Most Contractors Stay Broke Because They Don’t Know THIS

Most plumbing business owners don’t fail because they’re bad at plumbing… they fail because nobody taught them how money actually works in business.

In this episode of Trade Traction, Dennis sits down with Electra to break down the money mistakes keeping contractors stuck — from underpricing and cash flow chaos to why most owners are terrified to raise prices. They dive deep into Profit First, flat rate pricing, customer psychology, marketing spend, and the mindset shifts required to build a truly profitable service business.

If you’ve ever felt like you’re working harder but still not making enough money, this episode will hit hard.

TIMESTAMPS

00:00 – Intro & meeting Electra
02:00 – Why contractors avoid looking at numbers
05:34 – The biggest operational mistakes owners make
08:31 – Profit First & fixing cash flow problems
11:48 – Understanding your real numbers in business
15:07 – Flat rate pricing & charging what you’re worth
18:27 – The truth about customer experience in plumbing
21:50 – What profitable companies do differently
25:00 – Why “singles and doubles” build profitable businesses
28:10 – Pricing mindset & why owners undercharge
31:36 – The servant mindset behind great tradespeople
34:43 – Educating customers the right way
38:05 – ServiceTitan, payroll & when to hire help
39:46 – Final thoughts on growing a profitable trade business

The Podcast that helps plumbing and heating service contractors stop working for free and actually turn a profit. 

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Transcript

SPEAKER_00 0:00

I say uh profit on paper is just math.

SPEAKER_01 0:03

The whole problem is we're not charging enough. That is the entire problem.

SPEAKER_00 0:06

You are morally obligated to be profitable.

SPEAKER_01 0:09

Plumbing's free until it's not.

SPEAKER_00 0:11

Oh, 100%. There's a massive self-esteem problem in the trades.

SPEAKER_01 0:15

Welcome back to Trade Traction, the podcast for plumbing contractors that are tired of working for free and ready to finally build a profitable business they once dreamed of. I'm your host, Dennis. And today we're talking about one of the most uncomfortable and most important topics in the trades: money. Because the truth is a lot of plumbing companies look successful on the outside, but behind the scenes, owners are stressed, underpaid, if paid at all, overworked, and wondering where all the money went. Today's guest is Electa, founder of Profit in Your Pocket Bookkeeping, where she helps plumbing, HV, and electrical companies finally understand their numbers, improve cash flow, and create real profitability in their business. Electa specializes in bookkeeping for the trades, works heavily with Service Titan and Profit First Systems, and has become known for helping contractors stop the financial bleeding and finally start paying themselves properly. In this episode, we unpack why most contractors are undercharging the hidden money mindset problems in the trades, how to know if your business is actually healthy, why being busy can actually hide financial problems and practical ways to start putting profit back into your pocket. This episode is packed with real talk, practical advice, and some serious perspective shifts for anybody running a plumbing company right now. So whether you're trying to make payroll, growing your team, or finally build a business that gives you freedom instead of stress, this one's for you. Let's get into it. Awesome. Electra, is it Electra? Electa.

SPEAKER_00 1:38

It's Electa.

SPEAKER_01 1:39

Electa. We all know Electra from back in the day.

SPEAKER_00 1:44

We do, yeah.

SPEAKER_01 1:45

Yeah. Electra. Sorry.

SPEAKER_00 1:48

No, you're fine. Happens all the time.

SPEAKER_01 1:52

Yeah. Electa. Thank you for being on the show. I'm so looking forward to our conversation about money.

SPEAKER_00 1:59

Oh, absolutely. Dennis, thank you so much for having me. This is fun.

SPEAKER_01 2:03

Absolutely. So we just we just kind of met uh just a couple weeks ago.

SPEAKER_00 2:08

We really did, but I've known about you for a few years now through the the plumbing grapevine, so to speak. So I've been excited to see you uh spinning out like new trainings and stuff like that.

SPEAKER_01 2:23

Awesome. Yeah, I take it a couple years off after selling my company, and and um I just kept running into people that are really struggling in business. Always I did that too for a long time, right? For sure.

SPEAKER_00 2:37

Yeah, we've all been there. I think that's why we're out helping people now.

SPEAKER_01 2:41

Exactly. And it's so fun, right? Now, once once you figure out the recipe, it's like, let me give you the recipe, just follow the recipe.

SPEAKER_00 2:47

I know. I tell people, let's skip the line. Like, I we have solutions. We don't have to go through the trouble.

SPEAKER_01 2:54

So yeah, yeah. You know what something hit me the other day? I think it was on the airplane. Um, literally, as especially in the plumbing trade, like we come up as an apprentice and we have a mentor that teaches us how to do everything, what tools to buy, shortcuts, tricks of the trade. And then for some reason, when we go off on bus in business, we think we have to figure it out all out by ourselves.

