Lighting for Profits - Episode 236

Bruce, founder and owner of Armada Technologies, has spent over 35 years in the field mastering the art of locating, fault finding, and testing in the irrigation and lighting industry. Starting his career at Progressive Electronics in 1991—the original innovators of irrigation and lighting testing devices—Bruce shares hard-earned insights, practical techniques, and lessons you only get from decades of real-world experience.

Listen to Episode Here

Watch the episode

Episode Transcript

Welcome to Lighting for Profits, the number one landscape lighting show in West Michigan

Welcome to Lighting for Profits.

All light, All Light, All Light.

Powered by EmeryAllen. Here is your host, Ryan Lee.

Oh, light. All light, all light. Welcome, welcome, welcome to the number one landscape lighting show in West Michigan. That's right, guys, it is happening. We are finally the most watched, most listened to landscape lighting show in West Michigan. So kind of cool. if you're looking to start or grow a landscape lighting business, you're definitely in the right place. We are here to educate and motivate to help you dominate. So guys, want to thank you so much for your support. We're up to, over 100 reviews, still accepting five star reviews on Apple and Spotify. So you know, if you're bored and you're like, I don't really want to listen right now, then at least go do a five star review. And if you do want to listen, we got an awesome show lined up, guys. We've got the inventor, the founder, the owner of Armada Technologies. And so you, know I like to talk about sales and business and stuff like that. So it's like, why would we be talking about a wire tracer? Well, we're going to talk about why we're going to be talking about a wire tracer. because this has to do with your profitability. and so I'm really excited to have Bruce Nelson. Like I said, he's the founder, he's the owner of Armada Technologies, excited to have him on the show, talk about his entrepreneurial journey, and, and how that's been going and also talk about, how his products can, can help us out in the lighting industry. So, make sure to, stick around and listen to him.

Can your outdoor lighting business make 1.2 million with just two installers

and by the way, before we have, Bruce on, someone, asked me the other day, they're like, what's the, like what's the average. They were asking numbers about landscape lighting, you know, like, what's the average ticket? And how much can you make? And it's like, well, how much can you make? I mean, how much will you make if you do the right things? Right? Because can and will are different things. But I want to, I want to pose this question. Can. Can your outdoor lighting business. Okay, tell me what you think. Can your outdoor lighting business make 1.2 million top line and net $240,000 profit with just 2 installers in 12 months? Do you think you can do that? 2 installers, 1.2 million, top line, bottom line, 240k profit after you pay yourself an owner salary. Is that possible with Just two installers. Well, it's actually not just possible, it's actually pretty simple. Now, simple doesn't mean easy, okay? If it was easy, everyone would do it, right? But there is a way. And so I want to just break down, like how you, if you're at 0, can go to 1.2, and maybe you're already at 500, maybe you're already at 1.2, maybe you're already at 2 million. How you can add an extra 1.2 million with $240,000 profit attached to it with just two installers. Now, most people aren't ever going to do this, and here's why. you know, as a business coach, I'm formally trained. M. I'm not formally trained. I just had a lighting business. I had a landscape lighting business. I had it for 12 years. I sold it. I figured out all this stuff that didn't work, right. That's how you become a certified business coach. but, one of the things that they teach you in business coaching school is, you have to use certain phrases, like one of the phrases that you're supposed to say all the time. And you guys know this. If you follow any business coaches on social media. Know your numbers. I'm supposed to say that. If you say that like every other day, you're really, really good business coach. So know your numbers. But when you hear people say, know your numbers, like, what, what does that even mean? You know, like, I remember hearing that for the first time. I'm like, okay, now what? Like, and what numbers are you supposed to even know? But it really is actually super important that you know certain numbers so that you can make data driven decisions instead of gut reaction decisions. Okay? And I'll admit, like, most of the time when I was running my lighting business, it was most, mostly just gut reaction. And it was like, you open up the checking account, you're like, all right, we cool? You? Yeah, we're cool. Oh, nope, we are not cool. We have to go sell jobs, right? But I've had the opportunity now to coach hundreds of, lighting business owners. And I see a common trend and most people don't know their numbers. And so, actually, it was actually earlier today, we did a private, one on one. It was actually a one on two because we got the, one and only. The great Dan Plata. We did a, one on one CFO session with Dan Plata. Dan is one of our coaches. He owns his own bookkeeping business called the Best Damn Bookkeeper. and, he's, he doesn't just drink beer. I know he, he like puts on this Persona and stuff like that, but he's, he actually does work, you guys, and he's actually super smart, even though it looks like he just drinks beer and does podcasts. Super, smart guy. I don't care what you say about him. but we were talking about this relationship between, pricing, between production, like how efficient you are at getting these jobs done and pay, like, how much do you pay your people? So we had this amazing conversation and honestly, there's a, there's a formula, and I'm going to tell you what it is right now. There's a formula. If you really want to do 1.2 million and net $240,000, there's an actual formula that you can follow and use as your guide, as your map to make sure you hit those numbers right. And then once you understand the formula and you build these little machines I'm going to talk about, then all you have to do is focus on certain elements. And it's not confusing and it's not overwhelming because you're not trying to solve all the problems. You're just solving the one problem. So the formula is this. If you're running a, if you want to run a profitable lighting business, your cogs has to be at 50% or, or less. Okay. cogs is your cost of goods sold and in that is basically your materials and your labor. So when you sell a job, you sell a job for, let's just say $10,000. It can't cost you more than $5,000 in materials and labor. If it does, there's going to be problems down below. Okay. And so some people don't even. I mean, this is like the most simple place to start. Most people don't do this. Right.

