Dan Palmer dominates the Quad Cities market as the CEO of Tri-City Electric, the largest electrical contractor in Western Illinois. Mr. Palmer spoke to 35 students and staff that attended his presentation yesterday at Monmouth College.
Dan was born in Moline and is connected with area in numerous ways as its native son. His sister is on the faculty at St. Ambrose, he attended Moline High, Blackhawk College and then Monmouth College. Dan’s father was also an electrical contractor in the area so Dan learned at a very young age some of the skills of an entrepreneur. He started working part-time for his father at 12 years old and full-time at 22 as a jack-of-all-trades. He became Vice President at 26, President at 29, and bought the company in 1985 as its CEO and owner.
He always wanted to be the best and believed in the power of marketing. His girlfriend’s mother inspired him by saying: “Dan will never amount to anything”. His chief competitor said”Dan was never much of an electric apprentice, so he will eventually fail”. Neither prediction came true. Dan now manages over 400 electricians and a full-time staff of 60 professionals and is approaching $75 million in annual business.
When Dan purchased the company from his father in 1985, the market was dominated by union shops. There were about 20 union shops in those days compared to only 10 non-union. The tables have turned and in 2011 Tri-City is the last big union shop (although he competes with 8 other union competitors and 15 non-union contractors).” My break-even cost to dispatch an electrician is $54 an hour and I have to figure out how show value against the non-union guys who can make money charging $25 per hour. It takes more than smoke and mirrors to do that. You have market the quality of the training they (electricians on his crew) receive, that Tri-City does things right the first time and that our customer service is second to none.”
Mr. Palmer believes in thinking outside the box. He is not afraid to make mistakes when there is a good reason to try something. He is proud of his staff, marketing and customer service which has helped Tri-City keep its prestigious clients such as John Deere, Alcoa, CAT, and Family Dollar, while satisfying the small to mid-sized customer with his guaranteed project pricing and skilled financial help. He is usually the first to try new things and pursue new revenue streams. CAD systems were the early example where Tri-City distinguished itself as a leader of the pack. Dan has been successful helping television stations convert their analog systems to High Definition, connecting wind farmers to the electric grid, thermo-scan technology to detect “hot-spots” and create efficient energy solutions for his clients. The biggest growth areas are wiring everything for the internet. It is our fastest growing segment.
“I surround myself with the best people I can find and train. The effort to go from good to great is tied to people recruitment and management. I spend a lot of time making sure our team is first rate. I use to “wing-it” on personnel decisions but it only took a few mistakes to start doing extensive background checks and involving several key people in every hire. We are always looking to help our people upgrade and that creates opportunity. When you grow you have to be developing leaders all of the time.”
“I want to be the first to market so I am constantly watching what is new and innovate. When you build for first rate companies as a sub-contractor you compete against the best. That level of competition drives someone like me. This is the Tri-City culture behind Confidence Delivered our tagline and company mantra. I had a staff member in tears yesterday because she said Dan, I don’t know what to do on this job, and there have been a few minor mistakes and big problems from the other sub-contractors being late. How can I face our client with confidence delivered?”
Did Dan make mistakes? “Yes, and I paid dearly for that education.” He bought a large Des Moines contracting business only to find that its clients were shaky and there were faulty systems, embezzlement, and other improprieties. “I should have cleaned house.” But he tried to correct the systems and spent millions to make things right. It wasn’t enough. It was my costliest lesson to-date. I think twice before I expand. It has to have similar culture and systems. Without those characteristics I would prefer to grow my business organically as I have done in the Quad Cities. You can’t argue with Dan, he invested millions in Quad Cities talent and turned his team into a money machine with annual turnovers of $75,000,000.