SPEAKER_00 3:22

And that funny.

SPEAKER_01 3:24

Isn't that true? It takes a number of years to figure out, wait a second, I need a mentor.

SPEAKER_00 3:28

It is so true though. Why is that? Do you have any idea why?

SPEAKER_01 3:33

I part a part, this is a premise I have, but I think a lot of people start business the wrong way. And what I mean by that is they got fired. Oh they start, or or they didn't get a raise, and so then they start their business, and oh yeah, they kind of start the wrong way, and so it's uncomfortable to talk to other contractors because you don't know what's being said. So I see that a lot. I've only had in 25 years of contracting, I've only had two people quit the right way, you know, where they they took me out to dinner and said, Hey, thanks so much, but we're moving on and I'm gonna start a business.

SPEAKER_00 4:12

I mean, it's true, those trades. The trades are just kind of rough and tumble, and it takes a certain personality to be in it. So I can see that.

SPEAKER_01 4:22

Yeah, but we all came from, you know, we were we were there once before, so we get it, and some people want to do their own thing, and and um so it takes, I think it takes some contractors a while to realize that it's okay not to know everything and to ask for help, and then and then you kind of open up to yourself to this whole market of people like you and me that are trying to help contractors do well.

SPEAKER_00 4:46

Right. I find that people are so terrified to talk with me, and I'm like, I'm not intimidating, I'm five foot four, I sound like Minnie Mouse, I know that. So, but it is very revealing to see the financials and like um it's incredible because when I first started doing bookkeeping, it was Ellen Rohr who taught me how to do it. And um I didn't really understand like some of the points she was making in the beginning, and now I'm like, oh, I can diagnose a business, you know, in minutes, you know, and you can you can see the operations challenges, you can see the sales and all of that. So that I understand why people don't want to open up the financials, but I it's they're so powerful though.

SPEAKER_01 5:39

Yeah, well, when you do when you do, that's where you start to get help, right?

SPEAKER_00 5:44

Right. Right, because we talk about raising prices or just monitoring that average ticket with your technicians, all of those things. Marketing spend, holy cow, could go talk about marketing spend for years.

SPEAKER_01 5:58

So I just talked to a guy this morning, he doubled his marketing spend. And it's like, oh no, I'm not sure that was the right thing to do. I we all want more calls. Yeah. We all want more calls, but like, are we doing what we can with the calls we already have?

SPEAKER_00 6:16

Right. And like who are you competing against when you you know double your marketing budget? Like, I'm okay with people increasing the marketing budget if they're doing it a smart way, picking the right vehicle.

SPEAKER_01 6:28

Right. Right. So you you work on the books then?

SPEAKER_00 6:33

I work on the books. So my team loves Service Titan specifically for a client CRM. So um I'm a blue-collar bookkeeper working with HVAC plumbing and electrical, specializing in service tighten software usage. Um, and we're having a ball. And I, oh my gosh, I love Service Titan almost more than I like QuickBooks.

SPEAKER_01 6:58

Really? It's a huge program.

SPEAKER_00 7:02

It's a huge program, and that dashboard is doing all the heavy lifting, you know, and it's just while you're doing your operations, um, it's not additional work, it's like supporting your team. So I I think it's the coolest software ever.

SPEAKER_01 7:19

Yeah. Awesome. So let's get into that. So yeah. The reason I we jumped on quick is because we discovered that we have a similar we're fans of a similar concept.

SPEAKER_00 7:31

We are fans of a similar concept. Yes.

SPEAKER_01 7:36

Profit first.

SPEAKER_00 7:37

This is a game changer. I don't know how you feel about it, Dennis.

SPEAKER_01 7:42

Well, to be honest, I'm not good at paying myself first. So it is work for me, but what I loved about when we discovered it, like it actually is like we've a lot of us have heard of the richest man of Babylon, which is a money saving. And that was pay yourself first too. A part of everything you earn is yours to keep. And it's kind of like that apprenticeship plumber part. It's like, well, if that's true as wages, why wouldn't it be true for profit? Right? A part of everything you earn is yours to keep.

SPEAKER_00 8:17

Well, and here's the thing I find with, you know, especially new business owners, is they don't factor themselves into the sale or factor themselves into their pricing. And they're so good about calculating, okay, okay, materials is going to cost me this much, subcontractors are gonna cost me this much, and then they spit out a price, but they forget about paying themselves or taxes or insurance. So I love profit first for encouraging owners comp to be a line item.

SPEAKER_01 8:52

When I do, I so I did a one-man truck exercise with with all my plumbers to start with, but eventually every single person in the company, every every new person went through that with me.

SPEAKER_00 9:03

Yeah.

SPEAKER_01 9:04

And it was probably 90% of the time, people would put all the costs up on the board. That's what we do. How much does it cost?

