Replay - How to Barter Your Electrical Services and Not Get Screwed

0:00 Hello and welcome to Electrepreneur Secrets, the Electrician Podcast. We're here with you live, five days a week to help you master sales, simplify pricing and deliver premium level service. This one is for electricians, by electricians. As always, I'm an electrician, joseph's an electrician. If you've been listening to us for a while, you are likely an electrician, joseph, how are you doing today? Feeling great, other than the random tattoo itch that we had going on, but otherwise I'm feeling great. It's been a good day. Yeah for a Monday. We got a great start here. We've already had a couple laughs. If you're not with us in the Facebook group Entrepreneur Secrets, you could be laughing your Monday morning away too with us.

0:45 Before we actually get started here. We've covered a few things, but really what we just saw was Joseph do a big emphatic stretch, while forgetting that he just got his sleeve addition on the weekend a little bit of tattoo work. How did that feel, joe? It actually was a lot of fun. It was eight and a half hours in the chair. I loved it. I mean, I hated the inking part, but it's been years and years and years. I've been working on this, chipping away at it eight hours, six hours, five hours. So I finally have it done. I'm thinking about making a post about it sometime this week, but otherwise I can't wait to do some sharing. You are muted.

1:26 I was muted. I'm not muted anymore. I had to move my squeaky chair, which I was just explaining. Got confused for a house haunting. You're about to smudge your house, right? I kept hearing doorbells. It turned out it was a spring in my chair that I recognized once I got back from New York. So clearly I had new clarity coming home from that trip. Really enjoyed your place and your hospitality, by the way. You're always welcome. You were you. Honestly, I could not have asked for a better guest and I miss you already, man. I was going to say the chemistry that you guys are all seeing. It's organic. This guy is an awesome person. You couldn't have asked for a better person to work with. Well, I appreciate that we do have a great show today and I want to let you guys know of some wins on the inside, as Guillaume's joined us on the live here.

2:13 He's getting to hear this firsthand, but we got two. In our morning check-ins with our clients, received some great praise from Guillaume as well as some great wins. Um, congratulations to him. And having his biggest month and a couple years of business, we're super pumped about that, super pumped. And we were literally in our weekly planning session and I said to joseph isn't this why we do this? Ear to ear grins. Um, I couldn't be happier for you, guillaume, and we couldn't be happier to support you in that endeavor. Amen. It's one of those things where it took years and years, and years and years to put this process together and get it dialed in to where it was consistent, and it makes me so happy that all of our students don't have to grind the way that I had to to get to those wins that you're currently experiencing.

3:05 So, guillaume, truly it is like nothing more than an honor getting the opportunity to work with you and seeing you succeed. And just a slight correction there to be clear it's still a grind. Still worked hard, brother. I know we know you've been working hard, but the duration is so different. Seeing that kind of change right, being exposed to that level of experience, where we're here with you guys five days a week, has been a game changer for so many. Guillaume able to hit that milestone in just three months of the program, so super pumped. And today's topic, big transition. I was actually listening to Friday's episode, or our last episode that we recorded, and we at this point made a joke about a drum roll.

3:46 I was tempted to do it again dude, literally just tell me, I will get drums and bring them in this room just for the occasion I think there's a shortcut. I know we got rid of all the fancy shit you guys just to to just give value five days a week. We didn't want to be distracted, but I can see the novelty in having the little pad with the buttons and pre-recorded sounds so I can make the odd sound for you guys. But the big topic today is actually how to barter your services. As it came to, one of our clients this morning as a question. He was talking specifically about bartering services for a website, and we then enlightened him with many of the things that we should be looking out for in that exchange.

4:29 How would you like to hash that out again, Joseph? The thing is with bartering. There's so many different things that go into it, because I want to first address the main fallacy that we experience. A lot of us got into the trade because we understand what it takes to build businesses or at least to do good electric work. So you may look at something and say, well, it only is going to take me three hours to do this job. Surely I can trade three hours of work for a perceived value of something more. The thing is this when you're bartering something, you always have to remember that it's never going to go as smoothly or as perfectly as you envisioned it.

