Starting an Electrical Business and Pricing Your Work Properly | Angelo from Toptech Electrical

Cold Open

Angelo: Holes, drilling, and hit a power cable. That was a kicker for me. I was ready to throw in the towel, probably after 6 months, to be honest with you.

Angelo: Nervous, I guess. Scared.

Meet Angelo: From Smartfix Electrician to Running Top Tech Electrical

Kane: Hey, I'm Kane Taylor Smith, the founder and CEO of Smart Fix and High Potential. This is Unlocking Business where we have real conversations around business, leadership, mindset, and personal growth. If you've been getting value from these conversations, please take a second to like, subscribe, and follow our channels. It helps us reach more people, bring on more guests, and share more stories. Now, let's get into this episode.

Our guest today is Angelo from Top Tech Electrical. How you going?

Angelo: Yeah, good, mate. Thanks for having me.

Kane: It's all right. Thanks for coming on the show. What does your business do, and when did you start?

Angelo: Just electrical and air con, and started in June 2024.

Kane: Yeah, okay. And what did you do before that?

Angelo: Worked for you — worked for Smart Fix.

Kane: So, what is the reason you wanted to start your own thing?

Angelo: More time and flexibility. And now I've got none of that. [laughter]

Kane: So, do you have more time and more flexibility?

Angelo: No. Sorry. Not yet, anyway. That's what I'm building towards, yeah.

Hiring Your First Tradesman: The Struggle to Find Someone

Kane: Yeah. So, what is your plan then? Are you looking at getting staff?

Angelo: Yes. Looking at hiring my first tradesman now, and then take it from there.

Kane: And how are you finding it, trying to find that first person?

Angelo: A bit hard. I could probably try a bit more avenues to get someone, but yeah, I haven't really.

Kane: What have you tried so far?

Angelo: Just Facebook and just ringing around people, but I haven't really tried.

Kane: Do you feel exhausted — cuz we always say referrals for us has always been the best way, and I think we spoke before and you've tried that, you've almost had someone come from a referral?

Angelo: Yeah. But then it didn't work out. So, I'll keep on.

Kane: Yeah, hopefully Seek works — we're looking for two electricians at the same time, and we've spoken beforehand, but we did actually manage to get — I saw the referral, a guy that left a while ago, and then we managed to get him to come back, and we did get one from Seek, so hopefully if we get some more through Seek, we can try and help you out.

Angelo: Yeah, no, sweet.

From New Build Commercial to Real Estate Maintenance

Kane: So, when I think you worked for us, was it 2 years?

Angelo: Ah, two, almost three, I think.

Kane: Yeah, okay. Was it 2021?

Angelo: Yeah, it would have been almost three, yeah.

Kane: And what kind of work did you do before that? Was it a bigger business as well?

Angelo: Nah, so it was a small business doing real estate maintenance, checking smoke alarms, that's about it, yeah.

Kane: Yeah, okay. Is that where you done your apprenticeship?

Angelo: Ah, no, so I did my apprenticeship at Westgate Commercial Company.

Kane: Oh, yeah.

Angelo: Yeah, new build commercials, I quite enjoyed it, but —

Kane: So after that, was that the real estate kind of work, or was there something else in between?

Angelo: Nah, that was it, from there straight into that.

Kane: Big shock coming from commercial and then to domestic, it's a bit of a learning curve.

Angelo: Mhm. Yeah, and air cons.

Kane: Yeah, and air cons as well, throw air con in the mix.

Angelo: Yeah.

Kane: Do you enjoy doing the air con side of it?

Angelo: Um, break it up, or I don't know — it's funny because all through summer you are doing air cons, and I don't know if I enjoy it as much as electrical, but yeah, I don't know. During summer, when you're hot and sweaty, doing them day in day out, it can get a bit repetitive, so yeah.

Kane: It is a shame that it's not consistent throughout the year, so you can do a bit of both — it's like air con, then there's no air con, cuz you guys don't do it throughout the rest of the year pretty much. Funny how that works, hey — cuz they do heating as well, but you don't get as much for the heating side, it's more during summer with the cooling side.

Angelo: Yeah, we get a bit more now through winter, to be honest, but nowhere near the level that happens through summer.

Kane: It's like December, January just goes insane, then it just drops off a cliff, then it starts to peak up a little bit through winter, especially now that it seems like it's getting colder, or I'm just getting older, I don't know, definitely feels colder.

Angelo: Yeah, I feel like every year it gets colder and colder, and same with the heat as well, it gets hotter and hotter every year, so —

Kane: Climate change. What is it, El Niño or something? Whatever it is.

Angelo: I don't know.

The Bad Air Con Install That Pushed Angelo to Go Out on His Own

Kane: So, what pushed you to actually make the jump into your business?

Angelo: It's always something I wanted to do. I don't know, I think it was — the push was that last week at Smartfix, stuff wasn't going right, and I thought I might as well give it a go myself pretty much, and I was just like, yeah.

