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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 28 - Service vs Projects: The Electrician’s Roadmap to Financial Freedom
The transition from project-based work to service-oriented roles offers electricians invaluable opportunities for growth and stability. Joseph and Clay share insights from their experiences, revealing the challenges faced in construction and how service can provide a more sustainable income model.
• Discussion on project chaos and financial strain
• Highlighting Isaiah's $80,000 success story in service
• Exploring the operational differences between projects and service
• The importance of managing client relationships for long-term success
• Insights on the structure of service-oriented businesses
• Encouragement for electricians to re-evaluate their work models
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. Hello, hello, hello and welcome back. You probably just heard that six times I used to say at the beginning of every episode. Many people in our classes have come to ask me why I don't say it when I don't when I enter a class. But hello, hello, hello, guys, and welcome back to another great week.
Speaker 1:We're starting with smiles today because there's some great wins to talk about. There's a great topic right here that we're going to get into. Just to not tease you for much longer, but to let you right into the hot seat, here is we're going to be going through. Hey, the guys that are mostly construction or having projects and service and some of those projects pains and why we keep seeing this trend of these project providers. And then coming to service and the pains that we're able to solve with service and how it looks more in a balanced company. Joe and I can't wait to dig into this. Man, I know you know some of these construction pains too. Are you excited for this one, or what, brother?
Speaker 2:I'm beyond pumped because I remember doing new construction and just hating every second of it. So the thought of going from one division and then doing to something far more profitable and sustainable, it's a jump that everyone should experience in their life.
Speaker 1:And within this episode not going to let you down we're going to actually tell you. One of the wins of the week is one of our guys and we're hoping he joins us on a podcast really soon to talk about this in full but a guy who humbly just had construction, just had projects, just had the accounts receivables adding up overdue payments, all sorts even lawyer problems coming out of that, but recently reported a massive win for himself and his humble little service start. So I'm very excited to bring that to you guys. But, joe, is it okay if I start with a story of one of the last big projects that I did? I'd be glad if you didn't, by all means full steam ahead sir.
Speaker 1:Here's the situation. I think this is going to open it up for us pretty well. In the beginning of 2019, I undertook a project as a subcontractor Many of you know, hey, I had a niche construction management company for a bit and we really enjoyed that and being the specialist. And for this particular project it was about a 10-month project worth several million dollars with a commercial industrial background to it, staff levels, 20 to 30 people during that 10 months, lots of material involved, et cetera. And what happened is early on, about two, three months in, we started to recognize we were missing key components in our proposal.
Speaker 1:Now, what makes this even more troubling with my ex-company, the former operation we had is we wouldn't estimate the work. See, what we would do is solve the pain of Murphyphy's law, which was ebb and flow in construction. Right, you have it or you don't. And when you don't, what does your, your management team, do? What your project managers do to get more work? They bid everything, proposals everywhere, and so what happens is you end up overcommitted because Uncle Murphy pipes in and he ends up giving you more than you can handle. You know what I mean. Murphy's law, right, always kicks you between the legs when you need it the least. And so these companies would then look for A the leadership to run these projects that they were just awarded, but then B scramble to get a team together to do those things. We were the first part of that solution. We wouldn't estimate it. We'd begin by actually mobilizing to the project and doing the planning around it and making it happen and trying to meet those budgets.
Speaker 1:Unfortunately, within two to three months we recognized that this one was pretty doomed. What makes it worse? Project people. You guys understand the change management problem. It's like you need to be a lawyer on site and with the bigger companies. If you've ever worked for a big prime contractor or big general maybe it's in high rises or other multifamily big stuff, right, big commercial work you can run into these situations where they bury you in documentation. They bury you in doc control, and what I mean by that is by the end of this project we had, I think, a dozen three-inch ring binders full of documentation for the project that we built and all the change management and communication, the correspondence between us to get it built.
Speaker 2:That sounds like an absolute nightmare. Like I wouldn't wish this on anyone. It's awful.
Speaker 1:But that was our specialty, that's what we got really, really good at. That's why, even today, a lot of those skills transfer over to our own business and service and how we like to really get everything right down to the last little tenth of a degree of whatever it is we're measuring, make sure that customers in in full satisfaction. But that said, the sinking ship feeling a third of the way into a project where you're utilizing half of that company's labor force to execute on that project, it doesn't take long for the team to realize the feeling that's in the room and there's conflict now between the prime contractor. Realize the feeling that's in the room and there's conflict now between the prime contractor and the subcontractor, the electricians. If you guys are listening to this and feeling these pains, do let us know. Throw a comment where you're hearing this or seeing this, whether you're on YouTube or even in our Facebook group, and let us know some of the pains you've dealt with.