5:10 They may have a different vision, you may have a different vision, but the key concept of bartering is that you usually expect to spend less donating your time and service than you would if you were going to physically hand out an exchange of cash. So it's very, very, very important to do the proper research to make sure that you've done everything you can to say if I do this one, is it a win for everyone, or especially me? And if it's not a win, what would it cost MSRP to get this service if I was going to have to pay it out? Right? And then what could I do with the extra time if I wasn't physically trading time for the service?

5:52 Does that make sense? Totally Very, very important questions. I'm reminded of a couple episodes we've done already in some of the topics. I think it's so important, like you said, to have that baseline established, but not just for yourself, like in many ways I always felt like the borders feel. There's an intuitive feeling of it's a shortcut service exchange. Yes, it feels like it's quicker and easier, but but there lies the danger. That's where we need that additional caution. Would you agree with that? I can, and I can actually speak to a personal experience where we got shortchanged on a barter deal.

6:35 Let's do it so. A lot of times, as I mentioned earlier, you barter because you think that you can get a better value from trading your service than you can exchanging cash, and a lot of times it's because one or two of the people involved are salespeople, meaning that someone has talked up their service more than what it physically is able to do. I was just as experienced in that situation In about, I think, the first or second year of my business. We, as per usual, broke as a joke. We didn't have a lot of cash to expend on things and at the time, all of our marketing was organic. We were doing door hangers. We were literally just organically on Facebook doing what we could.

7:17 So one of our clients that we were working with approached us and said hey, we're actually the owners of a major newspaper that's in your area and we currently appeal to something like 80,000 or 8,000 people that are in your area that are looking for work because they subscribe to this magazine. What we can do is I can take pictures of you and I can do like an interview of you and we can give you a nice centerfold picture of what you're going to do, and then people will naturally call you and you'll get more from the leads than you will from what we're going to exchange today. And we're thinking like, oh well, that sounds like a great deal Free marketing for you.

8:01 It's a win, win, win, win across the board. And at the time it was like, yeah, this project seems a little extensive, but you know what? 80,000 potential leads Wow, if we could only close 1% of them, that'd be perfect. How many people do you think called me from that arrangement? None, none, not a damn person. I still have the ad Right. Let's make the list. What went wrong here? So, really, what went wrong was it was an improper exchange of value. We realized that we could have paid more than the work that we traded to get the equal result of what it was.

8:42 We were sold on the potential of what could have happened. It was wow. We are exposed to 80,000 people Not that 80,000 people are looking actively for electric work and don't currently have electricians, but we were exposed to 80,000 people. We had a nice center page which described everything about us. But if you weren't looking for an electrician, what are the odds? You're going to turn a couple of pages to read it. And then this is even then, 2013, 2014,. How many of us are really reading newspapers? As weird as it may sound, we thought newspapers were still pretty active at the time, but they're really not.

9:29 Almost everyone gets their information from either online or streaming services or e-news. So I was taking a product and I was advertising to people who didn't need my services because I thought they might have. I was approaching them in a market that they wouldn't have seen and it turns out, if I really were to look back at it, it was an ego bait. It was an ego bait to say I'm center page with a full description and a nice photography picture and I could show off my business. Look, I'm in the newspaper and I clipped it and I saved it and I put it on our wall. That's all it was. It was just an ego bait and they knew it and we didn't at the time.

10:13 My mind is like overwhelmed right now with different podcast ideas that have come just from what you just said. There's so many nuggets in there, ego bait being one of them, absolutely. But I also I was listening to another podcast. Of course we listened to them too. It was a Lewis Howes and I think the guest was Simon Sinek. I want to say it was just. I heard it in passing while working around the house yesterday, but they actually used a metric to define the time and the length of scrolling that humans do on average in america. It's pretty pretty scary about the number because I don't even want to know what my number is we're talking beyond miles every week of thumb scrolling.

