Episode 30 - Measured & Managed - The Million $ Electrician Difference

@4:21 - Clay Neumeyer (serviceloopelectrical.com)

Welcome to Entrepreneur's Secrets, the Electricians podcast. I'm your host, Clay Newmeyer. This is my incredible co-host and sales coach, Joseph Lucany, also been called the sales bot many of times.

@4:38 - Joseph Lucanie (Fathom)

How you doing today, Joseph? I'm having a wonderful day being here, man. It's really one of the highlights of the day.

Awesome.

@4:43 - Clay Neumeyer (serviceloopelectrical.com)

And we've got an incredible show today. And it's going to solve a problem for you. It's going to solve a couple of problems, really.

You ever wondered what to do next in your business, how to get over this plateau, what to do, how to do it.

Really, that stuff is foundational too, building a business, a business that can grow in a business that will grow, so you can spend less time strategizing, more time and activity where results are born.

This is the million dollar difference. We're talking about measurement and management. It's boring as hell, and it would be no surprise if no one ever listened to this podcast ever because that's in the title.

Data, it sucks.

@5:27 - Joseph Lucanie (Fathom)

What do you think, Joseph? Data is both the Achilles heel and the linchpin and cornerstone of every good business because you think to yourself, if you were to view it like sports, what team, what professional team is playing without a scoreboard, right?

But if you ask any business, any small locally owned business, saying, hey, what's your current profit margin on the job that you ran last week?

And they say, we made money? Well, good. How much? To what percentage? What were your losses? What are your gains?

And it's just... Deere in the headlights. It's like, what, wait at the end of the year, we'll find out when we talk to the accountant.

Mm, not anymore.

@6:09 - Clay Neumeyer (serviceloopelectrical.com)

For sure. And since we're on that, let's just establish one of the biggest problems is resting and relying on your bank account balance to tell you if you're being successful in business or not.

@6:19 - Joseph Lucanie (Fathom)

Mm-hmm.

@6:20 - Clay Neumeyer (serviceloopelectrical.com)

The challenge with that, I'll call it out, right off the bat is your AR, your accounts receivable, and your accounts payable are in constant flux.

These things are always moving. Even if 99% of the time you're getting paid same day and taking deposits, as you should, right, to really be in a great position, in service, the electricians that we're serving, electrical contractors and home service business quite often have disadvantage.

So if you're listening to this and wondering with all your new construction or commercial work, you're wondering, hey, how do I balance that AR?

A little better, we'll bonus tip here, tie it into service work. Residential service. This is your scapegoat for that.

So as that accounts receivable climbs up and starts growing and your accounts payable grow and you've got different timings, why?

Because the supply house wants to be paid ASAP. They want their cash and you want yours, but it all happens at a different time.

So the bank account balance can tell us things, but one of the things that's not gonna tell us reliably is how well we're doing in business.

@7:27 - Joseph Lucanie (Fathom)

Yes. Yep, and the thought that I have in a toast association with that, I know this is a different topic, but this first thing that came to mind was then why aren't people taking more advantage of financing?

You know what I mean? Like why have it where your customer doesn't have to pay money and you don't have the front money, the bank's the one that pays you and they're the one who pays the bank.

Wouldn't it make it easier for everyone?

@7:51 - Clay Neumeyer (serviceloopelectrical.com)

Definitely, definitely. And James points out to hear live with us in the Facebook group to check out profit first by Michael McAlliwitts.

great books. We've referenced them several times and continue to.

@8:03 - Joseph Lucanie (Fathom)

So thank you for that, James. Got it right there.

@8:08 - Clay Neumeyer (serviceloopelectrical.com)

Exactly. So planning. So a big question becomes, okay, well, what do we need to measure? Why? What are these critical KPI key performance indicators?

And what drives this whole thing? Really? And it depends where we're looking, but quite simply put it this way.

We need to have a performance target. We know that without a goal, where are we going? And you're going nowhere pretty fast.