Speaker 1:But for me it was the next half of a year. The next six months of my life were miserable. I mean, I remember going to my office, closing my door behind me in an Atco trailer and literally practicing breath holds just to take my mind off of the work outside, and when you're worked up, breath holds don't last very long. So you're we're talking like 90 seconds to 120, like two minutes of actual breaking free from this and worrying about breathing, not the project outside miserable, miserable stuff.
Speaker 1:And so this topic is always front of mind for me. It's always right there, it's always on my show. It's like the devil on one side versus the angel on the other. So if you guys have ever wondered why we take such a strong position for service, it's not even that it's all against projects. We see great success in projects, but we are so for service here, for electricians, by electriciansians in service, because of the balance that can bring, the profitability that can increase from service where you finally actually have control of your own schedule, where you finally actually have control of your own budget. These pains are all too real for too many of us, and the same is true for Isaiah, who's the win of the week, and I'm going to go ahead and spill that now unless you want to.
Speaker 2:Honestly, by all means, I'll just actually I'm going to take it. I'm going to take this one, all right. So I just want to say, like Isaiah, when you're listening to this man, we say this with the absolute pinnacle of love for you, because what you've accomplished is amazing, of love for you because what you've accomplished is amazing. You had the situation where for a lot of us in the early season of the year January, february, marches those can be like the doom spells for people in service, because you're like, if you don't have your leads down, if you don't have your marketing down, you could go slow. Not Isaiah. He had, if I'm correct, an $80,000 January.
Speaker 1:He did.
Speaker 2:He had an, if I'm correct, an $80,000 January. He did Like and that's nuts, because the cool thing is is that this is not a guy with, like, a whole team of everyone running around. This is someone who's able to produce that themselves and the cool part about it is that in other places people are terrified of that season and he came from that construction. So going from a construction background where you're squeezed and lawyer bills and you're negotiating for just getting paid, to then have a huge profitable month for a small company in the slowest season of the year, that's a night and day difference and I don't think people really have gotten the gravity of that yet. So this is awesome, I say it's been building up and I don't think people really have gotten the gravity of that yet.
Speaker 1:So, like this is awesome, I say it's been building up, and so this is a guy who consistently still has construction and a team on construction on the side who's managed to build out a service division on his own back. He literally stepped back from construction and do this on his own. I can't wait to bring Isaiah on the podcast and give you guys all the details and have him share it himself. That's one of the big wins. Another big win of the week for us Joe I'm going to step out of my sad story for a minute and get all high energy on you guys is yesterday Our team celebrated 100 electrician clients under us.
Speaker 1:Currently there's about 400 plus members in our academy. That means our average team size is about three to four. So it's not just the solos and it's not just the big ones, it's everyone in between and we're just so, so grateful to be on this mission and able to serve and able to share these great wins and these podcasts and all the value content that comes from this mission, you know it's about damn time someone focused on electricians, right?
Speaker 2:So I'm glad, if nothing else, we are filling that void because we love you guys From one Sparky to another.
Speaker 1:we will be there for you and I couldn't make this up for some podcasts. This is slow growth for us. We've been at this now two full years and we're just at the same time as crossing that 100 client threshold, crossing 100,000 podcast downloads here in the next seven days based on the trends we're seeing, and we can't thank you guys enough for caring enough to be with us and be the reason for us to continue to show up to this day, albeit not the five days a week we started with when we were really just young and hungry and into giving you guys everything we had. But even now, when we're busy and really focused on just rising the tide for electricians everywhere and just holding our commitment to be here with you every week to help you guys, but even in bigger ways than ever before. I mean I can't sing the praise high enough, joe.
Speaker 2:It's an honor doing this with you, brother. It truly is.
Speaker 1:So let's talk about the differences here just for a minute, because we actually did an org chart to demonstrate this and it was in one of our intro videos in our program in the academy. And what this org chart really shows is the difference between construction and service. And what I think a lot of electricians miss is just how many hats construction forces you to wear. Is it okay if I go into that for a minute?
Speaker 2:I would love that by all means, Because the way I've always viewed it from the outside in is that you're just a guy with a 10-gallon Doug D'Amino hat and that you're doing everything.
Speaker 1:Yeah, yeah, that's pretty much it. I think when companies try to split the two, this is what they tend to overlook. Construction projects require a construction manager at the top Now, you might not realize that's a position, but it is and construction managers tend to be the ones who are in charge of the relationships, in charge of seeing that new RFPs come in or new tenders come in, new requests for proposals, so that there's more work to estimate and they manage then the project managers and the project managers are a very important role because someone's got to be responsible for that estimation and then to communicate what was estimated with your crews who undertake the project and to try to maintain a budget and a schedule as well, as I mean not to mention what about material delays and all the infrastructural needs that come with projects making sure we're able to meet the needs of that project. So there's two hats already.