There's a relationship between how you price things and how efficient your installs are

And so basically we met with a client. That's why I said it was a two on one. It was me, M. One of my one on one clients in Dan Plata. And, we were talking about kind of how to back into some numbers, price per light and stuff like that. And if you really want to, like, make sure your Cogs is below 50%, you want to make sure your labor that you're paying people is under 15%. Like 13 is even better, but under 15%. Okay. And so if it's 15% for labor, that means you'd have 35% to spend on materials. Right? Right. And so, you really, at the end of the day, want it. When you, when you come up with like, let's say you buy a fixture. Like a spotlight's kind of like the number one light you're going to use. the easiest way to do this is get that spotlight price. Let's say you're spending $100 for a light, times it by four, times it by five. That's an easy way to come up with a price per light that's going to protect your margins later on and still allow you to bid quickly. I'm not going to spend time right now. I don't have the time to go in all the details on how to figure this out. But your COGS needs to be less than 50%. If it's over, then you're eating into your bottom line. And that 240,000 is suddenly 180,000, 150,000. A hundred thousand dollars profit. Like, the profit's gonna go quick, right? Marketing. Marketing should be, the budget that we put together is 7%. Now, can it go up to 10? Can it go up to 15? Absolutely. But something's gotta change, right? So these numbers are all going to add up to 100%. And you got to figure out where you're going to cut or where you're going to increase. So if you want to increase your marketing budget from 7% to 10% or even to 15%, are you okay potentially making less money for a while until you start selling more jobs? Are you okay with raising your price? So now all of a sudden that, that 10% goes back down to 7%, right? admin, which includes, like your office personnel, which includes your owner's salary, 14, percent fixed overhead, 5% and VAR variable overhead, 4%. So all that adds up, right? And, that's how you walk away. And then the other number is 20%. That's your profit. That's your net profit. And so at 1.2 million, 20% is 240k. Is that possible with two guys? Like, how do you even know if that's possible? How do you figure that out? Well, I'll tell you, that's why we're doing this. But there is a, there's a relationship between how you price things and how efficient your installs are. And the moment that's off, you're going to start making less money. And so, we basically are walking through their P and L. And this again was like a private CFO session. It was awesome because it was very revealing on, like, hey, are we pricing? Okay, how's our production? How does that look? Right? And one of the things that was revealed is we weren't meeting or matching the capacity that was available. And here's what I mean by that. They had strong cells, but it wasn't 1.2 million. Okay? It's about half that. Numbers were decent, but a few minor things were off. And. And it's not a lot, but like a couple points here, a couple points there. Before, you know, it's like 2, 4, 6, 8. Now all of a sudden the 20 margin goes down to 10, goes down to 5, could go down to 0, like, really quick, right?

So one of the things you got to know is your capacity. How much can you actually sell and install in 12 months

So one of the things you got to know is your capacity. So you reverse engineer the numbers. Like, how much can you actually sell and install in 12 months? That's what you want to know, that that will give you your capacity. So the first thing you need to understand is what market do you live in? Right. if you're in Michigan, then you might not be able to install every day because there might be four feet of snow on the ground. Maybe not. Right? if you're in Florida, you might think, I can install every day. Well, what happens when all the snowbirds leave and it's hotter than hell out there and no one wants to go outside? Right. So it's not going to be 365 days in most markets. Like, an average number that you can use is 200. You have about 200 working days. For an outdoor lighting business, that's a pretty good average to go off. Maybe you're in a market that's 180, maybe 160. You know, maybe you can do 220, but 200 is a good average number. So then we go to this capacity number. Right. How do we back into this number? Can we really do 1.2 million and net 240k? Well, answer this. How many lights can two installers install per day? Like, on average? Okay. And if you don't know because you're like, I don't know, it's just me, well, then you're going to have to guess. Okay? At some point, you have to make up a budget number, go do some installs with two people and measure their productivity. Okay. If your two guys can install 10 lights a day, then that's the number you're working with. Can you hire two other guys that would be more efficient? Maybe. Probably you should be right. But your numbers are unique to you and your environment. Okay. If you're installing in rock and someone's installing lights on the beach in Florida, and they, like, you just, like, let the wire on the ground and it Sinks in the sand, it's probably going to be a faster installation situation. Right. So how many lights can two installers install per day? Well, I'm just going off of some non aggressive numbers here. Do you think that two people can install 15 lights in a day? Is that possible? Is that crazy? It doesn't sound crazy to me. Fifteen lights, two people, that's only seven and a half lights each. Okay, now this is average. Maybe, maybe you do installs where like you only do a core drill every 200ft.

Like that.

that would be weird. Like why would you do those installs? Right, but an Average install, yeah. Two guys can install 15 lights in a day. That doesn't sound crazy to me. Okay, and so if you're charging 400 per light and you're doing 15 lights per day, how much is that? That's $6,000. So now you know, hey, I'm can install $6,000 per day. That's my capacity. And how many working days do I have? Oh, Yeah, I have 200. $6,000 times 200 working days. Just so happens to be 1.2 million. So can you install 1.2 million in a year with two installers? Absolutely. You just need to make sure that your two guys are installing $6,000 per day for 200 days. Now the, the numbers can go off and get real crazy real quick because let's say you're charging 300 a light, and now all of a sudden that's $4,500. 300 times 15 lights, that's only 4, $500 per day. And you're not going to get to 1.2 million because 4, 500 times 200 days is what, 900,000? You just lost $300,000 in revenue just because your price was a little bit lower. Okay? So this is why knowing your numbers matters, because then you can reverse engineer and figure out where the problem is. So you'll end up with either a sales problem or a production problem. Okay. You're either gonna like be selling 1.2 and then your guys aren't, able to install that. And you're like, what is wrong with these guys? I'm selling $6,000 for 200 working days. And they can't do that. They're, they're getting, they're almost finishing the job, but we have to come back the next day. Okay. And that's a problem because there's only 200 working days. Right. Or the guys are cranking it out and then they're waiting for you to sell. And you're like, I don't have leads, I don't have. So I'm not good at sales, I need more leads. There's just not demand. You blame it on something else, right?

