Ep 280 - Replay - Million $$$ Start-up Series 2024 - Biz Structuring

Hello, hello, hello, and welcome back to yet another episode of Electricpreneur Secrets. This is episode 233. How would we? How we would start a new electrical biz in 2024 with a focus on biz structure. And, of course, joseph, I know you're chomping at the bit to get some logo design in here today too, or not? Logo uniform design. I am your host, clay Neumeyer, with me, as always, my esteemed co-host, joseph Lucani, and we are the Electricpreneurs, a couple of master electricians with business addictions. Welcome to your freemium daily coach call. We're here to help you master your sales, simplify pricing and deliver premium level service. So sit back, take everything we give and just promise to take action as we go through this fire series, to help you launch the new launch series. Joe, how you doing today.

Man, I'm feeling awesome. The momentum has definitely been carrying. I've been still keeping up on the 75 E hard and I'm finding that, no matter how badly my girl sleep at night when 445 comes off and I'm getting really shocked awake. I'm actually grateful for it and I feel like it sets the day on the right intention. So I'm here to serve, ready to rock and roll.

Shocked awake? Yes, for anyone that doesn't understand what you're talking about, please help us understand. Why would you want to be shocked awake?

So I'm a for a plethora of reasons. I'm a terrible sleeper and once I am asleep it's very hard getting up. And I've realized that the best way the day starts is if I can be up before the girls get up. I get my prayer and my gratitude in, I get my workout in, I get my meditations done all they get squashed before the day starts and sun comes up. But how do you get someone who doesn't wake up to wake up super early? So I invested in a brand watch called the Pavlok watch, which beeps and vibrates. But for people like me, you can literally dial it up to get a few couple amps and jolt in you and it'll literally shock you to wake you up. And the way it works is that your body naturally starts to wake up, like Pavlok's dog. So naturally, every 445, whether I'm wearing the watch or not, I'm awake. I'm like oh, did it shock me yet? Nope, I'm literally trained. The bell rings, I start salivating.

All right.

What about you?

I'm talking about you still have time to do this podcast. Yes, we do yes, what a wonderful, wonderful feature, a benefit of that watch. If you put that in the ads and you'll get more podcasts done. If you get shocked to wake up every day, it works. What about you, man? How do you like waking up? Oh man, I like waking up. Honestly we were just talking about this the other day my favorite I mean not you and I, but me and my partner Mario, my favorite way to wake up is actually, as you just described, about 10 minutes prior to the alarm going off, feeling rested, waking up, a little quick stretch and ready to go to the gym, just like that, ahead of schedule. There's just something about naturally waking up that is so refreshing, feels good. Oh my God.

Yeah, if you can pull that off. I mean by all means, that is the preferred way, like, oh, naturally waking up, feeling rested, thumbs up, yeah, but for the rest of us wake up.

Yeah, it's starting to look kind of feel like a shampoo commercial here. Sun shining, just a perfect morning.

Birds are chirping, hair flowing of course you can tell when we'll be in the wind, yeah nevermind, we're getting off topic Sorry.

I'll work for you does it? It's not as appealing. Yesterday we had a great flow, great conversation and how this niche led us into our logo and design and branding. You mentioned some great, great nuggets on the van and how to begin to well referencing, kick charge Dan and Teneli, beginning to understand that rap, the culture that you're establishing and of course, I know you're chomping at the bit to get into uniform. And I don't want to lead anyone astray here. This has a full intent on this episode of talking about business structure as well, which is sort of there's parallels to this and that's difficult to address on a podcast. We're going to do our best through this series, though, so I'll be the boring business structure guy If you want to go into absolutely talking about the uniform, and if you were really ahead and you had the name figured out and that logo designed, I mean you very well could be ordering your shirts and all your stuff at the same time.

I mean, you could technically do it even easier.

Yeah, it's all about this uniform requirement. What you think is so important there?

Sure, and the thing I wanted to put into it is that you can actually have a uniform before you have your brand, but that's the crazy part about all of this is that we, as an industry, have been so inundated with the white van musterio and having, like everyone, just go and wear the same jeans and dirty sweatshirt and old boots and hope that it's supposed to establish this premium personality, which it doesn't, does the opposite effect. So, whether you have your brand or not, you can still plan to show up looking like a 10 level factor that go into it. Now, before we even get into that, though, why am I so focused on uniform? Why am I chomping, why am I stimming in the background? Because have you ever heard the concept of look good, feel good?