Kane: That was it — peak summer?

Angelo: Peak summer, that's it. Just hit it — it was a really bad air con install in an apartment, I was drilling and hit a power cable, and then, I don't know, that was a kicker for me, I was like, yeah, I'm just going to give it a go myself.

Kane: Air con does that to people, hey?

Angelo: Yeah, it does.

Kane: It does, cuz we've obviously had issues with other people as well — they don't want to do ducted all the time, which is fair enough, now we try to share the load, okay, cool, you can do one or two ducted a week, we'll try and share it around, because it's genuinely an issue, it's hard manual labor, and I think it's usually 10° hotter in a roof space than it is outside, so 50, 60° in a roof, that's pretty hot, especially running all those ducts.

Angelo: Yeah, cuz most of the work's inside the roof for ducted, so —

Kane: Is that right?

Angelo: 80% of it, yeah, I'd say.

Kane: Too hot. Too hot for me. [laughter]

Trying to Generate Your Own Work After Leaving New Builds

Kane: What was the hardest thing for you when you first started?

Angelo: Trying to generate my own kind of work, I guess, cuz I started off subbing to Intelligent Homes, which was doing new builds. I quickly realized I didn't want to do —

Kane: Is that like communications, cables?

Angelo: Coms — I know, but power, lighting, coms, everything. But yeah, I think just being on site and doing new builds, it's a whole new ball game.

Kane: A little bit repetitive, hey?

Angelo: Repetitive, and none of the trades care for each other — you'll pre-wire your house, come back to fit off, and realize a plumber's ripped out all your cables to get to his spot, and it's like — that would happen constantly, it was a bit of a nightmare, so —

Kane: Ceiling fixers just slap ceilings and not pull the cables out of the way?

Angelo: Cables through — oh yeah, getting cables stuck underneath beams, a nightmare.

Kane: Like cuz that would obviously mean you got to do the fault finding then, hey, or just rerun it, rerun the wiring.

Angelo: Yeah, and then, because it was a subcontract, to go back and fix it, it wasn't really worth the time and money to go back and fix it, so —

Kane: I thought you'd have to though, hey, you'd have to go do it.

Word of Mouth and Local Facebook Community Pages

Kane: So, how do you get your work now?

Angelo: It's word of mouth, and a lot of the Facebook community pages.

Kane: Okay, yeah. Did you do that all yourself? Are you on there monitoring that?

Angelo: My wife is the one that does most of it — tagging, monitoring, and stuff, and it comes through the business page on Messenger.

Kane: Is that cuz you have a business page on Facebook, and that's what you use to respond to the messages?

Angelo: Yeah, it all comes through there. So, I don't bother the local community page anymore in Caversham, because I feel like I've built up a bit of rapport — me and my wife aren't the only ones tagging Top Tech in it anymore, there's a lot of other people, so I'm trying to focus more on the surrounding areas, a bit close to home.

Kane: So, would you call yourself the king of Caversham?

Angelo: Yeah.

Kane: And the title?

Angelo: Yeah, well, it's good cuz I'll get a phone call and they're like, "Oh, they love you on that page, mate," blah blah blah going on, so —

Kane: Yeah, it's really your local area.

Angelo: Yeah, good as that. I wish there was enough work to keep me all busy there, wouldn't have to travel, but —

Do You Have Enough Work to Keep a New Hire Busy?

Kane: So, when you do find that electrician you're looking for, do you have enough work to keep them busy as well?

Angelo: Yeah, so probably me and him definitely two or three days each, I would say — not booked out, but probably steady enough.

Kane: So, then I assume you would just make sure they're fully booked 5 days a week, and that would free you up time to figure out how you're going to get the extra work in, and you'd have to go to site to do more quotes and stuff like that.

Angelo: Yeah, that's it.

Quoting Over the Phone vs Going to Site

Kane: Do you go to site to quote at the moment, for everything?

Angelo: When I can. So, what I usually do is I'll be on the tools throughout the day, and then I'll try to book the quotes at the end of the day, on the way home or something, sometimes I just can't get there. And I find a lot of people would prefer a price over the phone, I don't know if they're price shopping or not, I do get a lot of kickback asking to come to site to quote.

Kane: Yeah, we do too. I think people do either price shop around, or they don't want to waste their time, or they think it's easy to just price on the phone, so we just have a bit of a spiel where we explain that we need to come to site — every house is different in terms of where you want the power point, where you want the air con. I had one literally yesterday, cuz we usually turn them away completely, but obviously with the slow time of year, our new process as of this week has been, if they call us and just flat refuse us going to site, we'll make a job booking, get all the information, then task it to me, then I'll call them. I had one exactly yesterday — it was an air con install he wanted. It was a townhouse, side by side, so there was no access, there was an outdoor area, there was a pool, he didn't want the outdoor there, is it going on the roof, how are you supposed to quote that over the phone? So, I gave him an approximate — this is subject to us coming to site, because I don't know where your switchboard is. I did have a look on realestate.com to see the photos, but —

Angelo: That's handy, that site.