You have to understand the relationship between sales, between installations. So I encourage you guys to build the machine

So you're either gonna have a sales problem or production problem. And here's where it's important to understand these numbers, okay? Because let's just say you're a, you're you're a six hundred thousand dollar business, okay? Your expenses, which is like your labor, your overhead, your trucks, your insurance, your fuel, like all your expenses, your how much you pay yourself, your expenses are 350,000. So it's like everything minus materials. And you have 200 working days. Then you're basically going to divide 350,000 divided by 200 working days. And that's going to give you how much it costs you every day to wake up. That's your daily burn, that's your daily overhead rate. And in this case, 30, 350,000 divided by 200 working days is 1750 a day. So you go sell a 15 light job, you charge 400 bucks a light, you're like, dude, I'm good. We're gonna, we're gonna be rich. We're gonna do a $1.2 million business. Okay, well that $6,000 job costs you about $2,000 in material. Then you add your 1750, that's your break even number, right? Your daily overhead. So now you're already at 3750. And then don't forget about your 20% that you need to make. And so you add another 1200 bucks and now you're at 49.50. So you're like, sweet, I have a thousand dollars extra gravy in there. It was, I charged 6,000, we're at 49.50. And from the outside everything can seem great. And you're going to make tons of money. Problem is if you don't finish that job in a day, you're screwed. Your numbers are thrown off big time because now instead of a one six thousand dollar job in a day, you have two three thousand dollar jobs. Three thousand dollars today, three thousand dollars tomorrow. And by you throwing your overhead numbers and everything else now you go from literally making an extra thousand dollars gravy. Like what do I do with all this money? I'm so rich to crap. I just lost $500 a day. I just lost a thousand dollars a day. Okay, so this is what, when you hear people say know your numbers, this is what we're referring to. You have to understand the relationship between sales, between installations. If you need a job cost and figure out, hey, I thought that job was going to take two days. Why did it take three? Because that's where you're losing so much money. You can have a 5, $600,000, heck, you can have a $1.2 million business and not make any money. All because you don't know your numbers, you don't know how much you have to install and you don't have a way to incentivize your guys. Like, no, you need to get this job done right or maybe you need to raise your prices. Maybe you do need to charge more. But there's a relationship and you need to understand that by knowing your numbers. So I want to encourage you guys to build the machine. There's a marketing machine, there's a sales machine, and then there's operations, a production machine. Once you build those independently, connect them. Then what's beautiful about this whole thing is it's a system and it's built and all you then you need to do is just feed the machine. Feed the beast. And you just put leads in the front. It spits out to appointments, appointments goes to sales, sales goes to installs, installs goes to profit in your bank account. But you need to dial in each machine and once it's dialed in, then your only job is to get leads into the front end of the machine and then maintenance. You know, machines aren't going to last forever. They need, they need maintenance. Right? So that's why you are get invested in leadership and management and everything else. So I want to encourage you guys to really spend time knowing your numbers. Okay? If you need help, reach out. Connect with Dan Plata. He is the best. Dan Bookkeeper. He's a super smart guy. He can get you on the right track. So reach out. You should be. No, you should be measuring numbers every single week, every single month so that you know if you're making data driven decisions or just gut reaction decisions like I used to. So make sure you guys are spending time doing this. Hey, you guys know this. But friends don't let friends install garbage lamps. If you want less callbacks and more referrals and repeat business, stick with Emory Allen. Emory Allen makes premium LED lamps for lighting professionals who demand the best. Don't settle for less. Upgrade your designs and installations today with Emory Allen. All you have to do is reach out to Jackson. His email Jackson L as in the letter l jacksonlryallen. com to take advantage of their contractor pricing. Don't forget to mention that you heard about them here on Lighting for Profits, and, they'll hook you up. again, the email is Jackson L dot com.

Bruce Nelson is the owner and founder of Armada Technologies

All right, Did I tell you? Did I tell you we're having Bruce Nelson on? I think it's time to get, the show on the road. let's get our intro music going on. What do you guys say? Plus, I need a drink. Welcome to the show. I'm Mr. Bruce Nelson. What's up, Bruce?

Not much. Hanging out in Michigan. How did we get to be the number one radio or talk, show in Michigan? It's.

Well, it's not the talk show. There's probably way cooler talk shows, but it's definitely the number one landscape lighting podcast there. I'm.

I'm confident.

Yeah.

Very cool.

I know. Would you. Would you have thought. Did you grow up there?

I did. I grew up in Battle Creek, Michigan.

Yeah. Okay. Yeah. Who would have thought that that'd be the home of the number one landscape lighting podcast? I don't know. Wild.

well, certainly Battle Creek's not a very exciting town, so maybe that makes sense.

That makes sense why we're the number one.

Unless you like cereal, then it's big time.

Oh, really? They make a lot of cereal there.

Kellogg's started there. Post started there. Used, to be. It's called Cereal, Cereal City, so.

Did not know this. See, we're learning things already. So does that mean you're a cereal fan or you're like, when I was

a kid, it was two bowls for breakfast and two bowls where I went to bed. And you drive through town, you can smell the corn flakes cooking. It was fantastic.

Yeah, I kind of like that.

Now it's all gone.

Oh, where's. Where's it at now?

you know, I think Kellogg's has moved a lot of stuff to Grand Rapids, but Post is long gone. They got bought by General Foods.

Okay, so the wrong side of Michigan. Now

I'm on the right side of Michigan, but I don't know if your listeners want to know this much about Michigan.

Well, do me a favor. Just real quick, introduce who you are and, why. How the heck we're talking here?

Well, of course, you've already introduced my name, Bruce Nelson from Michigan, and I'm the owner and founder of Armada Technologies. pretty normal life. Went, to college in Michigan. have been in business with Armada for 21 years. Started off in my garage. Learned it from, the original company out in Arizona, Progressive Electronics. Some of your old timers will probably know that name. And, they let me go when we got bought out, and I kind of figured I needed to feed my family, so I became an entrepreneur.

That's cool. So how did you decide to, like, stay so niche into. I mean, does Armada do anything else besides wire tracing?

Well, we try to be a test equipment supplier. Because you want to be soup to nuts. That's a, You know, when you look at these businesses, you don't want your customers to have to go somewhere else. So when you sell a lighting job, you don't say, hey, we'll get your light bulbs from somebody else. So you want to be soup to nuts, but we primarily spend, our time on locators.

Okay.

We have multimeters and the other test devices that you. You'd come across in this industry.

Cool. Yeah. I didn't realize that. So 21 years ago, you're like, hey, I'll just start my own business because I can,

What.

What were some of the problems you were seeing in the field that. That made you say, all right, something's got to change, Like, I can fill this need?

Well, you're touching on something there, because, you know, these. These businesses that get created, entrepreneurs.

Find that itch that needs to be scratched and then scratch it

Name your entrepreneur. They're seeing an irritation or a need in the market. If you're bitching about something, somebody else is probably bitching about it, too.