Absolutely, and that confidence. Again coming back to the name in the brand we were talking about, right.

Exactly so. I found that when I looked good or felt that I looked good, it also increased confidence. And the thing about confidence is that it is actually a tangible thing your customer receives from you. If you show up looking and acting and feeling confident, it'll be picked up in your tone, in your body language, in your proposals, in the physical work that you do. And, as an electrician, people want to hire those that are confident. We're working in their homes main electrical systems and working on dangerous stuff. They want to know that you're the guy that can show up for it. So just the fact that improves confidence alone would be a strong reason. But back to what I was saying about the white van theory is that all these contractors that we've experienced working with and different people we haven't worked with, we realize that they all kind of look the same. They all start out looking in the contractor uniform your sweatshirts, your jeans, your t-shirts, your old boots, mismatching belts, things like that. Yeah, but if you were going to take all those individuals and line them up like take every competitor you have every electrician in your market you lined them up in a single file line, could a client glance, glance and within one second, pick you out. If they can't do that, they're not going to remember you enough to stick in their mind. It's just like real estate agents If they make a sale to you once, they may never hear from you again because they don't remember the person. Yeah, so uniform, literally, is putting your stake into the ground and saying I am different. You can tell it just by looking at me, and what you're seeing is what you're going to receive A confident, professional, authentic individual who's skilled at what he does, absolutely.

I love that and I want to let people know electric winners listening to this now, live or other. Maybe it's the replay on your favorite podcast channel, but the competition for premium service electricians is not that high. The bar has really not been set in most places. Now if you're one of these people in a bigger metropolitan area, you might have a few competitors that are actually fully uniformed. Maybe you're nearby a Mr Sparky but also know that those companies are also getting a bad reputation a lot of times for coming off too salesy, and that's something we've got to explore throughout this series, even and just on this episode. It's not enough. So I agree with you 100%, joe, and I think just showing up feeling good, looking good, feeling good, smelling good, as we've addressed in the past, and presenting as a professional is so, so, so important, especially for a new provider. There is people are going to know you're a new provider because we're going to get into prospecting and your first clients, although that really could be starting right away. Here Again, we're limited to the confines of an episode and we've got a couple of priorities on this one, but prospecting is coming very soon and after we get established and ready for this financial exchange as an actual business. You're ready to prospect and start doing work and taking cash, and that was the context we were trying to provide right, quickest to sustainable cash. That's super important with the business structuring secrets. We've got a few different organizations Now. Keep in mind I am the pleasant peasant north of the border, canadian right, so my experience will have to be offset by yours here a bit, joe, but we do have experience starting an American corporation together as well. So I'm going to draw on everything that I see and discuss with electricians every day and you help me out where you can, brother.

I'd be happy to. We'll make it happen.

A few general establishments that you've got to decide of how to create your entity. Now, on the last podcast, you actually created or discussed creating a DBA, really working through your own name to start, and that's much like an LLC, then a sole proprietorship business, which means you're the business and the business is you, and a lot of times that form of business is characterized by a few advantages very quick to form. You'd have to tell me timelines. If you knew in BC, here in Canada, I could probably create a sole proprietorship and about 36 hours flat, with a name registry and everything out the door and ready to work this week. Do you have sort of a timeline in mind for sole proprietors?

in America? Yeah, it might be state. I remember that one of the hardest things was doing all the notarizations for it, because when order to get different aspects unlocked, you had to get each one authorized, so it wasn't like you can go online and get everything done all in one. Now granted that we're talking 2011, 2013,. So it's possible it has changed since then, but I can tell you from my own first-hand experience that doing it in 36 hours would have been awesome, because I remember sitting in multiple banks waiting for notaries.