10:58 Wow, it's incredible. It was a big number. I don't want to quote it, but it was huge. That enough is alone, um, to say, yeah, the newspapers don't get as much attention anymore, it doesn't mean there isn't an audience there. There's a whole marketing lesson in this alone. But know who you're marketing to right. Know that demographic that reads the paper Like my dad still reads the paper every weekend reads the paper like my dad still reads the paper every weekend. He'll go his way to pick up the provincial one, for which, you know, for us the canadian equivalent of a state is a province. Not that we're here for geography lesson but, in case you guys didn't know and you've been living under a rock down there, guillaume knows what I'm talking about.

11:39 So we'll grab a popular paper like the province. My dad will read that front to back every weekend. But that's the demographic, though you know what I mean. If I am appealing to the people that are in the older generation that reading a newspaper, that's great. Let's say sake of argument. I am a historic specialist and I'm appealing to historic property weekly, that would make sense. Be like oh, I've got a situation. My first mistake was I didn't do the research into who currently reads this paper. If I had done that, my first thought would have been okay. How many real leads could I suspect to get?

12:22 The second was I didn't have a metric to go by. I mean, you think about it. Let me flip this for you. How much, just from memory. If you had to guess what was the value of exchange, you gave the newspaper. I want to say offhand $3,000. The reason why was because the project became more involved than what we originally thought. We were only supposed to put in like eight recess lights in their house and they had a drop ceiling. So it was like, oh okay, we're going to just fish, these lines are going to be done in half a day and we're going to get this Easy risk. But they actually painted the drop ceiling.

13:06 They physically took latex paint at one point and they painted them so to physically get them up. We were sitting there carving away at the drop ceiling with a knife and there was one point where, even though it was a barter deal, part of the tile physically broke because it was sealed and glued at one point, and she was like, oh well, this isn't going to do, you're going to have to come back and take care of that tile. It wasn't broken when you got here. Yuck. So then we had to come back and get the tile and then repaint it. It was a nightmare. It was a nightmare kind of job. And meanwhile, the whole time, you're thinking about that exchange and I hope this pays off.

13:48 I hope this pays off. So here's that big defining question. Looking back, if a newspaper approached you and said hey, joseph, we got a deal for you for just over three thousand dollars we'll give you the list of things that they gave you Would you have ever bought that? No. And well, actually I don't want to say no. My first instinct is to say no, but there are other questions that you can ask them and I would say okay. So, based on this information, let's say you have this newspaper and all the people are going to go to show me exactly which page I'm going to be accessed to. Am I front page or am I center? Like you have no idea where it's going to be.

14:28 How many people can you suspect are going to call based on these? Do you have a track record based on ads that are run? How much exposure and call are currently coming from them? Are there other ways that this can be established? Do you have an electronic form? Is there an e-site that you currently operate off of? Are there other ways that we can reduce the total amount to get a higher impact? All these things are important. Or even then to say, if I took this page let's just say sake of argument this was a very well-to-do page. Everyone's got them. Time Magazine, something like that, wants to host your company.

15:11 Just being in that magazine would be a marketing approach itself. So even if we weren't expecting to get any leads, I could then even ask and say, all right if I got nothing from this. Could I take this article and say we were showcased in Time Magazine and, as a response, this shows, this highlights our ability. See the page here. And that would just be clickbait in and of itself. That I can reallocate For sure, but without that information I'd be like I'm sorry If I'm going to take $3,000 and put it into something I'm probably not going to do, pay-per-click, I'm going to figure out.

15:53 What can I do to organically get that kind of appeal? Love it, love it. And so what I'm hearing, and really what I feel about this situation as well, is that if you're listening to us right now and you're one of our electricpreneurs, out there on your own running a business, and these exchanges are coming to you first question is do you already have a crm? Now, I'm a big advocate for crms. I think there's a ton that they handle in communication and scheduling and continuity between you and your admin, csr, your, even if it's just for yourself, it'll help you get organized and appear more professional. So, no matter what the CRM is, when an exchange comes in, the tendency can be to shortcut that exchange, and I am all against this In every case.

16:43 I want you guys, I want to see you guys not shortcut that exchange, but treat it like any other and recognize the costs associated with managing that exchange as well. Now, what else would you go to the next level, go even further with, to treat this like any exchange? so it actually is this. I'm thinking of another thing that I think would be very valuable, but it's a slightly different direction. Is it okay if I make a quick pivot, even though I think it's a point? Yeah, okay. Other things that come up is people will say the cash discount right. That happens all the time, where people will say, well, we're going to barter a service or the equivalent, we're going to pay cash for this job.

