The Cashflow Contractor

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In this episode, we’re talking with Michael Barnett, the owner of Barnett Electrical, to learn how he went from working 90 hours a week making minimum wage to closing in on his goal of retiring by age 40.

Show Notes

  • Who is Michael Barnett, and what was his path to being a business owner? (1:24)
  • When should you get lawyers involved in a family business? (3:26)

What was life like when he took over the company?
  • 2012 - 2016: Growing the company, focused on sales, no idea how much money was in the bank. (6:12)
  • What caused his vision of the company to change? What were the biggest issues he faced as a new business owner who was trying to build and grow a legacy? (7:18)
  • How was he prospecting for new customers? (9:14)
  • 2017: Focused his sights on commercial work because there was more money in it. (11:22)
  • They hit a million in sales, but started to feel some cashflow problems. (12:46)
  • Even though they grew in 2017, they lost money. So, Michael started talking to other business owners and took a mastermind class with Martin (14:41)
  • Bookkeeping 101: How to use good books to make decisions. (17:16)

Becoming a business owner, not just an electrician
  • Being a business owner is fun. (18:43)
  • They started focusing on service work because it had 40% margins without putting in any work to improve processes. (24:06)
  • BUT, Michael DID improve the service processes. Here’s how. (25:30)
  • Michael’s mentality through the changes? “Jump. We’ll build the wings on the way down.” (30:18)
  • The power of getting rid of the hourly rate and charging a service fee. (34:48)
  • How Michael sets his costs AND protects his customers. (36:30)
  • How technology supports his business. (38:30)
  • What was the key to turning around his business? (42:58)
  • The evolution of his vision. (45:28)
  • What’s Michael’s advice for others who want success? (47:35)
  • Ethan’s Insights — Ethan’s favorite moments from the interview. (49:25)


Quotable Moments
  • “If you’re cheap enough, you can get as much work as you want, but you won’t be around.” — Michael
  • “We broke a million, so where’s the money?” — Michael 
  • “If you have 35 margins and you raise your prices 10, you can lose 22 of your business before you lose 1 penny of profit.” — M
  • “Jump. We’ll build the wings on the way down.” — Michael
  • “As a business owner, you have to make those leaps of faith all the time. Otherwise, you just stay stagnant, get in a rut, and you don’t improve. You miss out on opportunities and you don’t grow.” — K


Resources

More from Michael


More from Martin


More from Khalil

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What is The Cashflow Contractor?

If you’re like most contractors we know, then you started your business because you’re passionate about and great at your craft. You also wanted to be your own boss. Owning a business has a lot of advantages, but also a lot of challenges.

We started this podcast to talk about things that matter to you as an owner, like business fundamentals, sales processes, marketing, leadership, and much more. Armed with knowledge, you’ll be able to reach your goals, whether that’s growth, getting your shop to run without you, or anything in between.