SPEAKER_00 9:10

Yeah.

SPEAKER_01 9:11

And like, well, what about you? And they say, well, I get what's left. And it's like, well, if all our numbers are true, then there's nothing left. And even if there's a profit, if you take the profit, then you got nothing left in the bank.

SPEAKER_00 9:26

Mm-hmm.

SPEAKER_01 9:27

So yeah, you're right. People miss that all the time.

SPEAKER_00 9:29

Oh, for sure. And I say uh profit on paper is just math, but like profit in your pocket takes a plan. So because you know, because you can have a profit and loss for the end of the year, and your CPA says, Congratulations, you made X dollars, and you're like, Where? You know, I didn't.

SPEAKER_01 9:52

That is so freaky. Yeah. That happens all the time.

SPEAKER_00 9:56

Yeah.

SPEAKER_01 9:57

So what's so people that haven't heard Profit First, in your in your words, what is what is the Profit First concept? Like, what's so revolutionary about it?

SPEAKER_00 10:06

I love Profit First because it's basically a hack for the human brain. Because accounting is spreadsheets and math, and the human brain naturally doesn't exist to function that way. And um, and as a bookkeeper, I implement this right away with my new clients because I've got to stop the bleeding as far as cash flow is concerned. So it slows down the flow of the money a little bit, it makes people more cognizant of their spending. And um, if nothing else, we've got proof that we have to raise prices because we can't cover our expenses. So I love profit first.

SPEAKER_01 10:47

You said everything I agree on, exactly. Yeah. Yeah.

SPEAKER_00 10:51

So, but once you start seeing an account for profit and you know that's yours, like all of a sudden, like it clicks in my clients' brains. And so um, I actually had clients who just took their first five-figure profit distribution last quarter. They're doing fantastic. And these are two business, they're a it's a partnership, so they each got five figures to take home.

SPEAKER_01 11:16

Wow. Right. That feels so good when yet finally happens.

SPEAKER_00 11:24

And like they didn't even have any plans for it, they didn't know what to do with it. Like, can you imagine?

SPEAKER_01 11:30

And that's just one quarter.

SPEAKER_00 11:31

That's just one quarter.

SPEAKER_01 11:33

Yeah. So I so when we interview when we discovered profit first, I actually can't remember exactly how it happened, but what we did is we didn't um like in the book it talks about like if you want to be double digit, like 10%. It was like most people can't fathom taking 10% out first, and so we suggest one percent, right? Just start with one percent. We started with our service partners. We had a service partner program, and so we had a monthly come in, and so we started by just saving that. We didn't have a percentage, but let's just not spend our service partner money.

SPEAKER_00 12:11

For sure.

SPEAKER_01 12:12

And what was really cool is um when things got tight, my partner Kimberly, she'd say, Dennis, we need to sell $18 more thousand dollars by Friday, or I'm gonna have to dip into our savings. Well, that really woke me up. It's different than I just need you to do more or do better or work harder or work longer. It was if you don't figure something out, I'm gonna have to take money out of spending. And you can see that there's eleven thousand dollars in that account or whatever number, right? So it really peaked the it uh kind of woke up a part of the brain, like you say, to well either have to sell more or spend less so I don't rob my profit.

SPEAKER_00 12:59

Right. No, a hundred percent. And you know, when you think about it, the thought would be like, okay, I need to sell more, I'm not doing enough, I need to work harder. Like, those are all self-esteem issues. But like when you look at it the money way, you're just like, oh, I just need to go sell $18,000 more. So it's like I'm gonna close, call those bids that didn't close right away. Or, you know, like there's there's certain levers you can pull once you know that number, as opposed to just, I just gotta work harder or I'm not doing enough or nothing's working. It kind of can take the spiral out of it.

SPEAKER_01 13:36

Right. So do you do so? What do you do with the clients when you work with a client? Like what what are the first steps in implementing profit, the profit first concept in a company?

SPEAKER_00 13:46

Um opening the bank accounts. And if they want to start slow, we start slow. Um, as you know, Dennis, a lot of like companies with employees, especially, we open up a payroll account. Because I'll tell you, everybody's so good at hiring, and then they're not good about raising prices. So I I try and get that payroll ratio in relation to the sales. So that's our first, that's usually where I start. Um, if they don't have employees, then we start with an owner's pay and we focus on owner's pay.

unknown 14:20

Okay.

SPEAKER_01 14:21

So do you like what like what would that look like? Would that look like if we want 25%, if we want a labor field labor to be 25%, would you just take 25% out and put it in an account? Is that what you mean?

SPEAKER_00 14:32

Yeah. 25% of every deposit's gonna go into that payroll account. And if it doesn't make it, then we've got something going on. Like it's either sales or it's pricing, or it's both. So um that's so I use that as like a trigger.

SPEAKER_01 14:52

A wake up an alarm clock.