Kane: Very handy — cuz measurements as well, cuz he said, "I was thinking about that location but I don't know if it'll fit," and I was like, me neither. That's how we ended up on site. So for him it was a rental, so it was a little bit difficult, but —

Angelo: Ah, okay. Yeah, so it's a workaround, ideally going to site is the way to go.

Kane: Yeah, I think so too, win a lot more on site, I think.

Why Meta Ad Leads Dry Up After Two Weeks

Kane: Yeah, definitely. If we spoke about this before with Facebook, hey, I think you were quoting when you done some meta advertising, you priced a lot over Messenger. How did that go?

Angelo: It's funny cuz this was the second time I've used the meta ads, so I don't know what happens — the first, like, 2 weeks get good consistent leads, and then it just drops off, like, they'll message you, "How much would it be for a power point?" You'll tell them a price, and then that's it, you'll follow up and they won't reply to you. So, I feel like it worked really good for the first 2 weeks and then just dropped off.

Kane: I just had a thought then — always have, like, marketplace, "Is this item still available?"

Angelo: That's exactly what it's like — yeah, they just disappear off the face of it, that's so annoying. I think bots do it or something, but I don't understand what it's supposed to be. It's a bit strange. But then I was talking to a — I do power points for an appliance guy who does dishwasher installs, and he does a lot of meta ads and gets a lot come through, so I don't know if it's got something to do with his little niche market of dishwasher installs being a bit different compared to electrical work.

Kane: Maybe. Maybe it's a little secret — that's it, how to deal with the leads.

Was There a Moment Angelo Thought It Wasn't Going to Work?

Kane: Was there ever a moment where you thought it wasn't going to work having your own business?

Angelo: There was a point where I just hired my apprentice, I still wasn't doing any of my private work, it was still subcontracting, and I wasn't making any money or anything, and I just thought, is it really worth doing this? I was ready to throw in the towel, probably after 6 months, to be honest with you.

Kane: Yeah, okay.

Angelo: But then I started generating a bit more work.

Kane: It probably wouldn't have helped me calling you every few months to see if you wanted to come back.

Angelo: [laughter] Yeah, that's it. But I did tell myself I'll give myself a year before I made any rash —

Kane: You have to, hey, the first year it's always going to be hard, no one knows what they're doing, it's just winging it, that's pretty hard. So, as long as you got people just to speak to, to get advice when need be, or when you have those moments — do you have people you can call and have an honest conversation, and they can push you back into what you want to do?

Angelo: Yeah, a little bit — my wife's pretty good like that, and then I've got you and stuff like that. Ryan.

Kane: Ryan, yeah, he's good, sometimes.

Angelo: And then, yeah — like that's the other thing, when you first started out, I felt like I was alone, no one to talk to, no one to ask questions, cuz obviously coming from Smart Fix, quite a big team, and then leaving and being by yourself, it's a bit hard.

Kane: Not that you really need, but even for, I suppose, technical advice and that kind of stuff — call Kaylee, you got a Kaylee job, or roof mount, welding, gas — did you speak to anyone like that when — I suppose when you left, did you still speak to the guys for anything like that? Did you feel like it?

Angelo: Mostly, and then Bromley for the other air con stuff.

Kane: I think that's good, because we have a solid team, so no one's going to get funny when people leave — I find that really weird when people go wild when someone tries to leave, but Perth's so small, and there's enough work out there for everyone, hey?

Angelo: Yeah, that's it. Tons of work out there, yeah.

The Moment Angelo Knew Everything Was Going to Work

Kane: Was there a moment where you thought everything was going to work?

Angelo: Recently, probably Christmas just gone — workload picked up tremendously, the apprentice left, I didn't have to pay for him, good quality leads, good paying jobs. Probably up until like, I said, like, start of April, started slowing down for me, but yeah, I built enough money in the bank, I can finally see the light at the end of the tunnel kind of thing.

Kane: Why do you think December picked up for you?

Angelo: I honestly have no idea, I think it was just — cuz I remember last summer had no really air cons, I didn't really have my name out there. So, maybe coming into this summer it was a bit different, cuz I legit was doing air cons for like 3 months straight — December just gone, yeah.

Kane: I was going to say as a joke, was it air —

Angelo: Yeah, it was all air cons, but I had a good couple of leads come through, so that was good.

Kane: And obviously we had the workshop Q&A last night, we were talking about how April every year for us, statistically, is just terrible.

Angelo: Yeah, public holidays, school holidays, and everyone in the call, I think, had the same effect.

Kane: Yeah, everyone I speak to is like, "Yeah, it's a bit casual" — leads slow down, conversion rate drops off, still your overheads to cover. Obviously, like you said, you didn't have the apprentice, so you managed to save there.