17:28 Now, a lot of people say cash is king. I disagree. My financial advisor actually says cash is trash, cash flow is king. I say that too. I love that statement. I love it, it's beautiful. So the thing that would come into place is when someone says, well, I'm going to pay cash on this, the first thing, what's the cash discount you're going to apply? Usually it could be like well, that's a great offer and you're right, cash is a wonderful thing to do. So it's safe to say that you won't be looking for a warranty, right? It's safe to say that you won't be looking for a permit on this, correct? We won't be doing any kind of inspections. What do you think that question is going to trigger in someone?

18:09 It's usually a one-word response, but what do you think it's going to trigger in them? Well, fear. It's going to be why. What do you mean? Cash is the best thing in the world. What do you mean? You're not going to warranty your insurance or anything. Well, think about it. The logic, the whole appeal of cash was the concept of someone saying I'm going to take money and it's going to be unreported money, to avoid tax, to further my business for one reason or another, and I'm not going to judge anyone for making that statement. But the moment there's an invoice and an insurance claim or a permit, you now have a paper trail, meaning that this is now a reported income, or the very least the IRS could pursue it as reported income.

18:54 So is this actually qualified under the cash deal? Well, you know what it really is. It's a place that business owners make an excuse for tracking, for proper accounting, and this ties wonderfully I'm glad you brought it up it ties perfectly in with the trade and the exchange and, like I said, any exchange is any exchange. We got to track it too often, guys like. Seriously. Prado principle applies 80 of us are out there striking cash deals like it means something. I can tell you what it does mean when you get to the point where you come to us or someone else, some trusted advisor for help in your business, and we go, what was your revenue last year?

19:38 And they go. Well, it was around here, but there was a bunch of deals under the table and that cash I then sunk in and some I gave to my daughter-in-law and they bought a car because they just had a baby and you know the baby's got to get to daycare and on and on and on the list goes. But there's no accountability and there's no trail there and, like you said, at some point it all comes back to you. It's not worth it cash is trash. It depreciates every day. Cash flow is king because guess what? This is why I believe in real estate and business. You know what I love about business Control Cash flow is king, like you said. So every bit that we earn is at today's rates, today's rates reflecting today's economy.

20:22 If you want my services, you got to pay today's rates. As far as I'm concerned, the cash you have in your pocket is almost worthless. In fact, it creates an extra job for me because I run a wholesome business and integrity. So that means if I got cash, I'm then gonna either put it in the safe for the week or I gotta take it to the bank today the pain in the ass. Exactly and, if you keep thinking about it even further, so many people get blindsided by this because not only do they go by and not track it, like you're mentioning, they believe that it's worth something but some people look at the upfront and be like, oh well, he's paying me cash, all upfront. I mean, yeah, I mean, of course I'm going to take this job, I'll get a discount for extra cash.

21:05 Why? Why are we bartering this way? You have to realize every barter. No one is going to give you a perfect, one-sided deal that doesn't benefit them on their own volition, unless they are truly so dim, and if that's the case, then you shouldn't be taking advantage of them. Yeah, exactly. So the logic is if someone is presenting you a deal that seems too good, it's often too good and there's actually a situation that comes up that I'd like to protect everyone against. Is it okay if I voice that? Yeah, do it, let's jump in, okay. Sometimes people will say here's my number, right, they'll be like round numbers I like to use.

21:48 This job is only going to call it. Or this project is only this investment is only going to cost a thousand dollars, right, you see, I actually mentally had to condition my way of wording it. The right way Went from job to project, to investment. But anyway, this investment is only a thousand dollars. How would you like to proceed? Well, what's the cash price? That's your first thought, and what it does is it causes people to pivot, because if you see that there's too much of well, I wonder what I could do. It shows that there's money built in and, as a result, even if they weren't going to pay cash, they now have the expectation that there's something built in. There's a one-lining response that I found was super helpful to disarm that question.