SPEAKER_00 14:58

Taking out one percent profit.

SPEAKER_01 15:00

Yes.

SPEAKER_00 15:01

Because taking out one percent profit's not gonna fix an underpricing problem.

SPEAKER_01 15:05

Right. What I do with that the other thing, so when you first started out, what I liked was like so far, every client I've talked to is severely underpriced. Like immediately. You're just like, oh no. So then they they can't even imagine increasing, you know, paying themselves first. And so, like, like with in a line with this book, he says one percent. So then what I do at the same time is I say, Well, increase your price one percent at the same time. And so then actually, it's not costing you anything, right? Like, if you increase your price one percent and pay yourself one percent, then everything should be the same as last week, right? Right, and then but like when during COVID, remember when inflation was so crazy, especially with parts, we got to the point where we were like, update your price book every service meeting, every week, update your price book because things were changing. And man, I don't know if I think that's still a good idea.

SPEAKER_00 16:06

Oh, for sure. Um, I don't think weekly anymore isn't necessary. I I mean it depends on your industry.

SPEAKER_01 16:14

Exactly.

SPEAKER_00 16:14

Well, especially if like tariffs or whatever is impacting you. Sure. But um definitely just a regular cadence of like monthly, quarterly, twice a year. If you do it on a monthly cadence, it can be smaller and you don't feel it as much. So are you selling tax don't feel it as much? So it really just depends on your style.

SPEAKER_01 16:38

Yeah. So looking back, when we first went flat rate, this is just kind of hit me. I was, you know, I'm always trying to figure out how to communicate these things to people better. When we first went flat rate, you know, this is 20 years ago. I think our first price was like four four something. And we didn't have the guts to do it, and I think so we our first published flat rate buildable hour was 286.

SPEAKER_00 17:05

Oh wow, we were ahead of the time.

SPEAKER_01 17:08

Well, but uh but the price should have been 400 and something based on our calculation, right? But we were scared because we're going from $100 an hour, right? Uh uh we were $100 an hour, uh, you know, time and material. So to jump to $400 a build hour, which is basically $200 an hour, right? Um was scary. So we did $286, and then we wondered why it didn't make a difference. And looking back, now I know it's like, well, because I there wasn't enough money, we weren't still not collecting enough money to make anything work. So even though we uh increased our prices, it wasn't enough to even feel a difference.

SPEAKER_00 17:50

Exactly. And Ellen Rohr will tell you that to like just triple or quadruple your price is handing you a loaded gun, especially if you don't have the sales skills to back it up.

SPEAKER_01 18:05

Yes.

SPEAKER_00 18:06

So you do want to make sure that you've got the right tools in your technician's toolbox as far as selling is concerned to make sure they could sell it.

SPEAKER_01 18:16

Yeah, and a client base too, right? Like you can't just all of a sudden have a Yelp client base or a cheap client base is looking for the cheapest and then all of a sudden charge a different price.

SPEAKER_00 18:28

That's a really good point, too. Absolutely. And but I do like to remind my clients that I'm like as far as selling is concerned, the bar is so incredibly low. Like I'm I'm my client's ideal client. I am in my 40s, I'm a homeowner, I have an income, and um, I don't have time to really mess around and get 17 different quotes. So um I just like just text me before you show up. Be kind when you knock on the door and give me my options and let me make the choice.

SPEAKER_01 19:07

Isn't that isn't that interesting? It is, it is now one thing I hear all us everybody's saying that well, the ever all the customers say the price is too high. And well, what else are they gonna say? Like they don't know if you think about it, plumbing's free until it's not, right? We push the button and we pull the lever and we we turn it and it gets hot, and we have a water bill that's uh not very much really.

SPEAKER_00 19:32

Well, yeah.

SPEAKER_01 19:33

Yeah, and it's so what plumbing's free until it breaks, then all of a sudden it's expensive. It was never in the budget. They can't tell us that we're promoting the wrong brand or we're gonna do it not to code. They don't know any of that. So the only thing they can say is that's expensive.

SPEAKER_00 19:47

Right. Well, and they don't have any exposure. You might be their first plumber they've ever met.

SPEAKER_01 19:53

Right. They've heard the stories, but now it's coming true.

SPEAKER_00 19:59

Right, exactly. So, I mean, as long as you're providing a good client experience, as long as you're, you know, kind and cognizant of my home and I feel safe with you, like that's where the bar is. Not a super high bar. Like, I think a lot of plumbing companies, HVAC companies are trying to reinvent the wheel right now as far as client experience is concerned. And that's you don't have to, I promise.

SPEAKER_01 20:26

Yeah, it's really simple, isn't it?

SPEAKER_00 20:29

Really is.

SPEAKER_01 20:30

I I so I tell a lot of all my clients, I say, go be a customer and go get five or six estimates on something on gutters, windows, roof.

