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The Roadmap out of COVID-19

At Master Electricians Australia’s (MEA) Industry Leaders webinar, Malcolm Richards was joined by John Horan and Tony Arnold to discuss their strategy for success post COVID-19.

John Horan has more than 20 years’ experience in the electrical industry, holds an MBA, and founded Horan and Bird, in 2004 which employs nearly 100 people. He was also winner of the Australian Service Business of the Year in 2012 and is currently one of the largest solar installers in Australia.

Tony Arnold grew up in the electrical industry and has seen firsthand the everyday issues which impact electrical contracting businesses. Tony’s second-generation family business – Arnold Electrical & Data Installations, has grown consistently through the ups and downs over past decades. In his role on the Council of MEA, Tony works to give back to the electrical industry which has provided him with invaluable partnerships and friendships.

Master Electricians have direct access to a support network of industry experts across legal, insurance, marketing, business planning and more as part of the Master Program. To find out more about the program, click here.

We’ve broken the steps to develop a roadmap out of COVID-19 in to six sections:

Scenario planning

As electrical contractors look to survive, and even thrive post COVID-19, Tony emphasised the importance of scenario planning and identifying the critical steps you can take now, to deliver long term sustainability.

“We’ve worked around two scenarios. That it could be a complete Chernobyl type situation where everything stays depressed and things don’t move quickly, and then we’ve also moved along a ‘business as usual’ type model.

“The worst-case scenario is a 25 percent downturn on annual revenue. We’ve acted early to move some people out of the business, which was devastating. But I had a theory when this first started that we needed to move, and we needed to move quickly.”

It is important to act swiftly, but you also have to keep in mind the critical skillsets required to fulfil work in the pipeline and the operation of the business, says Tony. When asked what the key focus of his strategy was, he said it was to: “maintain our pipeline and an acceptable overhead budget. We identified revenue streams we could access to ensure consistency and to try to operate as business as usual.“

In addition to scenario planning, John evaluated his delivery model for further efficiencies.

“It’s really important to look at your cost per serve and get it down as much as possible. You need [to have] the best delivery model, maximize it and deliver the best customer service at the same time – that’s really important.”

He identifies the importance of making time to step back from working in your business, to plan your direction for the coming financial year, even if it means getting off the tools for a day. This includes examining the position of your customers to identify those that will survive or even grow in this environment.

Obviously, airlines will take a major hit and restaurants are going to take a while to get back on their feet. But which businesses out there are killing it? Which businesses are thriving with fuel at eighty-seven cents a litre?

“Have a look at those businesses that are, but also those that aren’t (performing well). See what you can do to deliver a package to those guys. If you have to change your product and service, look at a different model.”

Strategic planning

To give your business a roadmap for the year ahead, having a documented strategy is critical. Tony stresses this shouldn’t be a laborious process and that the free Strategy on a Page he uses is a great resource to plan your direction.

“It doesn’t have to be complex. It’s something you can easily do with your management team or your work group. I delivered a training session at last year’s [MEA] Conference in Hong Kong, using the Strategy on a Page template. It’s really easy. It’s a matter of figuring out exactly where you see the pain points in your business.

“Pick the biggest three items and put key objectives around them, some key actions and document those actions so that they’re time constrained and someone is responsible. If you are doing development, you’ve got to know what the cost of that development is, who’s going be responsible and what the possible upside is going to be. You need to make sure that everything you’re doing in your business is providing a return on investment.”

With a strategic plan in place, you will be able to take a flexible but focused approach on the road out of COVID-19. It will allow you to be in a better position to deal with setbacks and to respond to new opportunities as they emerge.


Knowing your bottom line and setting realistic targets, according to Tony, is now more critical than ever.

“Budgeting and the financial planning of your business moving forward is critically important and make sure you know where your costs are and work every possible scenario through your business.

“We’ve set solid, easy targets to meet because I think what we call easy targets will probably turn into very difficult targets. We’re trying to keep it real knowing this could turn into a very tough business environment over the next 12 months.”

For business owners, Tony believes there are critical actions to take. These will generate challenging questions you need to consider as part of the budgeting process.