Speaker 1:Any project does need a lead. By the very nature of the thing, there's going to be more than one person working at least projects that are taking weeks to months, if, if not years. Someone's got to be the guy. Someone's got to be the guy. So there's a lead. And then there's the actual direct labor, full-time journeymen and apprentices. And if you're a state with a tight ratio like BC Canada is fairly tight really it's supposed to be two to one, right, max two to one apprentices to journeymen. So in your states if you see that, then on projects you tend to see some leniency around this where people will fudge that line. But ultimately to be in form proper infrastructure for projects, those are all hats that need to be worn, those are all buckets that need to be on heads.
Speaker 2:Mm-hmm.
Speaker 1:And so, with saying that, how many hats are you wearing currently If you're doing projects? Let me ask you that, from what we say there, if you agree, how many of those are just on your head? Are you the construction manager, the project manager and the lead Mm-hmm in service? It's a much different formation 100%. And just so I'm not monologuing entirely as you start out, like I say, you can still wear multiple hats, isn't that right, joe?
Speaker 2:Yeah, I mean, I remember when I first started off, I was the CSR, I was the office manager, the installer, the service tech, the salesperson, like all of it. It's just you with many, many, many, many hats, and your goal is just putting those hats on other people, but for a long time, until you get the organization and understand what you need to do. Next. You're holding a lot of weight on your shoulders.
Speaker 1:You better have a strong neck, otherwise something's going to snap Absolutely that's why we've we've gone on and said like the first hire really should be your administrative, being able to delegate those things that aren't electrical. Now, in this approach the question becomes for many people well like, why do service at all? So let's talk about the pains between the two. If we can for a minute, I would love to we opened up with my story and it's obvious what those pains were, but that was very specific to me in nature. Generally, what do project providers find um net 30, 60 or even 90 days for pay, even withdraws? How many of us are actually able to collect enough on those projects up front to cover the materials and labor for the rough-in Sounds?
Speaker 2:like you got to be fronting something at this point.
Speaker 1:And then what's the common relationship of even being paid, even when it's net 30, 60, 90 days? How many of us in projects are still owed money well beyond that overdue accounts? One trouble that project people tend to have is profitability. Now, in my experience in almost every trade, projects have been commoditized. Unless you're truly a specialist Like elevator mechanics I would consider a specialist. They tend to be able to take a project whenever they want. They'll book you out next year, they'll charge whatever the heck they want and you don't have a choice. But electricians aren't really the same, are they, unfortunately, we're everywhere and there's always a cheap option. As a result, we've become a commodity. So my experience of projects has been net profit sub 10 single digits some of us some of us not even profitable.
Speaker 1:many project project providers, joe, are relying on volume to be profitable. So the risk is high and sure you might do $3 million in the year, but at 5%.
Speaker 2:And you got to pay everyone on top of that and it's just. It seems like way too much of a risk for someone to want to like. If you were here, if I feel like I'm standing at the fork of a road and on one side there's projects and the other side it's service, it seems like one is like a dark, scary road with like curves and bends and trees and wolves howling in the background, and that one's just like a clear meadow but has no compass. You know that's a clearer path, but so few people know how to take it so they take the scary path because it's more familiar.
Speaker 1:And it's a volume thing though, too. You can be the Walmart. You can move a lot and just put people in position to do the technical work very easily without a great deal of training. Here's some of the positives for the project side. You don't really need to market yourself, you just need some key relationships and to continue to shake hands with people and create those deals and opportunities where they want to invite you to submit a price. That's very low threat and very easy to do. Whereas in service, marketing is a major thing, as with every other style of business on the planet, where we have to learn to develop and create new attraction to our services from a new audience at all times. So many people find comfort in that and, as a result, many projectized companies have very small marketing budgets. That's one, the sales training, the very thing that we niche in In a projectized company. They don't really have to focus on that. You don't have to focus so much on the customer experience. You just have to focus on quality control.
Speaker 2:From someone looking on the outside in. I've worked on Walmart and things like that and I remember being a fully uniform tech with my button-down shirt and my pressed pants and everything was nice. And on the other side of the store there was a guy on a scissor lift with a backwards hat, wearing the yellow vest on one arm, hanging down the other, wearing sweatpants and sandals, and it's like that's the competition and you're both hired on the same job and it just feels so weird when you're trying to do something different and that's who you're also bidding against.
Speaker 1:Absolutely, I would agree. We can clearly see, when we walk into the supply house, two different styles of electricians. Especially if you walk into the right time, you may, at your supply house, experience a service provider who's in a premium realm, meaning they maybe have a polo shirt or a button up shirt that's tucked in like we're wearing. Perhaps their hair is done or their head is shaved clean like we've done. Perhaps they're a little cleaner shaved than I am, but much like Joe or Bear. A very presentable electrician with laces tied, everything looking good. Pants pleated right, nice belt, maybe cargo pants. Belt match in the boots. Belt match in the boots.