SPEAKER_00 20:39

Whatever. Yeah.

SPEAKER_01 20:41

It's first of all, you're exhausted by the time you get six appointments set. And then and then the day when that happens, like on a slow day, do it. It's exhausting. And then you're by the end of it, you're totally confused.

SPEAKER_00 20:53

Oh, a hundred percent. Like you forget who who you talk to. Um, honestly, it's gonna be a miracle to get five or six appointments set.

SPEAKER_01 21:02

Yes. Isn't that weird?

SPEAKER_00 21:07

Yeah.

SPEAKER_01 21:08

So what else financially, what what hints can we give? So most what I'm discovering is most companies aren't doing well. Like they like 80% of companies are probably the truck might look great. They might even be driving nice trucks, but the smiles are kind of fake. Like there's stress behind them, right? And and the reason for that is we don't want to tell our employees their true condition of our business.

SPEAKER_00 21:39

Well, and some people don't even know.

SPEAKER_01 21:43

Yes. I mean, I've got So maybe they don't know. That's a great point. Maybe they don't even know how bad it is.

SPEAKER_00 21:48

I've got a couple in particular that are blissfully unaware. Oh my goodness. So and I'm like, Yeah, I can see it. Um everybody else can see it, but they don't. So that's That's that's the hard part. But um, but no, healthy companies have got the owners on the payroll. Healthy companies are taking a profit distribution, even if it's 1%. Um, healthy companies have got money left over at the end of the month. Like those are those are kind of what we're looking for.

SPEAKER_01 22:22

And so and are they paying their wife?

SPEAKER_00 22:26

I hope so.

SPEAKER_01 22:28

How many times does that happen where they wrote they wrote the girlfriend or whatever to do the books and they're not getting paid?

SPEAKER_00 22:38

That's where I am at. Yeah, absolutely. You should at least be paying them like what you, you know, maybe a office manager would cost you or a bookkeeper would cost you, so that you can get that in your budget and you can see that in real time. So yeah. No, nobody works for free unless they really, really want to, you know. So maybe your grandmother's retired and wants to come. I don't. That's fine.

SPEAKER_01 23:05

Yeah. So um I remember it was a long time before in business, before we actually took a quarterly, but that was so fun. Like just you telling me that story reminds me of those times when we'd sit down in the office and say, holy cow, we can take a distribution, or we probably should take a distribution.

SPEAKER_00 23:26

Right?

SPEAKER_01 23:27

That is so fun. It feels it feel it feels good. It feels like, oh, all this hard work is worth it finally.

SPEAKER_00 23:39

The conversations are just different when I've got clients who are profitable versus the ones who aren't. And like, I would much rather have those profitable conversations, be like, what are we gonna do with it? You know, are we gonna pay off a truck? Are we gonna buy a building? Like, what are we gonna do? Like, those are much more fun calls to have with a CPA than hey, don't file our taxes because we can't pay the tax bill anyway.

SPEAKER_01 24:06

Yes. I was once told you guys are basically bankrupt, you're just too stubborn to admit it.

SPEAKER_00 24:13

Oh wow. You had someone who was very blunt.

SPEAKER_01 24:17

Yeah, maybe so, but I am too stubborn to admit it and I'm gonna figure it out, right?

SPEAKER_00 24:21

And you did.

SPEAKER_01 24:23

I did, yeah.

unknown 24:24

Yeah.

SPEAKER_01 24:25

Ellen Rohr, actually, Ellen Rohr helped us tremendously. Just kudos to Ellen Rohr.

SPEAKER_00 24:31

I love it.

SPEAKER_01 24:34

I'll tell you just the first thing, because this will be helpful for contractors, is we couldn't figure out why we weren't profitable. We were doing a lot of things, we were doing so many things right. And she said split up big jobs and little jobs. Oh, and big job being more than one man, more than one day, and split those up and then do profit and loss with it. And Kimberly went to work on that, and within one day, she calls me and she's like, I think I found our problem. Well, Ellen already knew what the problem was, and then Kimley was so excited, she went through and did the whole clearback to the beginning of the year, and on paper, we were losing money on our big jobs because we were matching bids. We had a couple guys matching bids to get to work, and that felt really good to get to work because it helped us make payroll, right? A big half down payment, a really half-down payment was like, Thank you so much for selling that sewer, we can make payroll for sure.

SPEAKER_00 25:34

But what we didn't realize then the vendor uh invoice shows up, and you're like, crap.

SPEAKER_01 25:40

Exactly. But we couldn't see it because our books were together. So when we separated it, then we could see it. So then we made an adjustment to our how we paid and how we bid big jobs, and literally within a week or two, we noticed a difference. A tremendous difference, actually.

SPEAKER_00 26:00

That's really cool. I'm so glad you felt you felt such a quick turnaround or saw such a quick turn.