Should You Hire an Apprentice or a Tradesman First?

Kane: It's another thing we've been speaking about recently — I know you hired your apprentice as your first employee, and we've been speaking about this with everyone. What do you think is the right way to go? If you were to start again, would you hire an apprentice first or a tradie first?

Angelo: Uh, definitely a tradesman.

Kane: And what's your reason?

Angelo: The apprentice is good for an extra hand on site and stuff, but with a tradesman you don't have to teach him or baby him, and they can go out on their own and actually generate you more money, I guess, essentially. Yeah, I don't know, it didn't work out for me, the apprentice straight away, so I think —

Kane: You had it for a while though, hey?

Angelo: Yeah, about a year and a half.

Kane: Yeah, okay. So you said you started in 2024, is it almost 2 years, or you've just gone over 2 years?

Angelo: 2 years now, yeah.

Kane: Yeah, okay, so that's a decent amount of time to still keep an apprentice.

Angelo: Yeah, it was good, but yeah, I don't know.

Kane: Do you feel like it forced you, obviously, to be on the tools all day every day, because you had to, because you had that responsibility of, I need to make sure he's busy full-time?

Angelo: Yes, that was another big thing, actually. I felt like I had to be busy 8 hours of the day on the tools, couldn't have a random day off here.

Kane: Yeah, like say tomorrow if I really wanted to, I could not do any jobs, spend a day on the computer, and do stuff like that.

Angelo: Which I couldn't do when he was there, cuz you're not supposed to send apprentices out on their own, so if I wanted to do that, I couldn't be like, "Here's a van, go do that."

Kane: And they're not too happy when you ask them just to come into your garden and give you a day while you're inside in the air con room doing your work.

Angelo: Yeah, no.

Finding a Tradesman: Fear as the Real Barrier

Kane: At what point did you realize you wanted more than just working by yourself?

Angelo: I knew from the beginning that I didn't want to work by myself, this is why I hired the apprentice, but then again, then I hired him and I think that was a bad idea, and then now I'm by myself, I've realized it was a good idea, and now, obviously, trying to find the tradesman to help out a bit more.

Kane: So other than being able to find someone, is there anything else that is holding you back from hiring that tradie?

Angelo: Probably myself. Nervous, I guess, scared. But I shouldn't be scared, cuz what's the worst that could happen? I mean, I've already got a car for him, it's not like I'm forking out hundreds of thousands of dollars to get him on the road, but yeah, it's probably mainly myself, I think I'm a bit scared, but yeah.

Kane: So if someone applied today and they seemed good, what would you do?

Angelo: I would give it a shot, I think, yeah. I was scared, but I think now I'm at that point where I need to do it just to see how it goes.

Kane: And you got a van.

Angelo: Yeah.

Kane: Hopefully you're in a new van in the next couple of weeks, hey?

Angelo: Yeah, hopefully — well, it was meant to be this week.

Kane: Come on to order, right, bring the goods in, that's it. So once that comes in, they'll try to find someone to stock the van up, and then you'll go into the new van, and you're going to keep your ute potentially, or you trading it?

Angelo: Yeah, so I got to buy all new ladders, all new —

Kane: Oh, actually, if you need ladders, you let me know, we got tons.

Angelo: Yeah, okay, hook you up.

Kane: Roller cases as well.

Angelo: Okay, sweet.

Test Equipment: Metros, Calibration, and Cost Control

Kane: What else — like testing, do you keep the vans stocked with any testing equipment as well?

Angelo: That's — pretty much the only main tool we do supply for sparkies is a testing — like a Metrel or something, cuz they are like two to three grand for a good one, and most guys — everyone should have their own tools, but that's the one thing that for some reason no one ever has their own, so we do supply them.

Kane: And then you got to recalibrate them and service them every so often, so we're responsible for doing that, so we just have to make sure we do that. I can't remember what brand the new ones are that we use, to be honest, it's very similar to the actual Metrel one.

Angelo: Oh, he's not using the Metrels anymore?

Kane: Don't think so.

Angelo: Yeah, okay.

Kane: I'll find out what he uses. It comes down to —

Angelo: Is it pricing?

Kane: Obviously pricing, and it needs to be good enough, cuz there's certain brands, you go out there and look at the big brands and they're obviously double, triple the price, and because we have to buy so many, sometimes we're like, nah, we're just going to buy the cheap one that doesn't last as long, we'll just replace it, but so far so good.

Angelo: Yeah, most guys look after them, say no, you know what I mean, there's nothing worse than getting false readings, getting your job stuffed up, so the guys look after them.

Kane: Don't scratch. Yeah, okay.

What Didn't Work: Cold-Calling Real Estate Agencies

Kane: What didn't work for you that you thought would have?

Angelo: Um, so when I first started out, I was trying to go down the real estate avenue, which didn't work out for me. I thought it would be easy as picking up the phone, ringing around every real estate agent in Perth.

