Full transcript8 chapters · 7,906 words
00:00From $1M third-generation plumbing shop to $31M in Akron
John Wilson: The next three or four months I was sued four or five times in like just on repeat this lawsuits kept showing up, kept showing up, kept showing up and we’re just like what is going on and we find out our accounting team misplaced around $800,000.
John Wilson: So that was probably the worst. I was sued eight times before my birthday of 2024.
Narrator: Welcome to Profit and Grit with Tyler, where blue-collar owners and insiders spill the real story behind their hustle, building businesses that thrive through sweat and smarts. We’ll dig into their journeys, from scaling chaos to growing the bottom line, with lessons and grit that pay off big.
Narrator: Here’s your host, the blue collar CFO, tyler Martin.
Tyler Martin: Today’s guest, john Wilson, has one of the most remarkable growth stories in the trades. In less than a decade he’s taken his third generation plumbing business from $1 million to over $30 million in annual revenue. He’s done it through a mix of gritty turnarounds, strategic acquisitions and relentless focus on sales.
Tyler Martin: We get into his lowest moment, including the time an $800,000 accounting mess nearly brought the business to its knees, and how he fought through it. We talk about hitting those. We’ve made it milestones, building a leadership team that runs without you, and why $100 million is just the next step, not the finish line.
Tyler Martin: Hey, john, welcome to the Profit and Grit Show. How are you doing today? I’m doing great. Thanks for having me on. Yeah, great to have you. I hate to sound like a fan boy out the gate, but I guess I will. I listen to your show all the time A lot of really great wisdom that you always share your stories, your guests.
Tyler Martin: So I just want to start out there with owned and operated is how I know of you and I just have the utmost respect for you.
John Wilson: Awesome. I’m glad you’re getting some value out of it. It’s a fun hobby that seems to help a lot of people yeah.
Tyler Martin: I think you passed up with the, with the in-person studio. You may have passed up the, the hobby part of it.
John Wilson: I passed hobby. Yeah, I might’ve, I might’ve.
Tyler Martin: It sounds like those wheels are spinning man. In terms of the opportunity, here is what I’m seeing, but good for you. So, hey, what I’d love to start out for. The audience that doesn’t know about you, which I’m sure very few, Tell me a little bit about what you do and your story.
John Wilson: Yeah, so I’m John Wilson and I’m a plumber from Akron, so I have a plumbing company. It’s a third generation family business called Wilson Plumbing and Heating and we’ll do around $31 million this year. We bought it eight, nine years ago and we were doing a million dollars at the time, so we’ve had a tremendous growth story so far.
John Wilson: We’ve used a lot of M&A in order to get there. We’re all self-funded, so, you know, internally owned, and we’ve also, you know, just learned how to run a great business. So over the past I used M&A basically to cross into eight figures, into the $10, $11 million mark, and then from then on so really the past two, three years we’ve been purely organic growth Cool.
03:16Nine acquisitions and 30 to 105 employees in 130 days
Tyler Martin: So let’s start there. Frame this for me I’m sure you had a really down moment as you’re going through all this growth, and probably maybe even your worst moment. Can you share that Like did you ever hit a wall? I’m sure it wasn’t all roses and sunshine.
John Wilson: Yeah, I think I mean there’s a few that come to mind. I mean, you know, there’s an earlier one there’s probably like three big moments in my career where it’s like, is this going to work? And one of them was actually like not even that long ago, it was probably just about two years ago and we had an accounting department and when we we bought all these businesses uh, we bought nine businesses over the years and we bought three of them in 2021.
John Wilson: And when we bought those, we grew from 29 employees, I think, or 30 employees, to 105 in like 130 days. So it was obviously a lot. And during that time, we only had 30 employees when we started. So, like, aggressively growing very fast.
John Wilson: So what that meant was we didn’t have a good accounting team. We didn’t have a good HR team. We didn’t have a good HR team. We didn’t have a good a lot of teams because, like, how could we? We had 30 people. You know contrast that today we have 152 people on that team.
John Wilson: So all of those teams are good, but but at the time, even just two years ago, you know, we were, we were running a gun and trying to figure out how to grow an accounting team, and I’m not even picking this as the worst moment because you have CFO made easy on your shirt.
John Wilson: It literally just was the worst. So at the end of 2023, my brother died, and so I wasn’t in a great frame of mind. In the middle of while I was working through that, my accounting team basically lost $800,000 worth of bills. Wow, so I’m not in a great frame of mind.
John Wilson: We had actively merged four businesses together, which means we merged four QuickBooks files together. It was a very complicated transaction and in the process, I had not upgraded my accounting staff to be able to support that type of transaction, and in the process, I had not upgraded my accounting staff to be able to support that type of transaction.
John Wilson: I did bring in external experts to help us, but they did a very bad job and we’ve had to pay multiple six figures now to fix it. But in that process, we disconnected a few things and they basically misplaced roughly around $800,000. So, uh, it’s on on one hand, it’s a lot of money and on the other hand, it’s like not that much money but it’s a lot of money when you’re growing at the pace you are in.