We're going to be right where we are, or even worse, being stuck here because we're focusing on the wrong things without goals without that orientation of, okay, we're got to go here without that little urgency behind it.

We end up spending a lot of time in other people's problems. In that urgent, important matrix for all the fire.

are happening, you're stuck in the mud, stuck in the weeds, all the different metaphors for it, but one thing's consistent amongst them, you're stuck.

@9:08 - Joseph Lucanie (Fathom)

Yeah, there was actually an expression that I heard that really lines up to that, which when you're talking about someone wanting to measure something and keep the KPIs accountable, it's imagine a company with that KPIs is like someone climbing a rope, but every time they go to reach for the next rung, they let go of the hand that's already holding it.

And all they do is they never actually leave the bottom. If you can't track where you're trying to go, and you're not able to say, I hit here, and now I'm trying to get here.

If you don't track this, it's like you trying to climb up with one hand and no legs. Definitely. How could you do it?

@9:39 - Clay Neumeyer (serviceloopelectrical.com)

You can't, you can't. I'm again, acknowledging that this is right there with the least sexy crap we could ever talk about.

I hate data, but another topic we're going to talk about really in one of the coming episodes, maybe it's tomorrow, is you're running two businesses today's end tomorrow's.

And you need this information. So what are some of the things that we all let down at the end of this hard work and day?

Say you're still in the position of wearing eight hats, right? Not only are you the owner, you're the HR guy.

You're doing the CSR work. You're doing the bookkeeping, right? If you got quick books online for the most part, you're doing the accounting even until the end of the year, right?

All these little fires are consuming you. So we just can't do anything effectively in that position, right? So today's business suffers from that end tomorrow's because the stuff that gets let down is at the end of the day, after you're done serving your customers, you're going to go back and invoice.

You're going to go do more quotes that you're, you're behind on, right? You're going to go follow the money and actually chase down accounts receivable that you're owed for work already done.

you going to record these metrics? Are you going to record the KPI? Like how many calls came in today?

From where? How many repeat clients? How many referrals? How many reviews did we get?

@11:15 - Joseph Lucanie (Fathom)

How many club memberships?

@11:16 - Clay Neumeyer (serviceloopelectrical.com)

How many club memberships? How many opportunity calls did we go out and put prices on? How many options did we offer?

Which offers were chosen? Which were undecided? How many demand calls we ran? What's the average time for demand calls?

@11:32 - Joseph Lucanie (Fathom)

Should I keep going? I mean, we literally could, but at a certain point, the message is if you don't run your business, it will run you and it will run you straight into the ground because business is unrelenting when it has no steering wheel.

A car with nothing but a gas pedal does nothing, but just drives straight and blows up.

@11:49 - Clay Neumeyer (serviceloopelectrical.com)

Bingo. Yeah, you nailed it. I want to tie that into another book we've talked about it a few times.

The obstacle is the way Ryan Holiday. I love this reference because he put a whole book together to describe the way Ryan Holiday.

describing how we as humans just naturally avoid the rock, the obstacle, the very thing that we need to chip away at, we'll come up with every other silver bullet, every other idea to fix or get around things without just working on the problem.

For most, that problem is a lack of data to make informed decisions.

@12:27 - Joseph Lucanie (Fathom)

Can I touch on that? Please go. So for some of you guys who are listening, then maybe you're like, well, I'm not running a business.

Maybe this isn't for you. Well, I wanna say it is, because now I'm gonna shift it and say, what if we talk about your home mortgage, right?

You're talking about everyone who owns a house and doesn't rent, this could also be something for you. The thought is, is that it may seem insurmountable, like if the payoff of a mortgage, it means 300, 400, $500, $500 on your mortgage, right?

The concern is, is that interest takes a lot away from it. So you may send $500, $600 every month.

But it never feels like it actually does any deaths. But if you contract the amount that's actually being applied and you also track against the principle, now you're able to say, okay, I'm not in this for the next forever.