Speaker 2:Belt match in the boots.
Speaker 1:Joe's got the whole recipe and if you guys want to hear that recipe by the way, we did an episode on that recipe for how to dress, to be tactical as a premium service provider. But then you've got the person you described, which is the bunny ears, the tongue sticking out of the boots, loose lace likely to trip, especially if there's ice outside the door. Maybe as they walked into the door to the supply house you saw them flick a butt hair in a mess hat off to the corner and they're just kind of following someone in or there to grab something, pick something up and head back to site. Very different style of electricians, Very different training, very different expectations, the customer service versus that volume, and there's no argument that with volume, projectized companies can't do well experiencing 5% to 10% profit.
Speaker 1:Those profits add up and you can darn well build a company around that and I've been a part of companies that have done that and successfully invested in the real estate around their shop and at this point, 30 years later, they own blocks of that town that I used to live in and work in and that's amazing, that's an incredible fortune to have that Mm-hmm. What we do here, though, it's just a little bit different, With gross profit margins expected 50 to 60, sometimes a little over in percentage, With collecting deposits to get on the schedule and entirely paying for your labor and materials with those deposits At 50% we can't even forget that, like you're talking about, oh, you got a deposit.
Speaker 2:No, I'm talking about a little bit, I'm talking half, otherwise you don't get on the calendar, and that's a real thing.
Speaker 1:With expected net profit margins of 20% to 30%. And we've experienced above that, where spending is controlled. For the electrician that appreciates a van with a beautiful wrap and a look and a feel of confidence walking up the driveway to someone's home, who appreciates the excitement of building rapport with a new person today and being able to serve that person in a way that they don't yet understand, to be able to present choices and have someone choose you and to be able to have someone choose you at a higher level, not compare you to the lowest bid. All of that adds up to this inescapable, inimaginable, this exciting feeling. And we've seen organizations like Isaiah's and others some of the biggest team we work with turn that 3% to 5% net profit into well over 10%, climbing to 15%, climbing towards 20% net profit, even with a blend model electrical company electrical company and that, joe, is.
Speaker 1:I guess the point I really wanted to get at today was guys in the projects. I know I feel your pain. I know Joe feels your pain. I know all of us have so much to share around that Maybe it's not goodbye to projects and for you maybe it is. We see all types here, but man, is that service sweet?
Speaker 2:You know, I can remember the day, the specific day, I decided I was never going to take a project again. Like I remember going into a home because it was actually like the business lived there, there's like where there was their office. I remember going to the top floor and the guy said well, I don't know why you need to meet me, usually just send me a bit. Or they send me the bit. I'm like well, this is how we do our business. We always ensure that we meet you in person. He's like well, that's weird, but all right, whatever, what do you got? We started going through our presentation. He's like wait a second, I just need to see your bottom number. That's all I want to do. I don't want anything different. And I looked at him. I was like okay, well, here's my number. He's like you're completely out of line for that. I'm like why I'm actually on a low prop. This was when I was like 165 an hour. And he's like you're completely out of line for that. He's like actually, most bids are like 30,000 less. I'm like what? And I walked out of it, shook his hand. I walked out of his office. I said never again. And I never bid another project.
Speaker 2:After that it was entirely service. So you guys all have a fork in the road moment to take. You can take the bill path and do both. That's totally fine.
Speaker 2:There are people who are successful with it and, like Clay's saying, you could go left as well and do strictly products and do really well for it. But as someone who's dipped into both paths and experienced the wins that come from service, I will personally always advise people to go on service because I've walked that path, seen how stable and supportive it can be and also seen the rewards that come at the end of that path and after seeing those things I feel like it's almost a disservice not to guide people towards it and that's why we do what we do. To such an extent we want to be the hand into the hole trying to pull you out and if you need that hand, throw one message us, throw a comment in there. I've got your hand, man, just take it and we'll help you out. Is it wrong of us to want to do that, to pour our hearts out here, to say we want you out of this trouble?
Speaker 1:Is it wrong of us to want to do that, to pour our hearts out here to say we want you out of this trouble? Not at all, joe. Not at all. No-transcript or anywhere else. You see us like Instagram, clayneumeier, or leave a comment where you saw us on YouTube. Even guys, we'd love to hear your exceptional stories and if you feel you're you're doing exceptional at service and would like to be a part of the show, likewise, same thing, reach out to us, let us know. We'd love to have you on, just like the many members we've had before and the many outside non-members who are just great contributors to this movement for electricians, by electricians. And we'll see you next week for another great, valuable episode. Cheers. Can't wait to see you then.
Speaker 2:May all be blessed.
Speaker 1: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 charged up to take your business to the next level.
Speaker 1:So don't forget to subscribe, leave a review and share the show with fellow electricians. Together, we'll keep the current flowing.
