016 - Building a Family Legacy with Michael Barnett
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
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