“Basically, budget for business as usual…then start to stress test using different scenarios and changing market conditions. We used this approach, decided how it was going to affect our overall cost of overheads and then what sales we needed to achieve, to support that overhead. And the most important one was, as a stakeholder, what sort of return on investment do we want? What was the minimum return that we would accept as business owners and financers.

“If you’re happy to do business and make zero margin and burn a whole pile of cash, that might be your strategy. But I think it’s flawed. And I think that, as business owners, we’ve got to be better than that. We’ve actually got to go out there and make sure we put a put a dollar in the bank at the end of the year.”


When working through such uncertain times, many contractors’ first reaction to secure work has been to drop their price. Unless you know exactly where your break-even points are, Tony stands firm that dropping your price is going to cause more damage to your business in the long run.

“There are people scrambling to win work and trying to keep a labour force busy. We have seen margins deteriorate to horrific levels. So unfortunately, in the market that we’re in, you have to play the game. But in order to play the game and play it successfully, you need to know where your breakeven points are.

“It’s futile to work for nothing or for it to cost you money. I’m sure we’ve all done jobs like that…but at this particular time, we’re seeing margins drop and GP (Gross Profit) levels below 10 percent, and that’s just completely unsustainable.”

Sacrificing your bottom-line, just to keep your staff busy, could hamstring your business, says Tony. He worries that electrical contractors may be unaware of the long-term impact that this could have.

“It’s a flawed strategy right from the get-go. I think things are going to get a lot harder before they get it easier.

“The key to survival is you need to know what your bottom dollar is and don’t give anything away. Try to sell to your strengths and deal with customers (who understand) price isn’t everything. You really need to look at your sales model and work with people that you’re close to and who will support the high-quality services you’re offering.”

Sales models and marketing

With face-to-face contact reduced, John has used this as an opportunity to evaluate his organisations sales model, while shifting his marketing spend to target more cost-effective streams.

“We’ve made some significant changes, mainly through our sales model. Our traditional method of going to see every customer face-to-face, talk to them, do the sale, is definitely the best way to close a deal and has very high conversion rates. However, it’s not practical in the current COVID-19 environment.

“In our business, there are some regions that aren’t as profitable as other regions. We’ve taken this opportunity to really look at the regions that make the most profit. In these regions our staff will see the customer face-to-face. In less profitable regions we’ll deliver a lighter service, so we’ll sell over the phone.”

Encouragingly for John, he’s been able to maintain his marketing spend, by targeting more cost-efficient channels.

“I haven’t reduced any marketing. I’m still spending the same amount of money, but going about it a lot smarter, using the channels that are cheaper to run. Instead of running one or two ads, I’ll be running 20 ads at a lower spend. It’s targeting the best markets, the best regions and the best customers.”

While operating in a different segment of industry, Tony also shared a similar view on the need to ramp up marketing activity, to maintain a strong pipeline during the current environment.

“We’re going to become a lot more active, contacting existing customers and potential new customers in the industrial space. Everything we do is mainly through referral, we’ve got a good, strong list of industrial customers. They’re all a little bit quiet at the moment, but they’re all looking at a really strong back half of the of the calendar year. It’s a matter of responding to those opportunities as they come.”

Developing your own strategy

As a business owner, planning your own strategy is an integral part of running a profitable and sustainable business. When it comes to setting your own strategic plan, John says “You do need to know it. You don’t have to be the expert, but you need to have people who give great advice.”

That’s where the Master Program comes in. A program developed from 82 years’ experience of determining the key pain points and key opportunities for electrical contractors.

With 36 touchpoints over three years, John believes “The Master Program is the single best thing we’ve ever launched. It enables electricians to grow [by] doing an audit of their business and building a strategy from that.”

MEA will work with you to ensure every element of your business is operating at the optimal level, so you can run a safe, profitable and sustainable business.

For electricians who are serious about growing their business, John says the Master Program can help you avoid the pitfalls other contractors face. “As you grow your own business, you don’t know what you don’t know. You think you’ve got it covered, then you just get things that come in from the side, that are like ‘wow, I didn’t see that coming!’ MEA’s Master program takes you through all the different steps that you might be missing.”

To view the trusted advice, guidance and exclusive access to industry leaders that you’ll receive as part of the Master ProgramClick Here

Every month, we’ll work with you to implement business tools, processes, procedures and systems so you can take your business to the next level.

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