The $195,000 lesson and how employee theft nearly destroyed a growing business

Boxers & Briefs Podcast #39: “They stole over $195,000 from my business” with Sam Martin – First Point Electrical

When Sam Martin founded First Point Electrical in September 2009, he never imagined that fifteen years later, he’d be sharing a story about discovering over $195,000 in employee theft. The musician-turned-entrepreneur built his Auckland-based electrical business from a desk in his bedroom, growing it into a successful operation servicing residential and commercial clients across Central and West Auckland. But like many business owners, Sam learned that success brings not just celebration, but also challenges that test your resilience, judgment, and ability to trust again.

From rock star dreams to electrical entrepreneur

Sam’s journey to business ownership began with a family legacy. His father owned fashion stores throughout the Wellington area during the 1990s, instilling in young Sam the entrepreneurial spirit and the understanding that a business could be as big as you wanted it to be—or as big as you were willing to work for it to become.

However, Sam also had a deeply innate talent for music. His older brother had already pursued the musician’s path, much to their parents’ stress and worry. When it came to Sam’s turn, his parents delivered a clear message: get a trade. Someone had to save the family from the uncertainty of the music industry.

Sam chose electrical work because it sounded the most interesting and, frankly, the cleanest option compared to plumbing or building. But he never abandoned his music dreams entirely. Throughout his twenties, Sam performed as MC Mass, MCing and rapping to hip-hop and drum and bass music across New Zealand.

At 25, the collision between his two passions created First Point Electrical. Sam’s band had landed a significant gig—they were playing support for Grinspoon and Kora at Freshfest in Australia. But his employer at the time wasn’t enthusiastic about Sam’s music commitments, making it difficult to get time off.

On the way to the airport, Sam called his boss and quit. He was off to be a rock star and didn’t need the job anymore. The band competed in Australia, and remarkably, the four New Zealanders won the competition. Sam was convinced stardom awaited. When he returned to New Zealand, reality set in. Sam needed work, but he was determined to only do electrical work for himself going forward. First Point Electrical was born from that trip back from Australia, starting literally from Ground Zero.

Building something bigger than yourself

The name “First Point” was deliberately chosen. A wise mentor had advised Sam not to put his own name on the business if he ever wanted to sell it, as personal names can be limiting. Sam wanted a name that could represent one person or thirty people—you wouldn’t be able to tell the difference. At 25, with just a desk in his bedroom, the name made his one-man operation sound bigger than it was, which suited his ambitious nature perfectly.

Over fifteen years, First Point Electrical grew steadily. Sam experienced several “pinch me” moments along the way. Landing major jobs like the Takapuna Library super complex and Reading Cinema, where pricing suddenly reached six figures, provided early validation. Standing outside the workshop area one day, seeing his truck and four vans parked with his team loading equipment, Sam thought about how this entire operation had emerged from something he’d dreamed up on a plane and set up from his bedroom corner.

Other milestones followed: generating over one million dollars in revenue in a year, becoming the number one purchaser at his supplier, going from apprentice to the business owner buying the most stock. These achievements came quietly, without bells ringing or fanfare. Sam would look at financial statements and realise he’d crossed another threshold.

“I think it’s important to celebrate those moments as well because otherwise they can just fly by,” Sam reflects. “If you don’t stop and acknowledge them, you’ll end up just focusing on the next challenge without appreciating how far you’ve come.”

The business also benefited from regulatory changes. When the Healthy Homes legislation came into effect a couple of years ago, requiring tenanted properties to reach certain compliance levels for heating and ventilation, First Point’s business changed dramatically. Property managers who previously spent minimal amounts on small repairs suddenly became major spenders, investing thousands—sometimes up to $5,000 per house—for ventilation fans and heat pumps.

This positive pivot required restructuring the entire business operation—the specific stock they kept, the training staff needed, and the logistics of managing hundreds of properties. It was a drastic change that dominated operations for two to three years, and whilst the initial rollout has slowed, Healthy Homes compliance remains a significant part of the business.

The discovery that changed everything

Amidst the growth and success, Sam made a discovery that would shake the foundations of everything he’d built. An employee had been stealing from the business—not just taking petty cash or supplies, but systematically defrauding the company of over $195,000.

The realisation came through careful attention to financial details. The bookkeeper—an external professional managing First Point’s accounts—noticed irregularities and brought them to Sam’s attention. What began as questions about unusual transactions evolved into a comprehensive investigation that revealed the stunning extent of the theft.

The employee had been exploiting their position and access to company systems, creating fraudulent transactions and siphoning money over an extended period. The sophistication of the scheme and the duration it went undetected demonstrated both the employee’s calculation and the vulnerabilities in the business’s financial oversight.

For Sam, the discovery was devastating not just financially, but personally. Building a business requires placing trust in team members. You expect people to do the right thing, just as you wouldn’t expect a partner to cheat on you. The betrayal cut deep, challenging Sam’s fundamental beliefs about people and business relationships.