22:34 When someone says what's the cash price, I go oh, I apologize, I must've misunderstood. I thought this was a cash price and now they pause because you just completely put it back on them and now they need to turn. Am I actually going to pay cash for this? And if they're not, now you're in a situation to be like well, if I was able to honor the cash price, what would happen then? So it definitely implies that you've already sharpened your pencil. I love that, exactly. We're already at our bottom line. We're already at our bottom line. Yeah, here at ServiceSoup Electrical, we don't believe in handling. Our goal is to provide you the best service at the most reasonable and fair price that we can.

23:16 If it could have been lower without cutting away certain services, we would have made it lower. If you want to remove things to make it lower, you're more than welcome to would like to proceed love that I learn new things from you every day. That's one of the best things about this podcast. We get to uh, we get to voice our opinions about these subjects and help people while helping each other love it clay. You are a plethora of knowledge and I learned just as much from you as I, hopefully, you learned from me absolutely. I appreciate that. So what, earlier? I made an example of what happens then if you accept these cash deals and then come for help later because you can't figure out what's going on. I mentioned revenue, but I did miss something heavy on that topic and it's more important than revenue and it's called cash flow and we've been talking about it.

24:05 But cash flow in your business specifically suffers suffers when you do cash deals under the table and don't run that through like every other exchange cash flow. I mean, that's monopoly night with the family, as one of my mentors used to say. You're out of cash, you go to bed early, that's all there is right. 80 fail in the first three years. Shouldn't we be paying attention to this and know where that cash flow is and how our accounts receivable and our accounts payable are doing? There's nothing harder to track at the end of the year oh, we did a cash job and then I went and I paid the wholesaler back with cash and in your QuickBooks you've got no record of either.

24:50 You know, there was an example. I don't know anyone who gets into Broadway or not, but there's a play called the Producers and pretty much the whole concept was they had two books and the concept of the two books was show to the IRS, never show to the IRS. And the logic was is that if you're going to accept cash deals, still track them, Clay? You're 100% right, Even if you just wrote it on the back of a napkin. Track it, put it in the safe, know where it's going. If you're not going to report it, that's on you, but know where it's going, Otherwise you'll find out. You're in these bartered deals or these negotiated cash deals on a deficit, thinking you're winning.

25:32 And there's nothing worse than showing up thinking you're winning when really you're the one getting screwed. You know what that's again another podcast in itself. One of my mentors, keith Cunningham brilliant guy, brilliant business mind says that very same thing too Blueprint model for success you have to have, especially as a small business. We're all prone to these little exceptional expenses for our personal benefit, to write them off at tax time. You ought to keep that second set of books to track that stuff, if for no other reason, to have it in case, but again to actually know your performance metrics. Most businesses struggle because of what we do to them.

26:13 Let's be honest here, and steve went to uh, compliment you on, he said on the facebook group way to assume the sale with your cash comment. Yeah, the question, return that I, like that too, appreciate that. Thank you for the kind word, steve. I'm honored by you so we've been all over the place with this bartering for your services and how not to get screwed. But I think if you've been with us this whole time you begin to realize, hey, this is a narrowing tunnel that makes the conditions for an exchange of goods fewer and fewer. On the side of actually getting it done, there's a little more pain in the ass to it than most would prefer to just shoot from the hip with.

26:55 Would you agree with that? I really would. At the end of the day, what I see is that and I think I said it before earlier, but I want to double down on it there is no one who is going to give you an absolute win scenario and a lose for them to where it's completely one-sided, unless either A they're selling you something and it's not that great, or they are completely dim and you shouldn't be the one taking advantage of them anyway. Reminds me a lot of the episode we did recently on selling to friends and family, where people expect that extra. There's some really good frameworks in there to then pivot it back and make sure they're asking for what they believe they're asking for.

