What Building an Electrical Business Taught Me

In This Episode

• Intro

  What does it actually take to build a profitable trade business from the ground up, and what separates the owners who make it from the ones who don't? In this episode, John's wife Rebecca turns the tables and asks the questions she's been sitting on for years. From why John took the business seriously in the first place, to the mistakes he made managing a management team, to how he learned to face hard conversations head-on, this is one of the most honest conversations on the podcast. If you're a trade business owner trying to figure out what the next level actually looks like, and what it costs to get there, this one is for you.

• Why John Grout Started Taking His Trade Business Seriously

  John: Good day and welcome to Tradie Business School. Today I'm sitting here with my wife Rebecca. One of the reasons Bec's come in is because she saw me building my electrical business and she's always got some really interesting questions that people like to hear the answers to, that I can't sort of prompt myself. Bec's also helping me, or we are working together in Serve to build the coaching business. So over to you, Bec.

  Rebecca: So, hi, I'm Bec, and yeah, we now work together. So I thought it might be quite interesting to shift the tables a little bit and get some information out of you. Well, I suppose let's start with the first things first with your origin story. So what was it, I suppose, when was it and why did you start building the business?

  John: I think there's probably two stages to that. The first stage is I just had a natural inclination to go into business. I don't really know where it came from, but I just always thought I'd end up in business for myself. So I did. But I never took it seriously until Sophie was born.

  Rebecca: And how old were you then?

  John: I think I would've been 31. And so when Sophie, my eldest daughter was born, she was pretty unwell when she was born. And then when I was sort of holding her in that little humidity crib thing, I realized, shit, I've actually gotta support this little thing now. So life got pretty serious, I think, and I realized that I couldn't just mess around anymore. So after Soph was born, after that first day, like a little switch flicked inside my head. And everything changed.

  Rebecca: And then what, what changed? What did you do differently in that day?

  John: Well, my attitude changed because my outlook on life changed because I actually needed to provide for somebody. So the only thing I can say is it got serious. And I just realized that I had to go and build a business and I wanted to provide a good life for my new daughter. And that meant making money.

  Rebecca: Were you making money before?

  John: Yeah, but not much. Just enough to sort of get by. I always had ambition, but the birth of Sophie really kicked me into gear because I don't think it was about me anymore. It was about providing for someone else, another little human that needed me.

  Rebecca: And she's still a little human and she still needs you a lot.

  John: Well, she's nearly 18, but,

  Rebecca: Well, she's still tiny though. Yeah. Okay. Well, with trade businesses, obviously they can typically be quite difficult businesses to make a lot of money from. They require lots of costs, lots of stock and machinery. So what was it that you did differently that meant that you could build a profitable business, you could take money out of the business and you were able to sell?

• Personal Development and Mindset in Trade Business

  John: You know, it sounds like a difficult question, but it's a really easy question to answer. I decided that that's what I wanted. And so many people just don't decide that. Once you decide that that's what you wanted, it's not over. I remember I used to go to so many seminars. I'd read so many books. I'd do the affirmations that I heard about in the books. I was always listening. Back then I had a tape recorder in my car and I listened to Anthony Robbins tapes. And then it was CDs. Now people can just listen to Audible. So I believe your business is a direct result of your own personal growth. And too few people, especially trade business owners, put any time and effort into personal growth.

  Rebecca: And why do you think that is?

  John: I dunno. Maybe they're not aware or they don't think it's important or they can't be bothered, or they don't want what they want bad enough that they'll go and figure out what they need to do.

  Rebecca: Could it be that there's a lot of people in business who maybe just don't want to work for somebody else? There's a bit of a cohort there, but then you've got some business owners where they want to make money, but they might not realize that they need to learn more. Because I mean, a lot of tradesmen, it's a very physical thing, isn't it? So do you think that more academic side of things is a little bit intimidating, perhaps?