And regardless, the advantage will still be there. And here's why, if it's again that sole proprietorship, it's tagging on to a person that the IRS already recognizes as an American citizen, assuming you're in the States. If you're a Canadian, then it's the CRA. They already recognize you as a person and they're just attaching a company to your name. Simplified, right, yeah, the. So the advantage is that timeliness, how quick that is. The disadvantages, however, is you're going to meet tax implications. That will put you at a disadvantage in time down the road. Now what you should know is that you can start that way and actually migrate it over later to something like an S-Corp or a C-Corp or a partnership. Few different structures here will try our best to just remove complexity, keep it simple and help you out. So why don't we deal with the biggest elephant in the room, a partnership, okay, partnership. Many people say the fastest sinking ship is a partnership yet here we are partners in service loop, electrical partners in electricpreneur secrets, the electricians podcast, which we're all here for. What would you say is the secret to our success as partners to date? Joseph?

I would say there's two major things that go into it. One is mutual respect for the others' ability and self-awareness of where we lack Like. I recognize very, very well that I have a very strong brain and experience level when it comes to sales, organization, business structure, residential calls. I'm very hard to be matched in that category, but where you compliment me best is you're a business strategist genius. I have seen things that come out of your brain that literally make me spin sometimes. But it's also recognizing which lane you stand Like. As an example, you wouldn't be teaching sales for me to do spreadsheets and at the other side of the coin I wouldn't say, hey, let me manage the organization of things in lieu of what I'm best at. And because we recognize those abilities, we're able to step away from it and really just stay in our lane and grow really well. The second thing was that there's a very strong level of mutual respect. I truly, genuinely respect who you are as a person and whether things, whatever it means. But whatever happens in the future, I know for a fact that you are someone that I am so grateful to have met and that I want nothing but the best for. So if you have those where we respect each other. We acknowledge our own weaknesses, but then we also respect the person behind the uniform. It can create not only a great friendship but a very cohesive work environment.

A thank you for the compliments. B of course there's a ton of mutual respect there. C in the interest of time, we're not going to be able to cover everything, guys. This is just a quick cover to get you started on some help to get going. I would add a third there in its shared vision. I think an agreed upon direction for this company is so important. But also you should have someone as an executor in the case of a disagreement where you don't agree, Someone does need the additional authority always to make that decision and it should be something that's discussed ahead of time. I only go into that, guys, because I know in many cases electric printers do have a friend they trained with for years and years. We've got many clients that bring their significant other business other to these trainings with them and into our classes, and we support them both just the same right. It's helpful, as Joe said, to know your lanes and know what your strengths are and compliment each other in that vision. That said, on the business structuring side, there's added levels of complexity to developing a partnership business because you've got to have a lot of this stuff sorted out, like the shares who owns what portion right? Who's the managing, who's going to be the secretary All these extra things you have to figure out. Now, granted, two things we're going to continue to say through this series You're going to need an accountant and you're going to need a business lawyer. I am not the resource, nor is Joe, to take all of your legal or accounting advice from. We're simply giving you the guidance to hit the ground running quickest to cash sustainably. That said, in time you'll likely be, for most companies encouraged by your tax accountant to become an S corp. Many accountants would say you don't need to start there, but the tax advantages will be plentiful at some point to save you a ton. Here's one thing I want to fit into this episode If you decide quickest to cash sustainably just means the LLC route, I'm going to be a sole proprietor and just hit the ground running. I wouldn't blame you for that. That's a great, as we say, MVP, which is something we talked about us doing with even the podcast. An MVP is just your minimum viable product. I'm going to slow it down and let that sink in the things we're doing. We want to try to keep simple and effective as possible, to produce capital as soon as possible, and a realization that we're on the cent trail here Does that make sense.

It really does so, for additional perspective for someone that may not follow it. It's a thought process saying I'm going to do a task with this task in intention. To say as simply as possible, this will lead me to cash. If I do this thing in its simplest form, it has a positive result.

Well done, well said. Here's what I want to add. Then, if you're an electricpreneur deciding to go with a sole proprietor, llc route, then what I want you to do in your bookkeeping is keep track of and we're going to talk about this again when we get into pricing here very soon I want you to project your personal needs for income, know what those are and keep track of them like you're paying yourself a salary. This is really important later for your business structure as you get into an escort, let's say structure Then you're going to become the owner of a business, the major Shareholder of a business. That is a separate entity and that's why it takes longer to set up.

Mm-hmm.