SPEAKER_01 26:06

Yeah, well, if what happened to us, it's like when you do a big job that actually affects payroll, like you're like, thank you so much for selling the job. All of a sudden you got three or four guys over there and a bunch of tractors and whatever or whatever, all this commotion, but you're but you're stuck doing non-profit, you have all that, all those people stuck doing unprofitable work, so you can't take the profitable service calls. Right?

SPEAKER_00 26:31

I've known Ellen for about 10 years now, and so I love her to pieces, and I think I've got pretty much everything she's ever gonna say memorized. But she says she hates a home run. So those install calls, she hates a home run. She wants your singles and your doubles to make the business work. So she wants those lower those smaller calls should be your bread and butter. Should be wildly profitable on those.

SPEAKER_01 27:00

Yes. Well, because then a single and a double can turn into a double or a triple, right? You can always steal the next base, get to the next base. And then when the home runs do come, it just drives everybody, it drives everybody home, right? So it works.

SPEAKER_00 27:16

I should be like your cherry on top of that Sunday, you know, so to speak. So yeah, but it's like those big jobs are so tempting, that big hundred thousand dollar overhaul, and eventually you lose your shirt on it because everything just keeps adding up over time. So, yeah.

SPEAKER_01 27:36

For sure. What other so what other tips, what's helpful to a new contract, a contract that's struggling? What do you first look at and do? Like what are some honestly?

SPEAKER_00 27:46

Just raise your prices. You've got nothing to lose. If you're already struggling, raise your prices already.

SPEAKER_01 27:53

That's a good point. You got nothing to lose. You're already struggling.

SPEAKER_00 27:57

You're already struggling, so might as well go down swinging.

SPEAKER_01 28:02

This is so there's this thing. Tell me about I'd love to hear your viewpoint on this. Like, I think I put a couple posts out last week about honesty. Like, there's plumbers want to be on tradespeople want to be honest. They don't want to be a ripoff. And so there's this thing that we somehow to be honest, we have to be cheap. And we gotta break that because it acts it's honestly costs more money to do this kind of work.

SPEAKER_00 28:31

Honestly, I think it's a self-esteem issue and it's a money mindset issue.

SPEAKER_01 28:36

Okay, tell me more.

SPEAKER_00 28:38

I'm not worth a six-figure salary every year. Like if you genuinely think a plumber shouldn't make six figures a year, you're not gonna charge for it. Or if you think money is a necessary evil, you're probably gonna be as cheap as you possibly can. You don't want to take advantage of anyone. But as far as like being a member of the community, you are what I consider to be morally obligated to be profitable.

SPEAKER_01 29:10

Yes. Well, I I had the saying that whoever has the plumber has the market. So you have to, if plumbers are rare, then and the good ones are more expensive, then we got to figure out how to afford to attract and keep good plumbers. So then forces this. I was thinking back when I first actually the reason we went flat rate is I was teaching my timing material guys some sales and they were starting to get good at it, but I didn't have the money to pay them more. And so that's why it's like I gotta figure out how to pay my guys better or they're gonna go somewhere else. And so flat rate was the only way to do that, right?

SPEAKER_00 29:51

Yeah. So yeah, I feel like the pricing comes from a money mindset thing more than anything, less of a math thing. And it's just they don't think they should be able to make that much money. And it's just like, well, in reality, you're really not, because all of your expenses. And so by the time you get paid, you're making $25,000 a year instead of $100,000.

SPEAKER_01 30:12

That's interesting because we have this big, there's this big ego thing in the trade. Like we are really proud of how hard we work and how much we know and our tools. But you're saying somehow we still don't think we're worth it.

SPEAKER_00 30:31

I don't think so. I think I think the ego and the bravado shows up between like trades to trades and not necessarily trades to clients.

SPEAKER_01 30:42

Oh, interesting.

SPEAKER_00 30:44

Yeah. That's that's what I've observed, but I feel like I'm I'm kind of an outsider looking in because I'm not in the trades. I've I'm married to the trades, I serve the trades.

SPEAKER_01 30:54

But wow, that is something to think about right there.

SPEAKER_00 31:02

I'm so sorry that was my dog.

SPEAKER_01 31:06

Okay, no big deal.

SPEAKER_00 31:08

It's my pest control. Um, that's what I see. And like just because you wear work boots and jeans to work and you're knocking on some wealthy person's door doesn't mean that you're not worth every dollar of $500 an hour.

SPEAKER_01 31:25

Fascinating. This is this is that gives me a lot to think about. Um yeah, well, and the customer, I think it's such a personal. We're in someone's home and they're saying, Are you kidding me? It costs that much money, and we take it personal. Right? It's a personal con. The customer's looking at us in the eye. They're not saying that car is too expensive, they're kind of saying you're too expensive. Right?