  John: Yeah. I don't know whether I'd call personal development academic. I think what you might be alluding to is the prospect of actually getting out of your trade clothes and putting on some street clothes and going to a seminar. And listening to some people talk about business might seem a little bit boring or not what a tradie would do. But if I think about all of the people that I know that have been very successful, they've all done that stuff. And you don't have to do it forever, but there's a period of time that you need to do it to get your head programmed right. I think some people have the natural programming where they don't need to read the books and go to the seminars, but that'd be like a small portion of people. I think also for me getting serious about business is when I got my business coach Steve, and Steve was a really good coach for me, but it also meant that every fortnight I was accountable to things.

• Discipline, Consistency, and Doing the Boring Work Every Day

  Rebecca: I think that's probably the difficult lesson that a lot of people either do or don't learn, where starting to work for yourself to being a business owner, there's a lot of discipline that's required. And actually something I've observed in you when you were building your electrical business, and it was in COVID when you were working from home, is the level of discipline that you have to do the boring shift. I was actually surprised, but I would see you lock in for like 4, 5, 6 hours. You wouldn't get a drink, you wouldn't go to the loo, you wouldn't get up until it was done. And I wonder where is it that you learned, or why is it that that discipline comes from for you to do that?

  John: If you know what you want and you're really passionate about achieving it, you will just do what needs to be done. And you won't like doing the task, but the motivation and the passion comes from moving closer towards your goal. And so I think sometimes people won't work hard enough because they don't know what they're working for.

  Rebecca: It's the consistent effort to do the boring shit. Day in, day out. It's like you were just grinding every day.

  John: Well, I think success in business though, a good business is generally a boring business. You figure out what works and you just repeat it every single day, day after day, after day after day. And that can seem boring and monotonous. And it would be if you weren't focused on a goal. Because when you're focused on a goal, the passion comes from achieving that, not from the task that you're doing. Does that make sense?

  Rebecca: Yeah. So, and obviously not even just trade business owners, but business owners in general, you've got shiny object syndrome. And a lot of the reason people are in business is because they have ideas, they have energy. And the second something starts working, they want to go and do something else. But with you, and what I learned from watching you work, is actually you have an extremely high tolerance to boredom and you have a very high tolerance to frustration as well.

• Focus: Follow One Course Until Successful

  John: I think what you mentioned before where people have a propensity to go for the shiny thing, I mean, I suffered from that early on in business and I was sitting down with a business mentor of mine and I was talking about all these business ideas I had and all these things I wanted to do. And he said, your problem is focus. And so I went and looked into that and FOCUS is an acronym for Follow One Course Until Successful. So I wrote that on a big A3 printout and I put that on my pinboard in my office, that's the only thing that was in it. Follow one course until successful. Because I needed to stop chasing the shiny things. Now you've gotta be careful, you don't wanna stifle your creativity. I think what a lot of business owners tend to do is they don't get their primary business to the place where they can actually now divert their energy somewhere else. And so you need to get that business to a point where it doesn't need you hardly at all before you start going and building a different business.

  Rebecca: Mm-hmm.

  John: Too many people that I talk to, they got their primary business sort of working, and then they'll go and do something else and their primary business falls off. Or even worse, there's a lot of people that are in business to create a lifestyle business.

  Rebecca: Passive income.

  John: Yeah. Passive income. And what they'll do is their business will start working. They'll be like, okay, great. So now I'm gonna go and live overseas. I'm only gonna come into the office on Tuesdays.

  Rebecca: Going away for six weeks.

  John: Yeah. Way too early. It takes most people five to 10 years to get to that point. And that's not five to 10 years of cruising in business. That's five to 10 years of really, really hard work.

• The Biggest Mistake John Made Managing a Management Team

  Rebecca: Okay. So obviously we've kind of talked about what you did well a little bit. We've talked about your focus, your unbelievable high tolerance to frustration and dealing with bullshit. Some of the things you didn't do as well. And this is what I think is interesting, having watched you work, but also having received feedback about you, because a lot of the feedback I get about you is that you're very calm, you are very cool and collected, but obviously I've seen you deal with incredible amounts of tension and stress. So underneath that cool, calm, collected exterior, what are some of the biggest mistakes or challenges that you've dealt with that, if you could do it again, you'd do it differently?

