A Conversation with James

Last night I had the pleasure to speak with one of our CS2 members in Texas. His name also is James. It was a good hour of conversation that spoke of the challenges and issues that we face as contractors. Tips and insights were shared.

James is a smart guy. James also asked me to write about something that he believes is key to running a successful business. I too believe it as well. I’ve written about the subject over a year ago. That said it’s always good to be reminded of sound principles, and there are more people reading these daily emails since I last written about a year ago.

The subject at hand is building sovereignty in your business by adopting a simple rule. The simple rule is this: not all customers are the right customers.

Many potential customers are practically holding up signs why you should not be doing business with them. Big red flags are being hoisted up in front of your very eyes. However, many contractors are so desperate for work that they ignore the telltale signs and end up regretting doing business.

We all know the signs, and I could write a book about it. Signs could be something as simple as:

  • I have a lot of work if you give me a good price on this one I’ll give you all my work. 
  • When you need it done? Yesterday!
  • Customers that say they are going to do business with you, and don’t show up.
  • Another contractor showing up to while you’re there.
  • Customers telling you how much you should be charging.
  • Customers trying to beat you down on price.
  • Customers telling you when they’re going to pay.

If you want to survive in this business and more importantly if you want to be successful in this business, you have to be strong. You are the leader of your business. You dictate how your business is going to be run, not your customer.

James has learned from 25 years of experience. Experience is a great teacher. That said learning from those that have already been down this road before you is also a great teacher. Learn how to leverage from the mistakes of others.

As an expert in your trade, you have to believe that you are the best and your customers need to know that it is a privilege to do business with you.

I believe this with all my heart in my businesses and just one more reason why you must apply to become a member. It's also making sure that we are getting the best group of contractors to learn and leverage from. 

What do you need to know about your customers? You can afford to get rid of some.

Have you ever heard the old lie “that customers are always right or that the customer is never wrong?”

Yes you heard me right, I said lie. It may be a hard pill to swallow for a lot of contractors especially if they are experiencing tough times. It may sound counter-intuitive as well.

But the bottom line is, if you fail to apply the Paretto Principle (the 80/20 rule) to your customers, you're not running your business intelligently.

What is the Pareto Principle? 
Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population.
More generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:

•    20% of the input creates 80% of the result
•    20% of the workers produce 80% of the result
•    20% of the customers create 80% of the revenue
•    And on and on…

So as near as it can be, 80% of your revenue will come from 20% of your customers. And, my friend, if you're treating that 20% in exactly the same way as you treat the 80%...you're making a very big mistake.

It's a complete myth that all customers are created equally. They're not, we were taught that they are. We have had this drilled into our heads, and it has become a part of our beliefs. 

Now is the time to get comfortable in saying goodbye to those customers who are sucking the life out of you and your business.

Think about the customers that are hard to work with. The ones that don’t pay their bills on time, complainers, the ones that want you drop everything you are doing to take care of them right now. The ones that want you to whore yourself out for low wages and so on so on.

Sack these customers! Once you sack them, it will be a liberating experience and exceptionally good business practice. Very few business owners run their business this way and the implications of their actions are proven time and time again. 

Do not be like the masses and don’t follow the heard. The majority of business owners do not know about the Pareto Principle and if they do, they lack the courage to implement it into their business. 

When I first became aware of the 80/20 rule, I was not comfortable with it either. I had the deep-rooted belief that all customers were right, and It was my job to serve everybody. Do you know what my business coach said? “As long as you are happy playing it small and getting mediocre results, keep that philosophy!!!”

I didn’t like hearing it at first but in time I implemented the 80/20 rule and the rewards have been great.

Ask yourself these three powerful questions below because your profits will depend on it.
1. When was the last time you did a thorough analysis of your customers in terms of how profitable they are?
2. Who, in your customer base, warrants the value and resources you offer...and who doesn't?
3. Which customers do you need to sack?

To your success ~ James Brush.

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What your fellow electricians say about ES2.

After many years of pricing the old fashioned way and not making any real money to speak of, I started searching for a better and more modern way to do business without paper invoices and having to spend family time to work up the estimates and not sending them by snail mail. Now when I arrive I already have my customers data in the customer list , I just pull up the work to be done by touching it on the iPad click on their name and have them sign the estimate on the iPad screen with the set pricing already there and your done !! The its emailed on the spot. My income jumped into the black very quickly and I've never looked back with regret for joining ES2.

Aubrey Teele
John's Electric Service
Hoover, Alabama

I have been using the system for nearly four years now. To call this anything less than essential would be doing a disservice to what it has done for me. The amount of time it saves me from office paperwork is priceless. I no longer need to come home after a long day and type up handwritten notes into spreadsheet and mail out an invoice or quote. Everything is done onsite. My customers receive quotes nearly instantaneously, and I'm no longer trying to estimate on the fly. The team at ES2 is very attentive and constantly striving to help advance my business as a whole. I'm glad I can count of them being in my corner when I need them.

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Parkside Electric
Elburn, Illinois

New member here. I went into business in 89 and have been flat rating for about 15 years. I was trying to find one program to get rid of 6 that I was using.I found it! There is so much great information in the forum, and the contributions by everyone is nothing like I've ever seen. Tight group in here. The forums are worth the monthly fee alone.

Steve
Electrical Solutions

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Seth Sillbaugh
Switched Electric
San Francisco, California

I am part owner of an electrical service company in the San Francisco bay area and we have been serving our clients since 1999. We started using the ES2 system in 2011 and have been very happy with the program and with the support staff. In the past we used paper and pen to give the customer a number that we thought would be profitable for us. And sometimes we would get the job and sometimes we would not. Ever since we signed up with ES2 we have closed more business, gained more clients, clients love to see that we give them an ``up front honest price”, they love the professional look (using a portable device iPad or Samsung pad) and most important we make a good ethical profit.

You owe it to yourself and to your family to at least try the system for 6 months. You have nothing to lose except the profit that is rightfully yours if you don’t sign up.

Edward
Edward's Electrical

Since my start with Electrical Success Systems, job closure has tripled. The highly professional service this software system has, is why my confidence in this system is so great. Not only the program, but also the vast amount of practical on the job experience, that shines through every part of it. It is easy to forget the amount of work that goes into a task and running a business, but with ES2, all of that is built in. The thought that went into each task extends into the back office. With direct input into quickbooks online, it more than pays for itself in the time saved from double entry. Great job James and crew!

John
Expediter Electric
Portland, Connecticut