SPEAKER_00 31:53

Yeah.

SPEAKER_01 31:56

But um, wow, interesting. So we have to work on our self-esteem.

SPEAKER_00 32:00

Oh, 100%. There's a massive self-esteem problem in the trades for sure. And you guys are the nicest, cutest, sweetest, smartest guys on the planet. So, yeah, a self-esteem issue in the trades.

SPEAKER_01 32:17

Well, so to piggyback on what you said, I was at a uh conference a couple years ago, and at the end of the week, it was a plumbing conference, and I think it was PHC C Connect to be exact. And at the end of the show, like I was talking, I was we I was at the bar, um, and the the bartender says, by the way, what is this convention? And you go, Oh, we're plumbers, we're plumbers, and she's like, This has been the nicest group of people. Like, I would never, she's like, this has been, you guys have been so nice and so kind. People tip well, people are nice, they're not pretentious, they're easy customers. And I was like, wow, I had not, I did not expect that. And we kind of talked about it, and I'm like, well, maybe it's because we're, you know, we're in and out of homes a lot, right? And we're we're kind of helping other people in their situation, and so we have this big bravado amongst ourselves, but we do know how to be a guest in someone's home. Most of us do.

SPEAKER_00 33:24

To be a guest in someone's home, and you also have a serve at heart. You guys are just caretakers at the end, at the end of the day. You guys are just caretakers. I mean, it doesn't look like you know, like preparing food or you know, taking care of someone, but like you are taking care of people and the fact you're keeping people healthy, right? Or you're keeping them safe.

SPEAKER_01 33:46

Right.

SPEAKER_00 33:47

So, and you just want the best for people.

SPEAKER_01 33:50

Absolutely. I I did notice, I figured out one thing I think about is that when it's slow, the guys get depressed really fast. And I think that's because we get our dopamine hits by helping people and fixing stuff, right? Yeah, so we don't there's nothing to fix or nobody to help, we get depressed really fast.

SPEAKER_00 34:10

Right. Well, and that's when you guys start looking at money, and that's when you guys start spiraling into I've broken everything, I'm not doing anything right. And so I think busy, like you just said, you get that dopamine hit, but also sometimes when you're really busy, you're just happy to be busy and you're still not making money.

SPEAKER_01 34:31

Yeah, that that dopamine hit covers the reality that we're not charging enough money.

SPEAKER_00 34:36

Yeah, because you're busy, there's work to do, there's things to be done.

SPEAKER_01 34:40

We're talking about you know, it just hit me, I don't know how it just hit me really clear. The whole problem is we're not charging enough. That is the entire problem.

SPEAKER_00 34:51

That's literally the entire problem.

SPEAKER_01 34:53

It's entirely the whole problem. Like if you're having struggling in business, it's because you're not charging enough.

SPEAKER_00 35:00

I mean what could go wrong charging more?

SPEAKER_01 35:06

We and well, the trick is so now we have to figure out how to be worth it. So we have to wear a clean uniform and have a nice truck and show up on time and call when we're late.

SPEAKER_00 35:16

Yeah, but those are low dollar investments, right? Call in if you're late cost you.

SPEAKER_01 35:22

Right. And I say that because so many times we put off calling when we're late, and then the customer's so offended, like, don't you have a cell phone? Yes.

SPEAKER_00 35:34

That means I can run and get lunch and come back, you know.

SPEAKER_01 35:37

Right. Right. Very interesting. So the whole problem is we're not charging enough. It's that simple.

SPEAKER_00 35:46

It's that simple. And then you can work less and make the same, if not more, money.

SPEAKER_01 35:53

Yes. And so so there is so there's more to it than that in that you have to learn how to present your prices. You can't just flop out some big number. So you have to learn to present well, you have to give people options that they might appreciate. Like you can't sell a Ferrari to someone that's not interested in a Ferrari. Yeah. So you have to sell the appropriate thing to the customer that whatever they might appreciate and value.

SPEAKER_00 36:21

Right.

SPEAKER_01 36:22

Um, give them some options and let them buy from you.

SPEAKER_00 36:25

Well, and I tell people, you know, I'm pretty well educated. My husband's really handy, but I still don't know that a single thing about plumbing, really. Like, I I know where your prices need to be, but like I don't know like what cool options I have available to me or what's gonna be the best route for me and my family. So you really do have to educate your clients.

SPEAKER_01 36:48

Yes. And they kind of expect that you're telling the truth.

SPEAKER_00 36:55

Oh, for sure.

SPEAKER_01 36:56

Right? So we should be telling the truth, but they're gonna believe what we say, and then that's why it's important to know what we're talking about.

SPEAKER_00 37:05

Oh yeah.

SPEAKER_01 37:06

Right? Yeah, so that's it. That's we figured out the whole problem in the trades. We just need to charge more. Awesome.