Kane: I reckon every single person that starts on their own thinks the same, does the same, so I think real estate just gets absolutely blasted.

Angelo: Yeah, yeah, didn't work out. The main issue was trying to get past the receptionist to actually speak to a property manager or something like that — cuz at the start I'd leave my details with the receptionist and wasn't getting anywhere, and then I'd try to get to the next step, actually speaking to a property manager. Even I'd go into the real estates and try and introduce myself, but it never really got anywhere.

Kane: I do think that's why a lot of people do the same thing, so I think for them, I assume they would engulf other referrals or get you that they know of previously, obviously they're very price orientated because they have to be, because of the homeowners.

Angelo: Yeah.

Kane: But you might — I think you said before you've got a good contact, you don't have to name what school, but within schools that you might be able to get another school needed the maintenance there.

Angelo: Yeah, so I am doing maintenance for one school and a camp as well, and I was doing it for two schools, but I haven't had anything, they got a new BDM and stuff, so it's a bit up in the air, and yeah, hoping to get another school. And also there's some hotels that I'm doing a bit of maintenance work for, I'm hoping — cuz it's just one at the moment, but hoping to do a couple more.

The Risk of Relying on One Real Estate or School Contact

Kane: Is that right? I suppose that is a risk factor as well, you just said then, like, they got a new BDM, and then you could lose everything. I think that's the same with real estate — people, if you do get a lot of work from one or two, and as soon as that property manager leaves, goes somewhere else, they bring someone else in that's got their own sparky, you could lose everything overnight. So, there's obviously pros and cons to doing real estate work — try not to put all your eggs in —

Angelo: Yeah, I think — cuz I said the only real estate I got was for ones that I've previously worked at for previous companies, that I've had a relationship with before, so — yeah, that didn't work out for me, but —

Kane: Do you feel like you have to charge less when you do the real estate?

Angelo: Yes, I feel like it's very competitive on pricing. I think again, the same reason, they get so many people approach them, they have the pick of the price pretty much, and they always go for the lowest price, I think, based on my experience.

Kane: Until they get bad — so you use someone, and until they stuff up, and then —

Angelo: Yeah, and then move on to the next one.

Kane: Do you think they should just pay more, get a better sparky?

Angelo: Pay more, maybe build up a bit more of a relationship. Don't know.

Angelo's 5-Year Vision: Off the Tools and Managing the Business

Kane: What do you want your business to look like in 5 years?

Angelo: In 5 years, hopefully me off the tools, maybe in a little workshop somewhere, just managing the business.

Kane: How many vans do you think you'd need on the road to be able to do that?

Angelo: Maybe five, six, probably.

Kane: Yeah, are you happy doing the administration work yourself, or do you think you'd have someone that would help out in the office as well?

Angelo: So, next year when my son goes to school, my wife will be helping with the admin side of things, which will take a bit of a load off me — it won't be much, I think it's mainly going to be to get branding out there on social media, that's what she really wants to do.

Kane: Yeah, okay.

Angelo: I'm not doing it, so I guess she can give it a go.

Kane: How do you think it'd go working with your wife?

Angelo: This is going to get — [laughter] — no, we usually work together pretty well, at the start she was helping out a lot, but yeah, we'll see how we go.

Kane: Does she have a marketing background?

Angelo: Really, just enjoys it, but she's thinking of actually doing a marketing course, which will hopefully help the business.

Kane: Definitely — like this, we've been talking a lot about social media recently, and I met — I think you know of The Carpenter, he's with us — he started his own and he's getting really good results, a lot of it's like him being filmed.

Angelo: Yeah, right.

Kane: Do you have to come to site and film your videos, walk-through videos?

Angelo: Yeah, might have to get a photographer out, I don't know, maybe eventually, we'll see how we go.

Kane: Yeah, we'll get there.

Turning the Tables: Kane's Own Early Days

Kane: All right, should we turn the table?

Angelo: Yeah. What made you start out on your own? Any particular reason?

Kane: Pretty similar to you, I didn't really — I was a bit over the company that I was working at beforehand, and I just thought it was really fun, like, bought my own vehicle, I bought a Holden SV6, I think that was the best work vehicle, it was a nice car to drive, I'm pretty neat, so I had all the boxes and little ladder drawers that I built a shelf and everything, so it was good fun, I just loved the change. Yeah, I had no plans on growing a big business, I just had no intention of hiring anyone.

Angelo: Yeah, did you just wing it at the start, or —

Kane: Yeah, I definitely winged it — I think I'm still winging it now, to some degree. [laughter] It was good, and then once my brother Finn was an apprentice at the time, so it was super convenient and easy for me to bring him on, and yeah, just escalated from there.