Yeah.

And all you got to do is figure out how to. How to solve that problem, and you've got yourself a business.

So what was it for you? I mean, you. You saw this need. Were you out, like, digging trenches or something? Or. Like, how did that come to be?

Well, I. I worked in this industry, with the original company, like I said, and we get feedback from contractors, suggestions on how we can make our products better. And we never did that.

Oh, really?

Yeah. So. Well, it was a very niche business within a niche business, so they really didn't pay that much attention to it.

So what were things. Were they saying?

Well, if you remember the old tackle box locators, there was no speaker on them. They had a weird battery setup. The, What do you call it? Case was a weird size. You couldn't fit it in your trucks. They get stolen when you left them in the back, your pickup trucks. And they were very short. So my. One of my jokes at my, trade shows would be, if you're 2ft tall, these are great. But I'm 6 foot tall, so I want a longer wand on my locator. But I think the, the tidbit here, the takeaway for your custom, your listeners is, you know, find that, that itch that needs to be scratched and then scratch it and you'll have yourself a business. So that applies to lighting. I don't know.

But the, it doesn't matter. They'll figure it out. They're, they're adults, I think most of them.

What if people. You know, I always think it's funny with a lot of businesses, retail, etc, dealing with the public. They're open when everybody's working. I mean I've, I've always thought like why not open your business from like 12 to 9? Because I'm home from 5 to 9. I'd like to see you.

I know, I've thought that too. I'm like, I hate it when you go to the store fully expecting to like spend money and it's just six o' clock and they're closed. I'm like, how? How what? Like, yeah, when do. Isn't. Don't regular people work like I work?

Well, you know, we're all consumers. I assume some people don't work on a 9 to 5 schedule, but it's always been a head scratcher. And you've just prompted me to remember I was once in a town called Parks, Arizona, going into a convenience store that closed at 8 o'. Clock. And I walked in at 8 o' clock and the girl at the counter says, oh, I'm sorry, we're closed. I walk back out to the car with my wife. I said, that is not the person who owns this business. I walked in wanting to spend money and she kicked me out. That's an employee. That's a big difference between the two. You come to me with money at 801, I'm taking it. I'll stick around.

Right.

I said, your hours only tell you when I guarantee that I'm going to be there. But if you're walking in with money at 805, I'm sticking around.

Hey, that happened to me. I literally went to get my hair cut a couple months ago and it was, I mean, you know, again, to be fair, if they, let's just say it was eight. I don't know what time, if it was 8 o', clock, I went in at like 7:54. I get it. You know, they, they want to get to leaving. But I was like, hey, can I get a haircut? And they were just standing around and it was spotless. You know, they'd obviously spent time Cleaning it. Yeah. And they're like, They basically told me no without saying no. I was like, all right, see you later.

That's the difference between an employee and an owner.

Yeah.

We're going to talk about business principles in general

So this is. I mean, we're going to have a very brief time here to talk about business principles in general. And we want these listeners to walk away with some nuggets. But one is, you know, you know, keep that in mind. When your customer wants you to do something, don't turn them away. You know, your wife will wait 30 minutes to go, for dinner because she'd like to have a better car next year. So make the money. Don't turn the guy down. Be his servant.

Yeah. Serve the client. So, I mean, you. You've had your own business 21 years. What have you? like, I don't know how big your team is and stuff like that, but how do you. How do you inject that same, mentality and culture into your team members that they're. They're not an owner of the business?

Well, first, you got to understand what your strengths are. Okay. How did I get where I've gotten? And I guess the corollary there, too, is also what, as we talked about, the. The features that the contractors were asking for, you know, what is it that I'm bringing to the table? And, when you realize that, then your job is to communicate that to your people. So in our business, it's all. I use the word servant because I use it all the time. We are here to serve our customers. They're the ones who put my kids through college. They're the ones who pay for my house. They're the ones that do everything for me financially. Without them, I starve. When you realize that, you kiss their. You know what's. And so number one is make their life as easy as possible. When you're a consumer and you go to a store or you go deal with a vendor and they make your life impossible, do you ever go back to them? Never. But when you become a servant to your customer, they'll be the path to your door. And pretty soon, it doesn't matter that you're 10% more than the other guy because he wants your service. So I beat in my people's. I don't beat into them. I strongly coach them to believe that we are the good guys. We are never telling our customers what they want. Our customers are never wrong. We don't tell our customers no. We're there to serve them.

That's cool. So I, guess going back to you starting the business where, like, how were people finding wires, locating wires, before you invented this, before you started doing this?

Well, the old tackle box locator in the irrigation world was the standard. And then there were some oddballs that people would find on ebay or something like that, but that was pretty much the standard. And, we really didn't invent locating. It's been around for 100 plus years. We just improved and listened again to what customers were telling us. So give them the product that they want. It kind of falls in line with that service philosophy. You can tell by how strongly I'm saying it that I truly believe it. It's really what drives the boat. You take care of people, they take care of you.

Yeah, I like to say serve the client at the highest level. And it's the same thing. It's just because, you know, that's where your repeat business is. That's not where your referrals come from. They can be your number one marketer when you're, when you really adopt that attitude.

Well, I tell people business really isn't that hard. If you treat people the way you want to be treated, that's a great roadmap to success. So if you don't like something, for example, when in our business we answer our phones, we really literally answer our phones. I put that in place 21 years ago because I couldn't stand calling companies and getting the run around with their phone system. So I said, geez, if I don't like it, I'm guessing other people don't like it either. So, you know, I sometimes categorize myself as a dinosaur. I'm 64 years old. But the way we did things in the old days were kind of satisfying. When someone, you know, makes you fill out online forms or go through, different menus to get where you want to go, they're not telling. They're not making your life more efficient. They're making their life more efficient. And that isn't in line with the philosophy of serving your customers.

Yeah, I love it. Yeah, that's where technology and automation can actually backfire and provide a disservice to that.

A tool is a labor saving device. So if you think about these tools as investments in labor

Don't let the accountants run your customer service.

Yeah, right. Well, you know, we only get

the AI people doing the answering the phones.