I can see every year it's going down. I can see every year that my payments are being applied the right way.

Why don't we take this and apply it to our vans that we own, or the shops that we own, or the tool rentals that we have, or the suppliers that we work with?

Why are we not tracking those deaths and shipping with them just as aggressively as if they were our own homes?

@13:37 - Clay Neumeyer (serviceloopelectrical.com)

A valid question is super important. Don't listen to what we say, watch what we do. I mean, we literally track these numbers in our own business.

And guess what? It's not perfect.

@13:50 - Joseph Lucanie (Fathom)

It's never perfect. Neither are we.

@13:52 - Clay Neumeyer (serviceloopelectrical.com)

We don't remember a perfection. We're humans. We're putting out fires too. Our schedule changes too. The problems come up for us too.

It's the consistent activity that really pays off. And we know that consistent activity and the numbers to found and make informed decisions about the adjustments to that consistent activity to that process, right?

Will have an impact on results. It's the scientific method 101. There's only a few ways to fail it, really.

Yeah, I'll touch on it for sure. We'd never make the plan in the first place. We don't follow through with the experiment.

We have too many variables, meaning we changed a bunch of shit before letting the data tell us something. Or we never recorded the data in the first place.

Those are the four things that are a recipe for disaster.

@14:51 - Joseph Lucanie (Fathom)

Can I touch on why that happens?

@14:53 - Clay Neumeyer (serviceloopelectrical.com)

Why people don't actually take swings at those? Let's do it.

@14:57 - Joseph Lucanie (Fathom)

There's something known as the cibbean fatigue. A lot of people experience it, but not a lot of people have the name behind it.

So you listed all four things. And immediately my brain was like, oh, it sounds like a lot. The thing is, is that if you look at something as a whole, as one individual attempt, you're gonna get overwhelmed.

But in addition to it, we can break things down to small measurable goals into the KPIs that we're talking about on a daily basis.

So for everyone who said, that sounds like a lot. Okay, put it down on paper. And then say, right next to it, there are two ways that I'm gonna get this accomplished today.

I'm gonna do one little thing today. If you can do one little thing each day towards your goals, how much further will you be in a year?

Six months, a week, who knows where you're gonna be at. So the thought is, is that if you can avoid this decision fatigue, you'll actually be in a better place to execute on those things that Clay was just talking about.

@15:55 - Clay Neumeyer (serviceloopelectrical.com)

100%. Here's what I'm gonna do just because this is.. So unsexy. I know data entry is lame. It's not fun in the moment, but I can tell you at the end of weeks, months when it starts to add up and give us real decision power, especially at our power quarter meetings, which is something that your whole team should go to, that we'll help you with where you actually design a budget for the next quarter, where you actually look at, okay, well, what's sold the most?

What were our strengths? What were our weaknesses? And let's make a business 135 or a power quarter 135 plan.

We're going to take that and make a big objective, three supporting objectives, and then 15 weekly little tactical adjustments that you're going to make and be able to sign off every week.

That is a level of planning, accountability, and informed decision making that very few have in their business. But I'll tell you who does have it.

Right, since it's sexy to throw some names out, do you think Tommy Mello of A1 Garage ever goes? got to where he was and all the people I've heard talk about the hundreds of millions he's made without this.

@17:07 - Joseph Lucanie (Fathom)

Now, Tommy's a great dude. And at the end of the day, it's kind of those things where he got where he is by following a process and being successful at executing on a process on a daily basis, not letting the grind go in and saying, I'm going to intentionally put my decisions behind actions I know are going to have results.

@17:25 - Clay Neumeyer (serviceloopelectrical.com)

Exactly. Anyone who's developed any franchise model and had multiple shops understands this too. At the end of the day, I mean, have you ever seen the founder, Ray Crock, the McDonald's story?

@17:40 - Joseph Lucanie (Fathom)

I can't say that I have. I wanted to get a chance to watch him and never actually did.