Angelo: Yeah, okay. What was the reasoning for hiring — like to make your life easier, or was it just —

Kane: I don't really know, you just thought — I think I'm going to do it, or — yeah, I think the biggest thing for me was it was super convenient, and from memory, Finn was — he was in new builds, I think he was a little bit bored of doing the same thing over and over again. So it just worked out — I remember that when we first started, I had my car, which was quite a nice ute, and then we always joke about it, we actually drove around and found a van online — I can't remember what year it was, it was old, it was a Toyota TownAce.

Angelo: Oh yeah, ancient.

Kane: So, we went down and actually picked it up from a car park in Freo, and some of the travelling around was like a thousand dollars, it had tie-dye curtains in the back and everything, and —

Angelo: Like a hippie van.

Kane: Yeah, it was like a hippie van, so we left the tie-dye in there, and then obviously we done all the stock around it — it didn't last long, that vehicle.

Angelo: No. Broke down or something?

Kane: Yeah, broke down on the freeway, I thought all right, I thought the thing was just trying to get out of working that day, but no, the engine was on fire. So that's it — it was more of a convenience thing, being able to hire him, but then I was, "Oh, this is actually fun." Then we hired the second person, and I think we were like between four or six, and I could spend a lot more time in the office at home, we didn't have kids at the time, so —

Angelo: Yeah.

Kane: I loved working from home, setting up all the systems, like ServiceM8, the phone system, and advertising, and that kind of stuff, I really enjoyed it.

Angelo: Oh, that's good. Have you noticed it being a bit harder now that you have kids?

Kane: Yeah, definitely. See, I worked from home, and then we did get an office, I think maybe in the second year, so I definitely couldn't work from home with kids now, all the time, cuz for me you have to separate sometimes, but yeah, just running business in general with kids, as you know, it can be interesting, but having that flexibility of working for yourself as well is helpful.

Angelo: Yeah, definitely.

Kane: You can do the school drop-offs and pick-ups.

Angelo: Sometimes, or kids' carnival days —

Kane: I know there's day stalls we went to last year — my daughter went to one the other day.

Angelo: Yeah, yeah, I feel like they — like seeing you there as well.

Kane: Yeah, and she's good.

Kane's Own "Throw in the Towel" Moment

Angelo: Was there a moment where you thought, "Ah, I'm just going to throw in the towel"?

Kane: Not really. No — we had a point, obviously, end of last year, we had to scale back significantly, so there was points where I thought we might have had to, just from a financial point of view — it got quite scary for a while, but I managed to turn it around, and now we're in the best position we've been in, like a third of the stress and that of what it used to be.

Advice for Anyone Thinking of Going Out on Their Own

Angelo: Do you have any advice for people that are looking to maybe go out on their own?

Kane: I'm trying to think — I mean, there's obviously advice I sort of try and give to go out on their own — we obviously have guys that sometimes leave Smartfix cuz they want to do their own thing, and it happens, like, on a regular basis, maybe a couple of times a year, we'll have a good person that's been here for so long that will leave to go on their own, and again, we don't — I would never burn any bridges, so we always say no worries at all, if you want to come back, let us know, or we'll keep in touch — that obviously happens a lot, so. Advice would be, just make sure you're all over the customer service point of view, because that's everything — if you don't have customers, you don't have a business. So just do the right thing. Don't undercharge. That's a massive one that we've spoken about a few times.

Why So Many Tradies Undercharge — and Never Learn Their Numbers

Kane: We actually done some videos yesterday of me reading through some Smartfix comments, and it's just embarrassing — I think one in five businesses fail, and I think people don't understand how much they need to charge to cover costs, people don't know their numbers.

Angelo: Yeah.

Kane: Like, did you learn that at TAFE? Did you learn how to check your P&L, your balance sheet, and making a budget?

Angelo: Still trying to learn all that now, so —

Kane: I honestly have only really started doing a proper budget sheet in the last 2 years, and we're like 8, 9 years into a decent size company. No one teaches you.

Angelo: Yeah, I did have a little rates calculator at the start, but even still trying to put all that information in the spreadsheet, it's still — that's the — I'm at — yeah, it's figuring out — like, you'd have it if you use Xero, whatever, you'd have it somewhere, but it's figuring out what is the recurring cost, why does that change, there's so many things you have to think about.

Kane: Yeah, and like you were saying the other day, when you're on Xero, "Oh, maybe check it after the month," talking about net profit and stuff like that, it's not always really accurate till it comes the end of the month where you're paying all this money out. It's like, right — so for us now we know, like, the end of the month, if it's the 30th or whatever that date is, we normally need to leave it like 1 or 2 weeks after, because then you need to wait for the wholesalers' invoices to come in, or the statements, all your other bills, make sure that's put in there correctly — it's got to be in Xero correctly as well, so you understand where it's sitting, and that can take time, and obviously if you don't have any experience in accounting, it's hard.

Angelo: Yeah, definitely, obviously having a good bookkeeper.