By doing that, you'll be setting yourself self up for success financially, but also your business for success financially and being able to better differentiate profit from person and that's an important differentiation to make decisions at the end of the year. Joe, this was a hard episode to do. Simple it's. Yeah, I was gonna say. If you're someone listening to this now and you're wondering about the C corp, what I can say is C corps do have some advantages, but they tend to be bigger Operations like large businesses. Right, keep in mind 99% of businesses are small business. I Would strongly advise staying away from that at this point. For your average electricpreneur who's looking to build, you know, the three to five, maybe even ten man shop at some point. I personally believe that that escort provides enough benefits and the again the LLC, the sole proprietorship, will get you far enough down the road to be able to reinvest in that as needed, based on their conversation with your tax accountant, which, just to repeat and be the dead horse here, we encourage, if not quarterly, semi-annually.

Mm-hmm.

It's great to have a great relationship, joe, did I miss anything? Man, I feel out of breath on this one.

No, it's okay, and actually I can pick up where you left off, because that's exactly how we started off it in my own company, where it was the thought of okay, well, I'm doing a D, I'm doing a DBA, and then once we've done the DBA, then we eventually transitioned to LLC and then eventually we're able to go into the escort route. But the benefit was is that I was able to just start, and it's the starting that's more important than the finished foundation, because as you can go and literally put one brick on the wall Every day and build something and you'd be more profitable than someone who's like I spent the past two years Building this wall and it's great. Oh wait, doesn't meet my clients needs, because I haven't actually talked to any clients yet absolutely the.

The investment to create the LLC is going to be much less than the escort. And if I could ask you, as an example, how much would your first sale have been either way?

My first sale. I'm not quite sure I follow.

Just trying to say, like, either way you were just starting a business, whether it was a DBA.

Or an escort.

That first sale would have been the same. The difference would have been your investment of time and Money into creating that structure, right. So yeah, I agree with that and again, our quickest path to cash Sustainably, guys. That's why we've taken this stance. I hope you understand. I hope that helps you make the right decision in your business as we endeavor down this new launch series for 2024. This is challenging us in some new ways to think back and through it, and I'm absolutely enjoying it, joe.

Yeah, I agree with you, man. You know, if nothing else it's. I want electricians to understand and to just be aware that we want to be in your corner. And this is us saying we're willing to push ourselves in uncomfortable ways so that you can understand that we'll do it with you. We're willing to get uncomfortable so that you can see the growth I love that man?

Do we have a couple action items to throw out here directly relative to making steps towards this progress? Yeah, 100%.

All right. So starting off with a basic action right, it's actually gonna come with the quote, which was, as we like to say, you don't have to be great to start, but you have to start to be great. That means that even in the deliberation of what do I want to do, your first step, you can do a DBA in no time at all, like, literally, when you get your license, there's a form, there's literally a part of the license to fill out saying is this a DBA? So just by getting the license alone, you could have made that step. You could use your first name, you could just go by Acme Electric. It doesn't matter what the name's going to be.

You can make a sale, but just get that started.

Once that started, you're able to start rolling. So basic action is just start, pick a lane and run.

Love it man.

Mind if I take the all start, or do you want to take?

it yeah, no, go ahead man.

Okay, the all start actually takes us a little bit further. Is I would rather you look at the end result, not by where do I want to be, but who am I trying to serve. Once you realize who you're trying to serve, it'll actually establish what size organization you need to be in order to serve that demographic. Once you've realized what size organization you want to be, you can determine what format is the most effective for you. If you're realizing that your format's going to be, I just want me and two technicians underneath me and I'll see if it'll be just fine. If your goal is to serve the entire East Coast and you want to establish a multi-state empire, well then you're going to want to go for a larger organization and it makes sense to start building the routes, establishing your lawyers and eventually investing into the C-Court. So look at the end result who are you trying to serve? Follow that path backwards and you'll land on where you're supposed to be.

Love it. Of course, for deeper details on that, consult your accountant, consult your lawyer, but even consult Google. There is actually great images to help you with the differences between the three. But there you have it. That is how we would just get started, because the most important thing here is your momentum and the energy and the time and the investment you're making. And getting that first sale is oh, so sweet, and we just can't wait to get you to it. This has been another episode, episode 233, of how we would start a new electrical biz in 2024 with this biz structure, the look good, feel good, fundamentals. Man, we've got this thing chuchin All on our mission to help you master your sales, simplify pricing and deliver premium-level electrical service. And we're going to continue again tomorrow for Friday and another episode in this series. Thank you so much, joe. Can't wait to see you soon, brother.