It's only a matter of time. Well, I'm a big proponent of helping people make more money in their business so they can buy back their time, get more freedom to spend more time with their families, do whatever they, however they want to make an impact on this world. And so I talk a lot about sales and pricing and stuff like that. But I guess I'm still surprised when I show up to a job site and I'll see an installer, for example, like going back and forth to the van several times and I'm like, what if you just like wore a tool belt? You know, like, what if you just carried the tools with you? And then I'll meet people that aren't using certain tools. I wonder if we took a poll, how many of the just true outdoor lighting, like landscape lighting, specific companies, how many of them actually own a wire locator? Right. Versus like, oh, I'll go rent one or find one when I need one or whatever. why is it so important to have the right tools in business?

Well, it's an investment. So you're looking at, ah, I get in this conversation a lot, you know, trade shows, talking to customers. A tool is a labor saving device. Labor costs you money. So you're, you know, technology and labor is always competing to see which is going to be the cheapest in your world. So let's say you spend $500 on a locator and it can save, let's say a dollar or an hour at a job site. You pay your guy 20 bucks an hour. So take 500 divided by 20. It takes you 25 hours of labor saving to pay for that device, for that locator. Okay, so it's a, very simple return on investment calculation. Now if you're going to use that locator every week, in 25 weeks, you got your money back and you got the locator. So if you plan on being in business for more than 25 weeks, it's probably a good idea to invest in that tool, whether it's a locator or a, you know, a hammer or whatever it is. Because I joke around, about the original cable locator was a shovel. You can spend two weeks digging up a cable if you want to and you'll find that cable. But is really that the most efficient use of your labor? No, it's not. It's an obvious, you know, comparison. So if you think about these tools, as investments in labor saving devices, it makes it a little easier calculation because sometimes you'll say, I only use it once a year, I don't need it, I'll rent it. Great. That's the kind of calculation you should be making with your business.

Yeah, Even then I feel like I can make the justification that it's still worth the investment because when you have to rent it, you still have to go rent it.

Well, not only, you know, when I was listening to your intro, I got kind of a flashback to my college days of taking cost accounting. Greatest accounting class I ever took. So when you talk about renting a locator. Yeah, there's a 75 a day charge. But what about your half an hour time going to there and the half an hour time taking it back? My time's worth money. What's an hour of your time worth? And what if you get there and it's not there now you've wasted an hour of your time and you can't find the, the locate or the cable that day. So there's a whole lot of, you know, there's a whole lot of sophistication that goes into running any business, all the different departments and calculations etc. But I have to say that the best course I ever took in my life for running a business was cost accounting.

Yeah.

What do things actually cost? Not, not when you go to a store and buy a light bulb. That's an obvious cost. But what does it take you to go there and get back and all the other things that go along with, with accounting.

I mean you have a better memory than me, it sounds like, but that did that because I took like accounting classes and all in economics and all this stuff. But did it, did opportunity cost ever come up? Because that doesn't work. Absolutely, Totally it did.

Okay, well I mean opportunity cost is an easy one if we want to illustrate it. If you're working for 20 bucks an out. Well I chuckle at some people when they're self employed. If they sometimes figured out what they made on an hourly basis, they may not think, they may find that it's not as much as they think it is. And I've literally said to people, sometimes it might be better for you to work at McDonald's at the counter because you're making more money there.

It would be better because a lot of these guys are operating non profits and, and they're not getting the non profit tax advantage.

Let's explain what opportunity cost is for your listeners

Well, let's, let's explain what opportunity cost is for your listeners. Go ahead with that one.

Well yeah, because you had the example of like, okay, again I think, I think people think, oh, like how much is an average locator? Or like the, a locator that's anywhere

from 700, 1400 dollars is usually their price range.

So like I think you said a thousand, let's just say a Thousand bucks. Like, I don't know. Should I do that? Like, nope, you shouldn't. You should save the thousand. And then you go up to a house, and then you're like, crap, I, really would like a locator right now because there's a. There's a cut somewhere. I don't know where it is. And, yeah, it's going to cost 30 minutes to go rent it, and then 30 minutes at the counter and then 30 minutes back. But that's not the 90 minutes times your, you know, $25 an hour you're paying. It's the. The time that now you can't get to the next job that you were going to make $2,000 on. That's, to me, what opportunity cost is.

Well, opportunity cost, if I explain it to my children, it's. You have a choice of two paths in life. It might be a big decision, might be a small decision. But let's take college, for example. I go to college. I spend four years at college. Irregardless of the cost it cost me to go to college. That's your direct cost. I spent four years not earning money. That money that I did not earn is my opportunity cost. Was it worth going to college for four years to forego making $200,000, $50,000 a year? was it worth that? Plus the expense that I had to pay to go to college? The direct expense of going to college is what it is. But the opportunity cost is I spent my time doing something that I didn't make income when I could have spent that time making income. That was my cost, my opportunity cost.

So was it worth it for me?

Yeah, absolutely, it was worth it.

But, what do you. What are your kids? How old are your kids?

Are they.

Are they going to college? Or they're like, wait, m. It cost me 200 grand.

I got you to, go to college. My oldest is 26. Then I go 25, 23, 19, and 7. Whoa. Yes.

Shots fired.

Yeah. First. First, question people ask me is, so how old is your second wife? No, same woman. So we just have one very late in life as a huge accident, but he's been a blessing, guys.

We're just bored. That makes sense.

That was an opportunity cost. I could have been doing something else.

See, it all relates.

But, no, my. My college education was worth it. But I do counsel my children. if. If you need to go to university for a specific. Like if you want to be an accountant or an engineer, you got to go to university. But I probably Learned a lot more about business just doing it versus reading, about it.

Yeah, that's how I feel too. I feel grateful that I, I did it. And I definitely, I know it was worth it. But it's funny, my daughter, she's in, she's a junior in high school, and she'll send me like, videos from like, Gary Vee and Gary Vee's like, school is such a waste. And I, and I never went because I knew my potential and I, and I was just going to be an entrepreneur. And I'm like, but Kate, like, if, if you're going to be an entrepreneur, then you can, like, you know, subscribe to that mentality. But that, that doesn't mean you just can't go to school.

It depends on what you want to learn. But I never sat in high school and said, I want to be the owner of a cable locator company someday.

Right.