SPEAKER_00 37:21

Easy topics.

SPEAKER_01 37:23

My goodness sakes, that's awesome. Okay, and and um people are glad to. I guess uh maybe one other thing as far as selling more is uh looking back on my life, I wish people had been more direct with me about what I should spend my money on. Like, I tell this story because it's so real in my life, but we kind of put up with this crummy driveway for a long time. And so now we're gonna sell our house a year from now when my kid graduates high school. So now we got a new driveway, and it's awesome. But I'm only gonna enjoy it for a few months. And I should have fixed it 20 years ago and enjoyed it and skipped a few trips to McDonald's or whatever it costs and payments or whatever.

SPEAKER_00 38:14

Sure. Yeah, it's like had I known, I would have done, I would have upgraded.

SPEAKER_01 38:19

Yeah, I would have spent more money on my house. Yeah. So I think we need to be more bold as tradespeople. We need we see stuff that's wrong in the house, but we're sometimes we're scared thinking that people don't aren't gonna want to do it or don't have the money to do it. I guess that's the other thing is people have money. Like surprisingly, um, people if they own a home, they probably have a way to get the money they need to fix their house.

SPEAKER_00 38:45

Well, and if they own a home, it's probably their biggest asset.

SPEAKER_01 38:49

Yes.

SPEAKER_00 38:50

Most likely their biggest asset. So you're helping them protect their investment down the down the line. So very cool.

SPEAKER_01 39:01

So any any other hints about bookkeeping or other hints.

SPEAKER_00 39:06

Get out of desktop immediately. Get away from it.

SPEAKER_01 39:11

Tell me more.

SPEAKER_00 39:12

Tell you more. QuickBooks Online has just come so far these last few years, even since I've been working in it. And there's all these incredible apps and really cool tools that they're selling to all the trades now. And QuickBooks will talk with most of them. QuickBooks Online will talk with most of them. So if you want those really cool tools and insights and support for your business, get into QuickBooks Online because desktop's not going to give you that same experience. Um, as far as the CRM's concerned, you and I probably both agree that hands down, Service Titan is where it's at.

SPEAKER_01 39:51

Yes.

SPEAKER_00 39:52

It's worth money.

SPEAKER_01 39:55

For sure. Maybe what's so if you gotta if you got a one-man shop, when does he do when does he have someone else do payroll? When does he get an account? How what are those steps, do you think, as far as getting help with that stuff?

SPEAKER_00 40:08

Uh, one man shop. Well, one man shop, you can just pay yourself whatever you can pay yourself. Um, that's not too big of a deal, but definitely when you hire someone, you should probably bring someone to at least help you set up payroll. Running payroll doesn't take very much, but you want the right person to set up payroll for you.

SPEAKER_01 40:29

Okay. And then when does someone get what now, just for people that don't understand, what's the difference between payroll and what you do? And then when do you get involved?

SPEAKER_00 40:38

So payroll is um basically how you facilitate getting payment to your team members and withholding taxes and making sure those taxes get paid to the state and the other reporting agencies you report to. So um that would be just payroll, and that's a pretty simple function. Um, bookkeeping you should have regardless of whether you have an employee or not. So I do bookkeeping where we're recording money in, we're recording money out, you're getting financial reports to give your CPA so you can file your taxes. So um, so that's kind of the difference.

SPEAKER_01 41:17

Um prices are and how do you get paid six gigs?

SPEAKER_00 41:26

Yeah, you have to. That's like the new break-even anymore for most Americans.

SPEAKER_01 41:32

So yeah. Awesome. Electra, thank you so much for this. This has been super impactful. I think we uncovered all the problems in the trade in a 30-minute conversation.

SPEAKER_00 41:45

Yeah.

SPEAKER_01 41:46

Just raise your prices. Awesome. Absolutely. And how do people get a hold of you? What's the best way to get a hold of you?

SPEAKER_00 41:54

Please go to my website, pipbookkeeping.com, and book a free consultation.

SPEAKER_01 42:01

Awesome. All right, we'll see you around the corner. That was an awesome conversation with Alecta from Profit in Your Pocket Bookkeeping. If you're a plumbing HVC or electrical contractor who feels like the money is disappearing faster than it's coming in, Alecta and her team help contractors understand the numbers, improve cash flow, and build businesses that are actually profitable, not just busy. You can learn more or book a consultation with Alecta at PIY Bookkeeping.com. Profitinyourpocketbookkeeping.com. And if today's episode helped you, challenged your thinking, or gave you something practical you could apply in your business right away, make sure you subscribe to Trade Traction, leave a review, share this episode with another contractor who needs to hear it. Because this podcast exists for plumbing contractors that are tired of working for free and ready to finally build the business they once dreamed of. Thanks for listening, and we'll see you on the next episode.