Kane: But you need a good bookkeeper, then an accountant as well, but you have to understand it yourself to be able to then think about, can I make that next hire, can I actually afford that. That's another thing, like in our Xero, for some reason it doesn't calculate the vehicle repayment costs, it only calculates the interest, which to me is mental, you need to know and factor that in, so now we add that in manually, we call that, "This is what it costs us weekly to run our vehicles."

Angelo: Yeah, okay.

Kane: Public holidays as well — that's another thing that people I think seem to miss out on, is you need to factor in that this — there's 10 public holidays each year, that's 10 days of no money coming in, unless you do call-outs, which we don't do anymore, so that's a lot of money.

Angelo: Oh, really?

Kane: Yeah, and that's why April's so hard — cuz there's three Saturdays that day and two for Easter, and there's a five — so every 3 months there's a five pay cycle period, and April is one of those months as well.

Angelo: I could imagine that being a bit of a cash flow issue.

Kane: 100%, people like your sort of businesses, your size — so now we have a bit better idea, we can forecast ahead, we know April's coming up, what can we do about it? Like we spoke about last night, we do a lot more email campaigns, I've done a bit of SMS marketing, we reach out to existing clients to say, "Hey, we've just been through summer, it's a good time to get your air con serviced before it comes into winter and you can use it for heating," cuz air cons do fail when you run them through summer, if the air con's old, it often happens when they go to heating and it doesn't work.

Angelo: Yeah, again, had one yesterday — she used it all through summer, went to go to heating, and it just doesn't work at all.

Kane: Yeah, okay, don't know why. Do you know why? Why does it happen?

Angelo: I don't know why it happens.

Kane: [laughter]

What Angelo Charged as His First Hourly Rate — and Why It Was Too Low

Kane: Yeah, now that's a big one about the undercharging.

Angelo: I had no idea at the start what to charge on anything, so I was just kind of winging it.

Kane: What was your hourly rate when you first thought about it and started?

Angelo: When I first started, I remember my first job I quoted was at $100 an hour.

Kane: I was going to say — it's like the thing everyone thinks you got to charge, like 110 an hour, but that is just crazy, that's ridiculous.

Angelo: Yeah, I quickly realized that's not the way to go about it, so — but even then, you raise your prices a bit, like, all right, not 100, it's 130, still not enough, and you're still raising it — gradually increased it to now where it's — got good money coming in, can afford to pay the bills, buy a van and stuff like that, so.

Kane: I think what people think is, if I was charging like $300 an hour, and I'm telling customers that, the customer's thinking, "You're charging me 300 an hour, and that's how much money you're making." So that's the whole mindset, but they don't understand there's a whole business behind it — it's not, I'm taking that home, that's crazy. That's what most people would do, as tradies that don't understand that — again, you don't learn this stuff through TAFE or your contractors.

A TAFE Lecturer Teaching Tradies to Undercharge

Kane: We actually had a story the other day, this is an interesting one — so we had someone doing the last blocks at TAFE, and it's a TAFE lecturer talking about pricing.

Angelo: Really?

Kane: Yeah, so they made a comment about Smartfix that I thought was —

Angelo: Oh, really?

Kane: Yeah, okay, you know who I mean.

Angelo: Yeah, yeah.

Kane: And then they were talking about what they charge, and it was ridiculously low. So that's the kind of people that are training our tradies and contractors to then run their own business — that's a big issue in my opinion.

Angelo: I think so too, because you're setting them up to fail, really — I mean, it might be good at the start, but it's not going to go — it's like feel good —

Kane: Yeah, and then it won't last — you might get through a year, maybe 2 years undercharging, then you get your tax bill at the end of the year, and you're like — have the tax away, which is another thing.

Angelo: Yeah.

Kane: I can't believe that. That's again — that's why I'm starting High Potential, just to try and help people out with a lot of experience through the highs and lows of running a business, and for me able to help people, because once you know all these things, I think there's a lot of things that are unteachable lessons.

Why Undercharging Is Actually the Riskier Business Model

Kane: There'll be things that we tell people, and pricing is a hard one — I've spoken to a lot of people that charge like $80 an hour, $110 an hour.

Angelo: Yeah.

Kane: It works for them — sometimes if they've got consistent work from certain places you can survive, but you can't really grow, there's no opportunity, because — I've talked about before, it's risky you taking on a tradie, but if you're charging $110 an hour, that's even more risky, because you have no surplus cash in case you hire him, he's terrible, you keep him for 2 weeks, have to pay him out a week's notice, that's a lot of money and you have no surplus. Then it flows onto the customer, then they get a bad service because you're now stressed, panicking, rushing through their job because it's cheap and you need to get to the next job. So then their job is rushed — customers wouldn't really understand that if you tried to justify it that way, but again, we win 60% of all our quotes, 50 to 60%, which is quite good — so people have no issue paying for a good service.

Angelo: Yeah, that's important.

