time that doesn't need to be in front of them, it doesn't need to be written, and it comes in the way of a 50% rule as a standard in service. So instead of assuming 2000 hours, we just assume 1000 hours, and if you're the average service company that pays yourself a salary that needs to have an office manager, csr that needs a little bit of help in the field. Then I'm betting that your expenses with marketing the website, the van, the shelves, everything that you need, your tools and again, your salary and your earnings. You're over $300,000, $350,000 a year. Would you agree with that, joe?
Speaker 2:That adds up because the crazy thing is that we don't realize all the office and admin support that we're going to need in order to scale at a certain level.
Speaker 2:I'm pretty sure if you and I were to go into a van and it was just us and we bootstrapped it, you could get by for a period of time. But the moment you start scaling and you recognize, oh I need these things, but you don't account for them, that's where your margins become so much smaller. So, yeah, the numbers do line up. If you have your support staff, you're going to need to pay for them.
Speaker 1:And we still didn't even account for things like insurance. Those prices aren't going down, they're going up Fuel costs. What about those prices? They're not going down, they're going up. Inflation is happening and most of us don't even account for that. There's many of people listening to this charge $110 four years ago and are still trying to charge it today and meeting the same price objections that you talked about, from $30 to $300 an hour difference. It's crazy.
Speaker 2:It's absolute insanity, but it happens too often, because have you ever heard of the concept of boiling a frog?
Speaker 1:No, man help me Okay.
Speaker 2:Okay. So there is a concept that, based on a frog's anatomy, if you were to put it on a pan and you slowly were to turn the pan up, they can't recognize the temperature differences, won't recognize that it's actually gotten hotter and they actually cook. But if you took the same frog and you put it on a searing pan, it would recognize the pain and immediately jump.
Speaker 2:The reason why I'm saying this is this If you were told four years ago that you need to charge $110 an hour and the pressure slowly went up over time, you may not recognize that you're actually being cooked alive. But the fact that if you can say I'm able to adjust and be more sensitive to the slow changes, you'll recognize and be able to make the proper adjustments. So don't be like the frog. Don't wait for the pressure to cook. You get ahead of it and turn off the flame nice touch, man.
Speaker 1:I love that full circle back. Taking that analogy, using that, for us, I mean, there's no better time than to step up to the plate and take action on this thing. I'm not even asking anyone who's listening to this to just arbitrarily start charging 300 plus an hour or four, or five, or even 600. Heck, we've got rates in our clientele that are over $600 an hour and that happens. And you might be thinking how is that ever reasonable? And when you do the math, it checks out based on the work you're providing, based on the demand that you're facing. I mean, still, it doesn't matter if you're at a thousand dollars an hour. If you're closing 80 plus and your demand is increasing, your only option is to increase your price, no matter how you want to argue that. If you want to serve at the highest level, that's just what you have to do and that's the basic principles of supply and demand.
Speaker 2:Go ahead, brother yeah, no, actually you touched on it last when you're saying about supply and demand, because because I like using car analogies when it comes into sales.
Speaker 2:If you think to yourself and say, all right, I want to buy a Honda or I want to buy a Kia, or you want to buy, there's decent cars, there's no issues with that. Right, you would go in expecting to say, all right, a brand new car may be anywhere between $40, 40 to $60,000. Right. But if you took that same car and you took it to a separate dealership, like the difference between what is the, the escalate for the Cadillac first getting a fully loaded SUV, right, really, the brand is what you're paying for. You're paying for the luxury, you're paying for the convenience.
Speaker 2:So someone to tell you that same car from Cadillac where to cost $30,000 more is meant with the. Well, yeah, it's a Cadillac, you expect this, this, this and this with it. Yeah, but I guarantee that same parts of material would be less. So the point I'm trying to get across with this is that you never know what someone's value is, but I guarantee there's something that you're seeing in your industry or related industry where you would be willing to pay more and say, well, yeah, it's a Rolls Royce, yeah, it's a Cadillac, of course it's a Mercedes.
Speaker 2:You have to make a certain expense. So that's really what I'm coming down to for that reference.
Speaker 1:A hundred percent, man, and I've got one. I'll meet you there halfway with the cars. Have you ever seen a Lamborghini commercial on television, radio or other? No, no, ever seen a Ferrari commercial? Nope. Bentley commercial? No one's. None of those multiple hundred of thousands of dollar cars have commercials.
Speaker 1:Ironically, some of the highest price ticketed stuff around sells itself, and the people that buy those things are awfully proud that they bought those things, and they tend to have their own referral network growing a network of just word of mouth happening that sells them. I've never seen anyone buy a Ferrari or Lamborghini and go park it in the garage and say, oh, check that bullet box out to the bucket list, stumbling on my words here. Ironically, though, in our program, the highest billable has the same thing happening for them the least marketing budget, and they're thriving. Why do you think that is mm-hmm and they're thriving. Why do you think that is, even though you know, I know the majority of listeners are going, but I can't fathom charging 300 an hour, let alone five or six hundred an hour. What's the difference between the person that does and is able to do it and have no problem with it and the person that's, you know, listening to this. There's no way, guys.
Speaker 2:So, really, the thing that I would say, like if you were to have one key difference between one and the other, it would be sometimes you have to put your faith in front of the horse, and what that means is that, like some, people need to see the evidence in order to believe, but seeing doesn't mean faith. Sometimes you have to believe that the thing is going to work and that you're worth what it is, and then, once you're confidently able to deliver at that. This is just the way things are now, like it's okay if you believe it, but the fact is that, if you do, your team will communicate it more authentically than anyone ever could. Who's just being paid to do so.
Speaker 1:I love that man, I love that, and guys, we want to help you with this. So I've got a couple ideas here. Joe, go for it. What do you say?
Speaker 1:We open up the Price Tool Academy value piece again and get some people in there.
Speaker 1:You're able to actually just reach out to us where you saw this recording first, on our website, at our contact form, on our, our Facebook group or even Instagram, if you see us there, if you reach out and say the magic words price tool, we'll literally send you a bit of a login for our academy and give you access to our pricing tool so that you can be priced accordingly and get help with handling the price objections early on, getting ahead of that to get your confidence up and put that faith in front of the horse so that you can act as if and go make your first deal happen.
Speaker 1:If you didn't notice from our win of the week, like Brandon, like he's up 40K because he put that faith in front and did the thing how much are you leaving on the table is the big question I have for you. That is exactly the question we answered today why you need to be priced at 300 plus an hour. Guys, if you have any questions, again join us on our Facebook group. Open up the dialogue with us there. We're happy to talk through it, joe, anything else you want to add today?
Speaker 2:No, just want to say, guys, the thing that you do today, if that thing is changing your price for the better, is one of the most impactful levers you're ever going to pull. So pull that lever, kronk, make it happen.
Speaker 1:Let's go See you next week, and that's a wrap for today's episode of the Million Dollar Electrician Podcast.
Speaker 2:We hope you're buzzing with new ideas that charge up to take your business to the next level, so don't forget to subscribe, leave a review and share the show with fellow electricians.