@17:44 - Clay Neumeyer (serviceloopelectrical.com)

Incredible, guys. I'm going to throw that up and just say, it's incredible. And it's applicable right here. Very, very tied here, relatable, for sure.

Also the founder, sad story because he actually really kind of took it from the people who founded McDonald's. But their vision was very shallow, one location, and his vision was, wow, the whole world needs McDonald's.

So he actually took it and franchised the piss out of this thing and then claimed it as his own, which isn't really the story.

But if you haven't seen the founder, Ray Crock, incredible, incredible story. But let's learn from McDonald's for a moment.

We've talked about process. We've talked about following and what that's worth and the autonomy that it creates, but also the KPI that can be driven from a consistent process.

Have you ever found it interesting that McDonald's can employ any 13, 14, 15 year old in any country around the planet and put them in a position to succeed with autonomy?

@18:44 - Joseph Lucanie (Fathom)

Can you do that in your electrical business? Can or are we?

@18:49 - Clay Neumeyer (serviceloopelectrical.com)

Is that right? We're... Some people will just, you know, scoff at that and say, well, we're technical. This isn't McDonald's.

That's fair. But shouldn't you actually be able to take any electrician then with equal training, not experience, but equal training and have them be able to fit in a role in your business that is consistent, predictable and measurable?

Can you do that in your electrical company?

@19:19 - Joseph Lucanie (Fathom)

And if you can't, can you wonder why people aren't staying long term?

@19:24 - Clay Neumeyer (serviceloopelectrical.com)

So all this stuff adds up is what we're getting to, right? And we're going to talk more about that in the next episode on the Today and Tomorrow's Business, having the two businesses that you're running.

But suffice it to say here, guys, if you want to succeed, wouldn't it be nice to know what's next?

Wouldn't it be nice to know, oh, sales are down this month. So that's your first indication is just revenue.

That's the importance of that revenue number. It signals us. Oh, wow. Okay. Sales are down. Why?

@19:57 - Joseph Lucanie (Fathom)

So the default that we're

@20:00 - Clay Neumeyer (serviceloopelectrical.com)

What we hear then next is, well, calls are down. Okay, how many calls did you get last month? Well, we think we got about this much.

Well, how many did you get this month? Well, less. Start to see the problem, right? Tying back to this obstacle is the way with the find information we can apply what's called the law of separation.

Remove our emotions from it because you'll tell yourself lies too. That's the other crazy thing. Just a few weeks ago, I was like, Joseph, sales are down as a Wednesday.

I don't know why it's hump day. And all of a sudden, there's like a moment of panic. I go back to the numbers only to realize that sales aren't even down.

Everything's fine. It was a hard couple of days. Only the numbers can save you from those moments. That's KPI.

That's the value of it. So I'm hoping that what you guys take from this episode is that this data will actually not only save you time, save you money, but give you power as a business owner.

Empower you and all you have to do is set this stuff up and delegate it to the right people to track those things so that you just sit in the cockpit of this thing with your hands on the wheel.

Look at your dashboard and see if you need more gas more break turn signal. What do we need to do here.

@21:21 - Joseph Lucanie (Fathom)

Without KPIs we can't do much of anything because you're right at the end of the day they're almost like a trail of breadcrumbs that are going to lead you to the answer that you've already decided in the past.

Whether you recognized it or not the KPIs that you allow yourself to be held to dictates the business of tomorrow.

So if you don't allow yourself to have that level of accountability then it would only make sense that you've allowed yourself to go in that company direction right.

@21:49 - Clay Neumeyer (serviceloopelectrical.com)

I agree 100%. I've got an exciting action item for you guys today.

@21:55 - Joseph Lucanie (Fathom)

Amy.

@21:57 - Clay Neumeyer (serviceloopelectrical.com)

Amy. Amy. Amy. Amy. Amy. Amy. Amy. deleted. a revised version of our little KPI workbook. And it's exciting. And just for our listeners, I'm going to give that away to you.