  John: I think the first thing that comes to mind was when I was building a management team. I was not a good manager of managers to begin with. And I was one of those bosses, and there's a lot of them out there, where I would have meetings with my management team set and something more important would come up, so I'd postpone it or I'd cancel it. There's some really bad people out there where they just won't show up and their team does.

  Rebecca: I've had people like that.

  John: Yeah, I'd never, I don't think I ever did that anyway, but I definitely was not good at that originally. And I got to the point, I remember I was coming back from an advisory board session in the tram on the way back to our place, and I realized that for me to get to where I wanted to get in business, it wasn't me that was gonna do the work. It was the managers that were gonna do the work, were gonna lead it, make most of it happen. So the most important thing I could do every week was meeting with them and the weekly meeting. And that's when I dove into looking at what a good meeting cadence looks like. And obviously I made a lot of mistakes, but I landed on something that worked very, very well. And it's something that I try and teach all my clients and it is a frustration of mine that they don't understand the importance of it. But maybe they need to go through what I went through before you realize how important it is.

  Rebecca: Do you think it's because some people just don't understand how hard it is to manage people, but then manage people well? Do you think they overestimate their ability to do it?

  John: Well, I think what it was for me is I didn't understand the importance of it. And so at that particular stage in business, there's a lot of important things to do. Like there's emails to get back to, there's clients to go and see, there's projects that aren't going well, there's deadlines to meet, and they always seemed more important for the business than the management meetings. But my priorities were reversed. And one of the reasons my priorities were reversed was because all of the things that I had done to get the business to that point was what I was still trying to do. But to get to the next level, I needed to change.

  Rebecca: So that's recognizing when to make the transition to the next level of leadership, where you've gotta let some things go. You have to delegate better. Obviously, delegation is a skill in and of itself because one of the biggest gripes we hear with business owners is that they do the work because they don't trust their team to do it. But their team can't do it because they haven't been trained and empowered and trusted to do it. So it creates this cycle that everyone gets stuck in and then you end up with a low performing management team because the owner isn't actually leading them to be high performers.

  John: Yeah.

  Rebecca: Okay. So someone who's in that situation now where either they're employing more tradespeople or they're employing more management team and they need to transition to a different part of leadership, how do they understand how to make that transition? What good and bad looks like? And you are allowed to say, get a business coach.

• When You Double Your Business, You Double Your Problems

  John: Yeah. It's a really tough question. I think it depends on the person. But what I remember in this process was I had decided that I was gonna double the business. So what I had done is I had built my business to a point where I had a management team in place, and I didn't need to work there. And so I was bored. I started to do foreign exchange trading, so I had something to do. Then I went to America for a holiday and I was in America for a month, somewhere in the Nevada desert. I decided that I wanted to double my business, so I came back with a serious goal and some drive and some passion. So I got together with my business coach and we were sitting down talking about things, and I started to put together a plan. And I remember I was at the front of my office in the car having a coaching session with Steve. And there was a lot of things going wrong, just a lot of issues. And I don't think my attitude was very good about it all. I think Steve was my business coach for 10 years and what he said at this point would've been worth every cent that I paid for the entire 10 years. Because I'm sitting there complaining about my issues and Steve said, John, what are you trying to do at the moment? And I said, well, you know, Steve, I'm doubling the business. He said, right. Do you think you might double your issues if you're doubling your business? I was like, yeah, okay. Alright. And so what I had to do was understand that the issues are there, the issues aren't important. What's important is how you treat the issues. How you handle the issues.

  Rebecca: And so maybe that goes back to what you were talking about before. Why you always seem to be calm is because you weren't focused on the issues. You were focused on how to solve them.

  John: So for people that are sort of stuck in that, I think for me, a business coach was great. I was also involved in business groups with other business owners. And quite often, just talking with other business owners, you can pick up one or two little things. I think where people go wrong is they're always looking for a big thing. But quite often the big things are the little things. Like if you have two ships and they start at the same point and one of them varies by one degree, over the course of a couple of weeks, that ship's gonna be in a different part of the world. So those little deviations over a long period of time is what's important.