So you don't know what you don't know by limiting your choices. Okay. you're making a decision there. But, you know, there's plenty of examples of people who didn't get a quote unquote, formal education who did well in life. this is probably a good nugget for your kids, but not necessarily for guys who are already in the lighting business. But if you want to be successful at anything, I also preach to my children, you need three things. Now, there's more than three things, but these are the three main ones. Desire, training, and ability. So for your guys, I mean, if you're thinking about getting into your own lighting business, you better like getting up. In fact, when you get up, it's not, you're going to work, it's I get to go to work today. I'm so excited. That's the desire portion. You can learn. That's the training and the ability. Well, you're gonna have to self evaluate whether you're any good at this. But if you don't have the desire, you're wasting your time for whatever you're trying to do.

Yeah, yeah. Eventually your gas, you'll run out of gas and be like, all right, I don't like this.

It's a chore. You're not going to do it.

Yeah.

So.

Every lighting company should have a wire locator, right?

Well, I was, I'm trying to think of, like, reasons why every lighting company wouldn't have a wire locator. And I was thinking, you know what? like you said, you don't know what you don't know. Like, my common sense is different than your common sense. You'd probably look at some of my choices in my life and be like, what? I thought that guy was more competent. we all have different levels, right? And so I'm thinking about it. I, I bet you a lot of people don't even know, like what, why would who's. If they've never used a wire locator? Like, what does it actually do? Like get and go back 22 years before you knew what one was or whatever. And like what, what does it do? What's the benefit of it?

Well, the primary two benefits are going to be I, want to know the path. Okay, so why would you want to know the path? Well, for one thing, before you start digging up a hole, you want to make sure you're not going to hit something. That's usually in England they have, a product called a CAT and Jenny. And I wonder, what the hell does that name come from? Well, CAT is cable avoidance tool and Jenny was the generator. Short for generator. But long story short, avoiding screwing up something else by knowing where your wires are going. Number two, though, is probably not as well known as cable. Locators can also find damaged wire. So if you got to cut wire somewhere. I did. I don't have tons of hands on experience with lighting, wire finding because it's frankly, it's kind of, it's kind of simple. It's fairly short and fairly shallow. But a friend of mine had a string of lights that weren't working and he thought that the wire was broken. So sure enough, we hooked up, the locator went 30ft, the signal stopped. Well, that's where the lighting had been broken by a snowplow blade. So I would say cable avoidance and damage. searching identification.

Yeah, well, I, I see a lot of people saying, hey, I, I cut a dog fence. how do, what do I do? You know, like they're, they're very reactive. So can you get a, a, a locator, hook it up to the dog fence wire and find that and mark it out before you go?

Yeah. Lighting and dog fences are probably the two easiest locates you can find because they're so short and shallow. when you get that broken wire, basically the signal just stops right there where the wire's broken.

Yeah.

So that indicates it.

But I like the idea of being preventative and been like, you know, that's just part of our standard operating procedure. Hey, I see you have a dog. Do you have a dog fence? Yeah, we do. Okay, so we're going to get that marked out before we actually start Trenching. How about, obviously irrigation. What about fiber? Can you mark, out fiber?

Fiber is a great one. Fiber in and of itself is not traceable because it's not a metallic conductor. The old days, they would put a tracing tape above the fiber because they don't want it broke, obviously. So they put a metallic conductor specifically for locating above that, that fiber cable. nowadays they're going to incorporating, that tracing cable into the fiber jacket so that you can track it that way. But you're going to probably run into both of those types.

So, so you usually can track it because they've modified.

I can never say you can track it because technically you can't track fiber because it's not metallic, but you can certainly track the tracing where they put in it, either put with it or put above it. Yeah, because they're very sensitive. They don't want, I mean, that's a pain in the ass to fix a fiber line.

Yeah, yeah, I, I really think that most people aren't using it because they don't know like, well, when, when would I use this?

Well, you're going to know if you've been doing your business for six months, you're going to know how many times you needed to find a wire and, or find a broken wire. So your experience fairly quickly is going to tell you, do I or do I not need one? Then it becomes an ROI can, you know, calculation. We go back to accounting. So I'm using it once a month. it's costing me this much time to find those breaks. This could save me this much time. How long does it take to pay that back? When I say locators go from seven to fourteen hundred dollars, they're, you know, we've got a couple smaller ones that are just a couple hundred bucks less than 300 and they're plenty strong for a lighting situation. Now they're not going to have a lot of extra bells and whistles on them, but you may not need that. So you can get into a locator for less than 300 bucks.

What, like, what are the differences? I've, I've never, I, I know I used to have an armada. I don't know which one I had. And I know there was different ones. I'm like, why would you get 700 versus the 900 or whatever the different names are?

well, we get that kind of a call fairly often where someone will call in and say, I need locator. Which one do you suggest? So I'll ask them Generally two questions, what are you going to. Well, three questions. What are you going to use it for, how often are you going to use it and what's your budget? Because we don't all have unlimited budgets. So if a guy is frequently using it, I'm going to start off at the top end of the range because those features are there for a reason. So for example the, some of Those, well the Pro 881 and the Pro 900, the two top enders are digital and the biggest reason people buy those are to eliminate the interference that you get from electrical sources. Buzzing, humming, that kind of garbage that interferes with your locate. Now if you're doing a locate a week, you're going to run into that situation fairly often and you want to be able to get to defeat that problem. Now the analog meters at the mid range don't have that feature. So that's going to be for more a guy who might use it once a month or has a limited budget to let's say 7, 800 bucks, something like that. And then for the really low lunchbox locators, those are more for homeowner types, dog fence contractors, and I would say frankly lighting guys, especially the guys that are starting off a lot of these lighting guys and you can correct me if I'm wrong, but it seems like they also dabble in irrigation though too. If not dabble actually are, are into it.

Yeah, it depends. I mean most people listening to this are pretty hardcore lighting and they, you know, they, there are less that do irrigation and landscaping. But there's out in the real world, the wild for sure. Yeah, there's tons of irrigation people that do lighting as well, you know.

Well if you're doing irrigation you're, you're probably going to want to stay on one of the the mid or high range locators.

