Bruce Janczak didn’t intend to become the owner of 36-year-old Best Electric in West Allis when he answered a Craigslist ad for a master electrician. But when the current owner saw Bruce’s background, he offered to sell the business. That owner, an accountant rather than an electrician by trade, was eager to move on to a different business venture.
Bruce became general manager in 2016, and soon discovered the business was facing financial difficulties: “Not crashing, but coming in for a landing,” Bruce said. He sought help from the SBDC at UW-Milwaukee, where Cheryl Mitchell is a consultant. She recalled, “He came to me wanting to know what changes he could make to improve the financial position of the firm. He had the knowledge to run the company, and when it became clear the owner was ready to sell, we started talking about options.”
Bruce was concerned about his ability to get financing due to a previous bankruptcy. “I knew I could do this—I’ve done it. I have the entrepreneurial spirit and the energy and the people skills,” Bruce said. “But Cheryl helped me get over my doubts and fears about taking the risk.”
Seller financing solved “bankability” issue
Bruce initially intended to approach the Wisconsin Women’s Business Initiative Corporation (WWBIC) for financing. Cheryl said, “That made sense to him given how traditional lenders might view him because of the failure of his previous company.” Cheryl and Bruce worked on financial pro-formas based on Bruce’s projections of Best Electric’s growth under his management. “Interestingly, the current company’s operations just kept getting better,” Cheryl said. She and Bruce had to keep revising the forecasts based on Best Electric’s improving performance.
Still, there were challenges to overcome: “Lenders worried about the assets of the business—its computers and trucks were quite old,” Cheryl said. Bruce shifted to seller financing to keep the project moving. “I’d planned on only a small contribution from the lender, “ Bruce said, “but the historical performance and low asset value told me I needed to find other financing.” Cheryl worked with both men on the transaction, which involved a business plan and detailed financial projections, including strategic investments in the business.
Cheryl said, “Bruce set a course to profitability, then worked that course by streamlining the processes for completing technician paperwork, assigning techs to jobs, setting up trucks, and ordering raw materials. All that has cut out a lot of administrative costs.”
Accomplishments with the SBDC at UW-Milwaukee:
- Business planning
- Seller financing
- Succession planning
Marketing with name recognition and reputation
To market the business, Bruce has worked to join his personal sports brand to the Best Electric brand. His advertisements on local sports radio mention Bruce has been involved in youth sports for 44 years.
But satisfied customers are the best marketing tactic, Bruce has found. He focuses on delivering exceptional service: “We take care of people. The number of referrals we receive is staggering. I’m out to prove people wrong about contractors,” he said. That focus on excellence begins even before an electrician arrives for a service call: the technician phones to notify the customer that the truck is on its way and the truck is already loaded with commonly needed materials so most customer problems can be solved quickly on that first visit.
Bruce’s son Nate, who had worked as an electrician for Bruce during college and went on to a position in financial services, came to work at Best Electric to fill in during an employee’s vacation. He has stayed on to assist his father in their rapidly-growing business. Their next concern: preparing Nate to eventually step into Bruce’s shoes as Best Electric’s owner.