The aftermath: legal action and recovery

Once the theft was confirmed, Sam faced difficult decisions about how to respond. The obvious path was legal action, but pursuing justice through the courts involves significant time, emotional energy, and additional expense—resources that small business owners can ill afford to divert from running their operations.

Sam chose to pursue the matter legally, understanding that allowing such significant fraud to go unchallenged would set a dangerous precedent. The case proceeded through the justice system, requiring Sam to relive the betrayal repeatedly through statements, evidence gathering, and court proceedings.

The financial impact was substantial. Losing $195,000 would challenge any business, but for a growing trades company operating on typical industry margins, it represented a massive setback. The theft had occurred during a period when Sam believed the business was performing well, meaning the financial statements he’d been reviewing and making decisions based upon were fundamentally compromised. Beyond the immediate financial loss, Sam had to consider the broader implications. How had the theft gone undetected for so long? What weaknesses in his systems had allowed it to happen? How could he prevent similar situations in the future? And perhaps most challenging: how could he continue trusting employees when trust had been so thoroughly violated?

Rebuilding trust and systems

The experience forced Sam to completely re-evaluate his business’s financial controls and oversight mechanisms. The role of the external bookkeeper proved crucial—their professional eye caught what internal processes had missed. This validated Sam’s decision to invest in quality accounting support rather than trying to manage everything himself.

Sam also had to work through the emotional and psychological impact of the betrayal. Trust isn’t easily rebuilt after such a violation, and the temptation to become overly controlling or suspicious of all employees is strong. Yet business success requires delegation and trust. Finding the balance between appropriate oversight and paranoid micromanagement became an ongoing challenge.

The experience reinforced several lessons Sam had learned throughout fifteen years of business ownership. First, having proper systems and foundations from the beginning matters enormously. Sam acknowledged that early in his business journey, he’d taken shortcuts—doing invoices on Word documents rather than proper accounting software, for example. Whilst this worked temporarily, it created habits and systems that weren’t scalable or secure.

“Set up the foundations correctly from the start,” Sam advises now. “Get a great accountant, get your Xero set up properly, jump straight into a job management system. It’s going to be so much more work to fix everything later. Think about what you’ll need in five years, not just what you need now as a one or two-person operation.”

The people factor: hiring for excellence

The theft experience also sharpened Sam’s perspective on hiring. Before the incident, he might have been more casual about bringing people onto the team. Afterwards, his standards became significantly more rigorous.

Sam’s current philosophy is clear: don’t hire someone just because they’re available and willing to take the job. Wait until you find someone genuinely excellent, even if they’re harder to find. Quality employees might be scarce, but once you find them, they’re worth the wait.

He also emphasises playing to people’s strengths. Everyone has areas where they excel and areas where they struggle. The key is identifying what each person does amazingly well and positioning them to use those talents. This approach not only maximises productivity but also tends to increase job satisfaction and loyalty—creating a team culture where theft and fraud become less likely.

Currently, First Point Electrical has nine team members, and Sam plans to double that size. But this growth will be careful and intentional, with each hire scrutinised for both technical competence and cultural fit. The business now has clearer management structures, with plans for a full-time estimator and operations manager as the team expands.

The value of external accountability

One of Sam’s strongest recommendations for business owners is getting external accountability and guidance. He’s been part of Profitable Tradie, a business coaching programme specifically for trades businesses, for eighteen months. Whilst acknowledging it’s expensive, Sam credits the programme with changing the structure of First Point’s business systems and processes.

The coaching programme forced Sam to dial in specific, measurable goals rather than vague aspirations. His current vision is crystal clear: reach five million dollars in revenue with a 15% net profit within the next five years. He’s interested in franchising the business, potentially becoming another Laser Electrical or Geoff’s Electrical. He’s even set a timeline for potential exit, considering selling the business by age 50, giving himself another ten solid years in the industry.

These specific targets aren’t just numbers pulled from thin air—they’re carefully calculated goals based on industry benchmarks, company capacity, and market opportunities. Having this clarity helps Sam make better decisions about investments, hiring, and strategic direction. It also provides objective measures for success beyond the subjective feeling of “doing well.”

The external accountability also proved valuable during the theft crisis. Having advisors outside the business provided perspective and guidance during an emotionally charged situation. They helped Sam think through responses systematically rather than reactively, considering both immediate actions and long-term implications.

Warning signs and prevention strategies

Whilst Sam’s experience was particularly severe, employee theft affects businesses of all sizes across all industries. Understanding common warning signs and implementing preventative measures can help protect your business from similar situations.

Financial irregularities are often the first indicator. Transactions that don’t quite make sense, unexplained discrepancies between inventory and sales, or unusual patterns in accounts payable or receivable all warrant investigation. In Sam’s case, the external bookkeeper’s professional eye caught what internal processes missed, highlighting the value of having qualified financial oversight.

Preventative strategies include implementing proper financial controls with clear separation of duties. No single person should have complete control over financial transactions from initiation through to completion. Regular audits—even informal ones—can deter potential fraud by demonstrating that oversight exists. Digital accounting systems like Xero or MYOB create automatic audit trails that make fraudulent transactions harder to hide.