If you're in our Facebook community, if you're engaging with us live right now, and even if you're catching the replay, you can go in and comment on this video.

KPI workbook is just typed in the chat. And we'll send you our copy along with our instructional video on how to make best use of it.

And it's got essentially a daily CSR tracker that they'd fill out. It takes five minutes. Literally, they've got five clicks a day.

And they're all drop downs that you just get to choose. And everything else adds up and gives you the superpower of having a steering wheel in your business.

The other daily is for your techs. Each tech in the field, install or sales, it's going to be able to fill this out daily with the one to five calls that they ran as well.

information on those calls. It's about 10 clicks. 10-12 clicks for them. Takes 5-10 minutes. Then it's done. And what that gives you as the business owner is a couple other sheets with all of the summarized data and you're going to know where your traffic came from.

How much traffic each day. Everything from the Good Neighbor Program, Club Membership Sold, as we said, total sales amounts.

Who sold the most? It gives you a leaderboard. What options were chosen? Which options were chosen most often from which tech?

Imagine knowing all this and then reflecting on that with your team. Training from a basis of information in your business instead of training and just leading blind every day.

Wouldn't that be a superpower, Joseph?

@23:55 - Joseph Lucanie (Fathom)

Yeah, it'd be an amazing thing to be able to say to yourself. You know what? do I know what I'm supposed to be doing?

But I know for a fact that someone else is supposed to be doing and for all the business owner out there, imagine being able to keep your tech accountable by saying, you either did what you were supposed to do and I have the numbers to prove it.

And congratulations, there's an attaboy. Or I know that you didn't do the things they're supposed to do. And now we can do corrections to get that team improved.

But without the numbers, you got nothing.

@24:25 - Clay Neumeyer (serviceloopelectrical.com)

Exactly. Huge, huge, huge. So guys, this has been another episode of Electronic Secrets. For those that hung through this one, I know data, ee.

But for those of you that hung through it, guys, that's the big action I'm today. If you want that thing, I did miss an all-star action, actually.

I'm trying to prematurely close. Did you have some?

@24:44 - Joseph Lucanie (Fathom)

I was thinking to pick up on that. Yeah, the thing is, I actually have an all-star action. And it's more of a mental thing for you guys to focus on.

Because we're actually tied in the other day about being afraid of certain choices. The reason why most people don't invest.

Yeah. best in a KPI tracking system is because they were afraid of what it's going to tell them. And it's easier to live in a life of ambiguity than it is to live in a life of clarity.

You and I had this conversation this morning and I wanna bring up this quote is that winners crave accountability, losers crave ambiguity.

Because when you know what you're trying to hit, you know who's ideally responsible for not getting you there. And more often than it's you, you're the reason why it's not getting there.

So for the all-star action, I want you to know that even though especially, in fact, especially if it makes you afraid, that is something that you should be pursuing.

I want you to invest in a KPI. I want you to track what you need to track, even if it makes your skin crawl.

That is even more reason to get it done.

@25:49 - Clay Neumeyer (serviceloopelectrical.com)

Absolutely. And just adding to that and leading into one of our other next episodes, present over perfect guys, you've heard that so many times, don't let fancy shit, don't let not having our workbook get in the way.

And when it gets started today, just start tracking these numbers. If you don't know what, listen again and write down the very things we said, because we probably said 80% of them already.

But if you can jump on the page, grab our KPI workbook and we'll be guided to it and tracking your numbers by tomorrow.

No sweat. All right. Finally, now I can exit the show. This has been another episode of Entrepreneur Secrets with the Electric podcast community.

We're here to help you master sales, simplify pricing and deliver consistent premium level service guys. I'm Clay Neumeier. This is Joseph Lucany and we cannot wait to see you again and help you some more on the next one.

@26:41 - Joseph Lucanie (Fathom)

Take care.