Val: An irrigation locator can find lost valve boxes

Because one thing, an irrigation locator feature, one reason it's an irrigation locator from just a standard cable locator is it can find lost valve boxes. Those valve boxes get overgrown by sod or get covered up by rocks or something. And val, those locators have the ability to give you a signal differentiation over the valve box and therefore you identify it. If you're just dealing with lighting, you're not going to run into that. So you don't need that higher end capability. So like I say, I, I think frankly a lunchbox locator, which is my, you know, colloquial phrase for it, the 300 locator would work fine with irrigate or with lighting, you're just not going to get, you know, digital. But do you really need that in somebody's yard? you're not going to get an inductive clamp. Do you really need that in somebody's yard? Probably not.

Well, what were you saying earlier? And I, I really liked it because, like, about the. The perception, you know, like, I think it was before we went live, but you were like, you know, the customer sees you, like, testing an outlet.

Well, you don't show up in a. In a job site. No one shows up at a job site in a ratty old shirt with holes in it and, you know, blew their nose on the sleeve. You want to look professional. Right. So we were talking about when I was younger, before I got into this world, if I wanted to figure out if an, outlet worked, I could just plug a light bulb in and turn it on. When you translate that into a business perception from your customer's perspective, that doesn't look very professional. There's the utility of having tools that work for you on a job site, but there's also the, professionalism that it gives to your customer. The impression that this guy has specialized tools to do his job. He knows what he's doing. Versus, hey, let me stick my finger in this outlet and see if it shocked me.

Yep, it's on.

And I don't need a haircut this week.

I believe in that. I remember when. When drones were just be. Not necessarily coming out, but becoming a little bit more widespread. One of my clients, made that part of his sales process. Like, hey, I put a drone up in the air and. And he was telling me how, like, people are like, oh, that's cool. A drone like that didn't make. He wasn't a better lighting designer or better installer, but he was appearing as a more professional because the other people didn't have drones. So it's the same thing. It's like a digital versus analog. Like, I don't know. I mean, I think to the right person, that actually could help you just appear that much more professional because you have the better tools.

Well, you're looking at, you know, from the marketing side of the world, and this is just general business. You want to set yourself apart somehow. The usual starter way, or. I don't know. I see a lot of people try to do this. Well, we can undercut their price. Well, that's not. That's not a path to profitability. you want to offer. You want to differentiate yourself with something different that the other guy doesn't do. So I could see where a drone survey, if you want to call it that.

Yeah.

You say, look, you know, we're professionals. If you want to get the guy that, you know, slams his trunk, go ahead. But, you know, when you got a problem, who do you think is going to help you out the best? In fact, who do you think's not going to have a problem in the first place because you did it.

Right. Yep, exactly.

You know, that's. That's a kind of a basic tidbit of business. But, if every dog looks the same, then it all comes down to price.

Right.

And nobody wants to go there.

Well, I want to help you avoid future service calls, or troubleshooting calls. Right.

What do most people mess up with the most? Checking their batteries

So what would you say, like, is the biggest mistake people make, or the thing where you're just like, oh, my gosh, why don't people get this? Why do they keep calling asking this question? It's so simple. All you got to do is hit the green button, not the red. Or something like that.

Like, you talking about something functional with locators?

Yeah. Like, what do most people mess up with the most?

Checking their batteries. By far. We get calls like, hey, this isn't working. Right. Have you checked your batteries? let me call you back on that. And then they never call us back.

Like, it wasn't turning on.

No. When. When locators, when batteries get weak, you know, things start acting squirrely in the electronics world, so they misinterpret the squirreliness, as there's something wrong with my locator, and it isn't in me. It isn't just for the newbies. I literally did some field work today, this morning, and my technician gave me a locator to use, and the batteries were good. So I'm going, man, this isn't working. Wait a second. He wouldn't give me crappy batteries, would he?

Sure enough. so, yeah, because it's not the first thing again, you just said batteries. I'm thinking, well, if it turned on, then it's good. Like, the thing should just work. So how long should a battery. I mean, literally, we might have just saved you 100 service calls. Opportunity cost is revealing itself. So, wow.

I'm coming back next week. That's worth it.

Yeah. I mean, so how. How often are. Are you, like, is a battery replacement like, once a year not an answerable question?

Because every piece of electronics is going to draw amperage at a different rate. So what, you're starting off with batteries are standard, so they have a certain amp, hour capacity.

Okay.

So it depends on how quickly you're. Well, think of it like a bathtub. The bigger the drain, the quicker it's going to go.

Sure. You don't have an average for me, though. You're not gonna. I'm not gonna be able to commit you.

there's just too many variables. But, I mean, you should be able to get, you know, 20. 20. I guess most people kind of quote 20 to 40 hours. But, you know, I look at it like when the low battery light comes on or it starts acting squirrely. That's where I'm going first.

Yeah. Okay. Because someone's literally gonna, like, have this experience in the next month or whatever. They're going to be using the locator. It's going to go squirrel in the bike, you know, what? Let me just check the batteries. And they would have called you, but now they're just going to change the battery.

Well, I'm going to tell you, it's going to be more than once a month.

Well, I'm just saying now, if you

can avoid, yeah, if you can avoid once a month, that's good. But, you know, the thing about it is, we feel bad when someone sends us a locator back for repair. And all it is is the batteries, you know, because they're wasting their time and money. And I'm like, you know, geez, we're on your side. We're trying to make your life better.

Yeah. So they don't call you first and say, yeah, well, we even have

calls where people say, I just changed the batteries and they come back and they're bad. So there's, I, ah, won't say confusion out there, but, I guess the best way to leave this topic is just check your batteries when things start acting squirrely.

Cool.

All right, you're welcome to call us. And the first thing we're going to say is, did you change your batteries?

You're not welcome to call. I just saved you. Bruce. Don't call Bruce.

No, do call us. We like customer interactions.

We almost have no turnover at our company, and I'm pretty proud of that

all right. I met you, at the IA show. The Irrigation association show. You were there, your brother was there, and then I thought. I thought it was your niece. Is it a family affair? Like, what's, what's going on?

Well, there is some family. I mean, small businesses would probably always get that, but, no, you're thinking of, my marketing manager girl I've known since she was nine years old. So she's kind of like family.

Yeah, that's very cool.

I'll, refrain from bringing up her name just for privacy purposes.