Background checks during hiring, whilst not foolproof, provide another layer of protection. Reference checking should go beyond perfunctory calls to previous employers, digging into specific details about the candidate’s integrity, reliability, and handling of responsibilities.

However, Sam’s experience also demonstrates that even with reasonable precautions, determined individuals can find ways to exploit systems. The goal isn’t to create a paranoid, trust-free workplace, but rather to implement reasonable safeguards that protect the business whilst maintaining the positive culture necessary for growth and success.

Looking forward: growth with wisdom

Despite the devastating experience of employee theft, Sam hasn’t lost his entrepreneurial optimism or his willingness to trust and grow his team. The experience has made him wiser and more cautious, but not cynical or paralysed.

First Point Electrical continues expanding, now focusing not just on traditional electrical work but also significantly on heat pumps and air conditioning—the “third pillar” of the business. The healthy homes compliance work continues providing steady revenue, and Sam’s reputation for quality service and expert knowledge keeps attracting new clients across Central and West Auckland.

The business recently celebrated fifteen years of operation and launched a fresh new website. These milestones represent not just longevity but resilience—the ability to survive setbacks, learn from mistakes, and continue building something valuable.

Sam’s advice to aspiring business owners reflects both his natural optimism and his hard-won wisdom. He encourages people to pursue their entrepreneurial dreams, to set up proper foundations from the beginning, to invest in quality people and systems, and to seek external guidance and accountability. But he also acknowledges the challenges, the setbacks, and the moments of betrayal that inevitably occur.

Lessons for business owners

Sam’s experience with employee theft offers several crucial lessons for business owners across all industries:

First, invest in proper financial systems and oversight from the beginning. The cost of quality accounting software and professional bookkeeping services is minimal compared to the potential losses from fraud or even just poor financial visibility. These systems also make legitimate business operations more efficient, providing returns beyond mere fraud prevention.

Second, external professional oversight matters enormously. Having an external bookkeeper or accountant provides not just expertise but also an independent perspective that can catch irregularities internal staff might miss or overlook. This professional distance can be invaluable for identifying problems before they become crises.

Third, hire carefully and intentionally. Wait for excellent people rather than filling positions with whoever’s available. This patience might slow growth temporarily, but creates a stronger, more trustworthy team long-term. Good people are worth the wait, both for what they contribute and for the problems they prevent.

Fourth, maintain perspective and resilience. Sam could have allowed the theft to embitter him or cause him to abandon his business dreams. Instead, he processed the experience, learned from it, implemented better systems, and continued building. This resilience—the ability to survive setbacks without losing sight of larger goals—distinguishes successful entrepreneurs from those who give up.

Fifth, celebrate your successes along the way. Sam’s reflection on the importance of acknowledging milestones resonates especially given his challenges. When you’re constantly dealing with problems and setbacks, it’s easy to lose sight of progress. Taking time to recognise achievements provides both motivation to continue and perspective during difficult periods.

Finally, seek external guidance and accountability. Whether through formal business coaching programmes like Profitable Tradie or informal mentoring relationships, having advisors outside your business provides invaluable perspective. They can offer guidance during crises, challenge your thinking during planning, and help you maintain focus on long-term objectives rather than getting lost in daily operational details.

The ongoing journey

Sam Martin’s journey from musician to electrical entrepreneur, from bedroom startup to million-dollar business, from theft victim to resilient business owner demonstrates that entrepreneurship is never a straight path. Success involves not just the victories and milestones, but also how you respond to betrayals, setbacks, and challenges.

The $195,000 theft could have ended First Point Electrical or at minimum, severely curtailed its growth and Sam’s entrepreneurial ambitions. Instead, it became a painful but valuable lesson in business systems, people management, and resilience. The experience forced improvements to financial oversight, clarified hiring standards, and ultimately contributed to building a stronger, more sustainable business.

For other business owners, Sam’s story serves as both a warning and encouragement. The warning: employee fraud happens, even to conscientious owners of successful businesses. Proper systems and oversight aren’t paranoid overcaution—they’re prudent business practice. The encouragement: significant setbacks don’t have to mean business failure. With proper response, support, and resilience, you can survive even devastating betrayals and continue building something valuable.

As Sam continues working towards his vision of a five-million-dollar business with potential franchise opportunities, he carries both the optimism that launched First Point Electrical fifteen years ago and the wisdom earned through challenges along the way. That combination—ambition tempered with experience, trust balanced with appropriate oversight—creates the foundation for sustainable long-term business success.

The journey from bedroom desk to successful electrical business, through employee theft and recovery, continues. Sam remains committed to building something bigger than himself, creating jobs, serving clients, and contributing to Auckland’s electrical services industry. The theft was a chapter in the story, but not the ending—just another challenge overcome on the path to greater success.

To learn more about First Point Electrical or to connect with Sam and his team, visit https://www.firstpoint.co.nz. The website showcases their services across residential, commercial, and heat pump installation throughout Central and West Auckland.

This article and podcast is proudly brought to you by Gilligan Sheppard, the problem solvers in business who believe in thinking differently.