How Do You Know What a Fair Price Is If You've Never Bought a Trade Service?

Kane: Oh yeah, so at the start, I was — I think it was you that I was talking to about — no, I don't think we — I was speaking to another electrician, and he goes, "We were speaking about — oh, I charge 330 an hour," and I'm like, that's a bit — thought that's a bit expensive, and he's like, "Have you ever paid for electrical work?" That's what he told me. I'm like, no, not really. So then he's like, "How do you know what's expensive and what's not?" So I was like, that kind of put me in a — I'm like, yeah, that's true, I never really have, so I don't really know what the price of something's worth if I've never actually had to go and shop around — you know, what we were thinking about it.

Angelo: Have you had a plumber come out that you don't know of?

Kane: No.

Angelo: So what have you had? Any trades ever in your house?

Kane: Air con people, before I knew air con, yeah, that's the only really one.

Angelo: Do you obviously probably remember that? Do you know what you paid, and what for, or no?

Kane: $650 for a back to back.

Angelo: Labor only?

Kane: Labor only.

Angelo: Is that expensive?

Kane: Cheap.

Angelo: Back then though, did you think it was expensive when you didn't?

Kane: No, not back then, I thought that was cheap, still.

Angelo: How long did it take him?

Kane: Couple hours — oh, I wasn't there, my wife was there, but probably.

Angelo: Like you know now you could do a back to back in two hours, yeah, that's $330 an hour — obviously I don't know whether that's inclusive of materials, but I assume not.

Kane: Yeah, no.

Why the Big Retailers' Cheap Install Prices Don't Add Up

Angelo: So then that's obviously what the big retailers — they sell air cons from their shop, then they'll use subbies or contractors to do the installs for like 440, 660 for back to back, hey?

Kane: Yeah, which obviously to me that's crazy, cuz not all the jobs take two hours, so we obviously charge more than that, but — I'm like, there's quite a bit of materials that you still need — the copper pipe, that's expensive, isolators, brackets, and all that stuff —

Angelo: The cover.

Kane: By the time you buy all that, what's left in the job? Like 400 bucks? It's not much money in there at all.

Angelo: We had one this week when I went out, it was the same air con I mentioned before, so — gave her a price, and they obviously looked into it, went into a shop, I can't remember which one, found a similar air con, the same size, they've obviously just seen the price of the unit.

Kane: Mhm.

Angelo: They're like, "Yeah, but there's still all the rest of it" — like you said, it's the copper pipe work between the indoor and the outdoor, it's the isolation switch, it's the RCD in the switchboard that we needed to replace.

Kane: Yeah.

Angelo: New wiring, cuz we don't really like using old interconnects, it's not really worth it. They said, "Oh, how much is that?" And they're like, "Well, it's still going to be like $400 just for the consumables that are needed. And then if we install the air con that you supplied, and it stops working in 2 months' time — like, then what? We will go out there and check it and test it, if the air con's got an issue — if we supply the unit, which yes, we do have markup on that, well then you've got the warranty, our workmanship guarantee. Whereas if they buy their own, then they come to us, they're like, 'I don't know, you need to deal with warranty,' and they're like, 'No, you bought the unit.'"

Kane: "That's why we have markup on that unit, because we know that happens, you have these issues."

Angelo: Yeah, true.

Disposing of Old Units and What Scrap Is Actually Worth

Kane: That — I didn't like — disposing of their old unit as well, you can't just let the gas out into the atmosphere, you've got to do it properly, that's time.

Angelo: Yeah, that's right.

Kane: Yeah, that's what — the scrap yard — I don't know, do you get scrap anymore for old units, like a split system?

Angelo: Oh yeah, it's not much though.

Kane: Like 20 bucks?

Angelo: I don't personally do it anymore because I don't have the room at my house place anymore.

Kane: What, so you try and leave them on site?

Angelo: Oh, literally, after that job, I'll either take them to whatever's closest, if the recycling center's close, I'll take them straight to there.

Kane: Yeah, I'm not keeping them running — I'm literally —

Angelo: I stop hitting your garage — yeah, I'm literally getting rid of them straight away, cuz I don't have — obviously now — before, when the garage wasn't set up as a workshop, I had the room, but not anymore, so I try to get rid of it straight away.

Closing

Kane: All right, anything else you want to go through?

Angelo: Nah, I think that's about it.

Kane: Cool, wrap it up. Where can people find you online — do you have Insta, socials, or a website?

Angelo: I've got a website — toptechperth.com.au.

Kane: Nice, thanks for coming on.

Angelo: No worries, mate, thanks for having me.

Kane: Thanks for tuning in to this episode of Unlocking Business. If you've enjoyed this conversation, please take a second to like, subscribe, and follow our channels. It really helps us to bring on more guests and have great conversations. If you'd like to connect with today's guest, the details are in the description below. I'm Kane Taylor-Smith. I'll see you on the next one.