  Rebecca: Well, that goes back to what you were saying about your meetings, doesn't it? Where for a lot of people, a five, 10 minute morning huddle, it's an imposition. It's an inconvenience. But actually, even after a week where you've had five morning huddles with your team, you could be one to five degrees pointing closer to where you're supposed to be.

  John: Yeah.

  Rebecca: So it is the small things that are the big things. And that kind of plays into another question I wanted to ask you. There is something that really annoys me actually, where your reluctance to have a victim mentality is exceptional. Like, you'll never, ever have woe is me, my life is so hard. Which sometimes annoys me when I'm trying to wallow. But what I have observed in you is you don't hide from problems. I've never even really seen you delay like I will procrastinate. When it comes to tackling difficult people, difficult clients, staff problems, whatever it is, you go in head first and you generally don't stop until it's solved. So help me and some of the people who are listening understand the process you went through to become like that, because most business owners, especially as they're growing, it's easy to avoid the hard stuff, but obviously the longer you avoid them, the worse things get. So how is it that you can just sit down with someone, look them in the eye and have a really difficult conversation with them?

• How to Have Difficult Conversations With Staff and Clients

  John: I don't really know what the answer is there, other than I probably didn't do it well in the beginning and I probably learned the hard way.

  Rebecca: What didn't go well?

  John: There's lots of things that didn't go well, and if there was an issue, I wouldn't always address it. Like sometimes I let it go too long. Sometimes some issues are just better left avoided.

  Rebecca: Okay. Like what?

  John: Well, because they might fix themselves. So if you've got an employee that's got a bad attitude, maybe you don't pull them up on day one. Maybe they're just having a bad day. But if it's been consistent for a week or two, perhaps you could have a little chat where you're like, is everything okay? Because you don't see yourself.

  Rebecca: And that's a good distinction right there, because I think a lot of people go into these difficult conversations and they perceive it all as conflict. So they get really nervous because they think having to give feedback, giving negative feedback, it's going to be a conflict environment, when actually it's, well, is everything all right? Do you have everything you need? Has something gone wrong that I need to know about? And I've seen this with you where you kind of shift the frame a little bit where you don't go in as you suck, you need to change. It's what am I missing?

  John: So I think if you've got a difficult conversation to have, don't go into it trying to have a fight at the start. Like there are some conversations where you need to get into a fight.

  Rebecca: Mm-hmm.

  John: Rarely, but sometimes you do. So I think it's best, if you've got an issue that needs to be discussed or should be discussed, it's best to discuss it from a place of love as opposed to hatred. And if you need to get a bit more worked up, then that's not always the worst thing, but it is best if you can control yourself.

• What Bad Trade Business Leaders Are Doing Wrong

  Rebecca: I want to know what people shouldn't be doing. So the people who are listening who are bad bosses, bad business leaders, and these are the things that are holding them back. What are they?

  John: Yeah. So if you're not looking at your numbers, if you don't look at your P&L at least monthly, that's a big problem. Preferably weekly. If you don't know how to read a balance sheet, that's something that you should change. If you don't know the difference between cash accounting and accrual accounting, you need to change that. So focusing on the numbers. You also need to have a goal. You've gotta have a revenue, a gross profit, and a net profit goal. And a cash goal. And if you're not focusing on cash, that's a bad thing as well. I think one of the really bad things that I did, like I mentioned before with my management team, would be cancel meetings. And I think the biggest thing is just be a person of your word. So if you are telling people that you're gonna be there at a certain time and you're not, stop doing that today.

  Rebecca: I've got another one. The second you start getting some big invoices paid, don't go and buy a car. Don't go and buy a 200 grand car. Don't go on holiday for six months. Don't go and buy a $3 million house.

  John: So what should you do instead?

  Rebecca: You start investing, you pay down debt. You keep the private wins before the public wins.

  John: Private wins before public wins. Yeah. That's good.

  Rebecca: Take care of your cash. Alright, well I think that's all we've got time for.

  John: Great.

  Rebecca: Thanks for the chat.

  John: Thanks for coming on Bec. Okay, thank you.