If she gets mad, she can get mad at me. But it just seemed like, it seemed cool. It seemed like a cool culture. And it wasn't. It wasn't like a. Just a corporate company that I was talking to. It was just a family. And like, yeah, this is what we do. And even, even in our conversation now, just super laid back, chill, wants to serve the client at the highest level.

we almost have no turnover at our company. I take that as a badge of honor that, you know, when you employ people, when they leave, that's your fault. You didn't give them what they wanted. So if you wanted them to stay, you should have been talking to them to see what it. What made them happy. If they leave, it's not their fault. They either wanted better opportunities, better work environment, better pay, whatever it is. But, people don't leave our company, and I'm pretty proud of that.

That's cool. I mean, you must be doing something right. So what are you doing to serve your team members at the highest level, not just your clients?

That's a great question. One of the things I, like to look for because, you know, at the end of the day, I want to make money too, is try to find things for your employees that they're interested in that don't cost you money. Okay. So in my, in some of the employees we have, we can have virtually totally, flexible work hours at the office. So I don't go as far as Kevin o', Leary, kind, of a business guru. He said, I don't care what you do and when you do it, as long as you get your work done. Not quite that laid back, but if you can find, for example, let's say I've got a, sales guy that, has an issue in Denver with a family member and needs to go there. I said, well, why don't you go do some sales calls there for a couple days and see your relatives while you're there. And, you know, it's a business trip, so it's on me. So you look for opportunities that benefit you and benefit them.

Nice.

And if they don't, if they don't cost you any money, that's even better.

So, yeah, that's cool.

How big is your team? Do you have salespeople

Well, how big is your team? You said, do you have salespeople? Do you have, like, are you guys around 15 people? Okay, very cool. That's awesome.

including one daughter.

Yeah, she's working.

It's a little family. If you say, if you see somebody with a last name Nelson, they probably are related to me.

Oh, that's awesome.

How do people get your product? How do they buy direct

Well, what is I guess if someone wants to get a hold of your product, where's the best place to get that? What's the best place to get support, to learn how to use it and all that stuff?

Well, we answer our phones so I encourage folks to call us anytime know they wish. The phone number's on our website, armadatech.com I can spit it out since this is recorded. 616-803-1080. We're in Michigan. We're there from 8 in the morning to 4:30 in the afternoon. that's the hours that we guarantee will be there. If it rings at 4:35, I'm answering the phone. So that's probably the best way to get a hold of us.

Okay.

And so we got, if you're just starting off, we've got over 40 videos on YouTube how this stuff works. And we actually have a beginner's training course on our website, armada tech.com that they can learn basically how to diagnose irrigation issues, etc. But there's a gazoodle, of information out there. I just got a link for a video today from a company, Ewing Irrigation, who did an expose on the, on our Pro 900 digital locator. So a lot of independent people are doing reviews, how to's etc out there in YouTube. It's all over the place.

Okay, well do, do they buy like from a Ewing Irrigation or do they buy direct? How do they get the product?

we don't sell direct, through distribution. Those distributors are listed on our website.

Okay. So they can either just go in and buy from one of those distributors or they have questions on which one they could call. You decide which one is best and then go pick one up.

If I had questions I would probably call us just since we're the guys that know the most about it. we love our distributors, but they've got 60000 SKUs that they're supposed to know about and that's almost an impossibility. I'll guarantee you there's something about my product that I don't know and I'd have to ask somebody at some point. So we are kind of the bible there. And But they're good at running transactions. People usually have relationships with those kind of guys.

So. Yeah. Cool, man. Well, man, really, appreciate your Time. Bruce, this is a great, conversation. Were you surprised that we went almost an hour talking about wire locators?

Are you kicking me off?

No, I was just half.

I thought you were just gonna go for a halftime, and I was just gonna say for Guinness Zero. That's what I've been drinking here. Oh, yeah, I love Guinness, but I've overstayed my welcome for alcohol. I quit about 30 years ago.

Dang. But you're just doing the non alcoholic alcohol.

It's, it's. I've never tasted a better non alcoholic beer in my life. It's really good. So there's your plug for Guinness Zero. Maybe they could be a sponsor.

Can we. Yeah, can you reach out to them and see if they'll sponsor our podcast?

Bruce Nelson: It's a very complex thing running a business

is there anything else that we didn't cover that you feel like the world needs to know about? Bruce Nelson, Armada Technologies?

Well, I'm not important to your, your, your listeners, frankly. I would say what you touched on in your monologue to begin with, though, it's a very complex thing running a business. It's a multivariate equation and there's lots of help out there that you can get. I would certainly look into cost accounting, know your numbers, understand what they mean, and, and work accordingly. But you're not in this for a charity. You're there to make money. So.

Yeah, I totally agree. It's like if I feel like as an entrepreneur and I didn't know this when I decided to start my first business, but you really do take on a lot of obligation and like a, moral obligation, in my opinion, to over deliver for your clients, over deliver for your team members, and make the most amount of money possible so that you can over deliver for these people.

You know, I would, I would leave your listeners.

Price elasticity is the biggest thing that's overlooked in business

I can think with one thing that I was thinking of as well. Pricing is the biggest thing that's overlooked in business. People do not really pay attention to how much it means. If you raise your price $10 and your business doesn't change, you've just increased your bottom line by $10 without doing anything. No more cost, no more work, no more nothing. And, when you cut your price, conversely, $10, you just took $10 out of your pocket. So as your homework for your listeners go out and learn about pricing, price elasticity. It's a very interesting to me and important concept.

People are going to think I paid you to just say that last.

Why don't you just shut up, Ryan, and do what I tell you?

They're gonna think I paid you because, that's all I ever talk about is pricing and price elasticity.

So price elasticity is important. If we have more time, I'd go through a story when I talked to my father in law about it, but, if you got too much work, raise your prices, and it'll drop off to where you want to be.

Love it.

Bruce: Make sure you implement at least one of those today

All right, well, thanks so much, Bruce. Guys. Bruce shared a ton of insights with us. Make sure you implement at least one of those today. Otherwise, you might have just wasted an hour. But make sure to implement. Get it done. Thank you so much, Bruce. I appreciate you.

No sweat. Have a good day.

All right, guys, have an awesome week. We'll see you on the next episode here at Lighting for Profits.