27:43 Make sure that they want the personal service without the company benefits. That actually lines up perfectly, because the thing that we would negotiate with our families are okay, you want less, you want me, you want cash, you want your own. Do you want a warranty? Do you want after-hours service? Do you want priority service? Do you want to be taken care of? Do you want me personally doing it? And then, as you create these expectations, they understand what's involved. Same thing with the cash. So thank you for actually thanks for stitching that. I appreciate it. Yeah, of course. So let's jump into some action items and wrap this one up, as we're getting a bit longer. I think we've already said them for the most part.

28:23 If I can start the first one, by all means Keep the continuity on the books. Do that due diligence, please. Guys. Run this like any other exchange. You've worked hard to build a business that honors this exchange so that people experience that exchange at the highest level. Why shortcut it now? Please do the diligence of researching what they're offering. Like Joseph said, most deals, if they look too good to be true, they are. You got to know, which means you got to do the research, which to me means at the end of the day it's a 95%, no, very few.

29:08 Very seldomly will we find the deal that actually makes a lot of sense to exchange and most times to understand that fully, it's going to take your research to recognize that. Now it doesn't mean you can't still work together. In fact it sounds like in these moments you've already got a conversation and you already know their needs, desires, problems, especially if they're the ones offering the exchange. So it doesn't mean no deal. In fact I would say it still means there's a deal there where you could just get paid for your services and if, in learning about there's more, you decided that that was a fruitful expense, then you buy.

29:48 Exactly that's my base action. I know that was a big one, guys, but do the diligence, put it on the books. Do you have anything in mind for All-Star? I do, and this applies to not only just this, but if you apply this statement, this will actually be something that protects you in business as a whole. Very rarely do we make split second decisions. That are the right decisions, right? So I'm going to give you a scenario and I want you to tell me how the average person reacts and what we should be doing different. All right, I'm ready. That customer is standing face to face with you. They've I'm ready. That customer is standing face-to-face with you.

30:29 They've already bonded with you, they've already connected and they say you know, it'd be great if we do a bartered service. I can give you this and this and this and this, and you only have to give me this. You're face-to-face with this person. You built a relationship. The instinct is to want to say yes, just out of politeness, even if we don't think it's the right thing. Especially if you brought that energy. I like it. I'm excited too. We could, we could. Exactly Right. So the magical line is that's actually an amazing offer and I really really appreciate it. My goal to make sure that I'm not taking advantage of you is to make sure that I have 48 hours to review this.

31:11 Let me get back to you back within 48 hours and be able to tell you what the best decision is Right then and there you. Being able to take your moment and step back buys you so much mental equity, because think about what you could do in 48 hours. You're out of that situation to where they can say you're no longer under pressure. It could be in a situation to where you have the ability of researching what it would have actually cost to do that service and therefore you'll know whether you're getting a great deal or not. Or, if nothing else, maybe you weren't going to work with them in the first place. They offered your job at $1,000 and they're like listen, I'll give you $200 and I do a car detailing service.

31:54 Now you're like, no, I don't want to do it, but you don't want to be rude. So thank you for the opportunity. That sounds like a great chance for us to work together. Just to make sure that I'm never taking advantage of myself or others. I always or if you don't want to take advantage, you can say I never want to overextend, both myself or others, so I always want to take 48 hours just to make sure that I'm doing the right thing. I love that that pause will be key. In fact, I have to add a layer to this because it was so good, joseph, I love it. In that 48 hours you've just bought yourself intuition time.

32:34 Even if in that period you thought to yourself after that offer wow, I'm actually pretty excited about this, but you did not find time to do the research, then you know it's a no. If in that 48 hours you got excited and did the research, then it's a potential yes until the data drives you or tells you otherwise. Wow, what a great rule of thumb. I appreciate that, guys. I hope that that helps you the next time you're considering bartering for your services and making sure you don't screw yourself out of the payment that you deserve, the fair value exchange that you guys all deserve.

33:18 So it's been another episode of Entrepreneur Secrets, the Electrician Podcast. We're here five days a week to help you guys master sales, simplify pricing and deliver premium level service. Again, I'm clay newmeyer with my partner, joseph lucani. It's been a pleasure and if you want to get more of us, get more from these episodes, then come join us on the facebook group electricpreneur secrets so you can engage with us like guillaume and steve did today. Sounds great. Take care, all cheers.