John Wilson: The balance sheet was still like getting stabilized from acquisitions. So so my, my brother passes away, uh surprise, uh, you know he was a young guy, had a heart attack. And then the next three or four months I was sued four or five times in like just on repeat this lawsuits kept showing up, kept showing up, kept showing up and we’re just like what is going on and we find out our accounting team misplaced around $800,000.
John Wilson: So that was probably the worst. I was sued eight times before my birthday of 2024.
Tyler Martin: Wow, so you know, just to dig a little deeper, I mean, were you really like at a point, like man, because you kind of seem like a fighter to me Were you really serious, like hey, I’m not sure if I want to do this Like, is this all worth it?
Tyler Martin: Were you, was that really a strong emotion, or was it more like just one or two days?
John Wilson: You were kind of like this sucks, and I’ll wipe off my knees and figure it out. Well, I mean, it was a lot there was a few moments where we thought we thought we were going to go bankrupt, Like for sure. We went from a positive earnings to a negative, a negative, like basically overnight it was a total shock.
John Wilson: We had vendors banging down the door and we didn’t really know what we were supposed to do in that moment. Like we had vendors banging down the door and we didn’t really know what we were supposed to do in that moment, Like we had no idea.
John Wilson: You know, we had low moments, but that was a pretty tough one. So we ended up. I mean, obviously we ended up getting through it, but in a fight or flight I tend to fight, yeah, so we did do it, but I mean it was dirty.
Tyler Martin: Yeah. What was your takeaway from that? Did you just try to bite too much at once? Is that the takeaway?
John Wilson: No, it was clean accounting, like that was the takeaway I had. It was really just like, pure and simple, there should have been more eyeballs on this. So, like the way that we think about this now because, like the downside, it ended up being a twofold problem.
John Wilson: So, on the one hand, like hey, we have a, this is a balance sheet issue, right, like we have an undisclosed liability of nearly seven figures that we now have to handle and it’s a surprise.
07:56Why it hit the P&L and the balance sheet at the same time
John Wilson: So that’s the balance sheet problem, and that is a big enough problem in and of itself. The more complicated problem is it was also a P&L problem because suddenly we had $800,000 of expenses that we didn’t know existed. So we thought we were running at X gross margin and we weren’t.
John Wilson: We thought we were running at this material and we weren’t. So all of this expense came out of nowhere. So we had to reformat the business to run it basically 20 points higher, because we didn’t know that was happening. So it was a P&L and a balance sheet turnaround, which is hard.
Tyler Martin: John, were you all like did this event of you know, having this unrecorded liability and dealing with the financial changes did? Were you always comfortable with the balance sheet and financial and the income statement at that point? Or was it like, oh man, I’ve got to immerse myself in this now and become a higher level I don’t know about an expert, but a higher level where you really understood it?
Tyler Martin: Because what I see a lot of times business owners. As we’re growing and building a business, financials are an afterthought. We’re looking at cash, cash and bank and you mentioned balance sheet and probably 50% of business owners don’t even really know what that is, maybe even higher than that.
John Wilson: Yeah, I would maybe call myself an expert now, but before then I was strong Like that was. I didn’t finish college, but the college that I did attend was for accounting, so I was very comfortable around all that. What made it complicated was the merging the four different QuickBooks files into one singular file and things getting basically disconnected in the process and us just not catching that disconnect.
Tyler Martin: Plus, I would assume now you go from 30 to 100 people.
09:40Who’s watching the watchers on accounting and HR compliance
Tyler Martin: That’s a lot of moving parts, like that’s a lot of culture change.
John Wilson: Yeah, when there’s always a bigger fire like that, that ended up being what it was. You know, like HR is a fire, accountings, you know, and you sort of just like band-aid those together because, much more importantly, like hey, sales is a fire, this trade’s a fire.
John Wilson: Like I got to recruit over here, I got to fill this team, so there was always just a bigger fire. So the way that we think about like our support teams now to sort of like what the lesson learned was a lot of eyeballs, a lot of redundancy, including external.
John Wilson: So I’m not intentionally plugging again the shirt you’ve got on, but like we are a big fan of, like who’s watching the watchers? I’ve most friends, that of mine that run a big business have been taken for a million dollars or more. Wow, so what’s your audit process?
John Wilson: Like what’s your close process? Like how tight is it? And that’s for accounting. But also like HR, like who’s who’s confirming that you’re compliant, because HR is becomes a whole situation after a hundred and I think we had no idea what we had built.
John Wilson: Like we didn’t know if we were and nobody does, and everyone thinks they’re compliant, and then you find out you are not in the ballpark.
Tyler Martin: Wow, Wow, hey, one, one question I’ve always been curious about since you acquired this business through I believe it was your grandparents have you always had the support, Because I’m sure that your family was kind of maybe set in a certain way in terms of seeing the business for a long time and being at a certain size have they always been very supportive of all this growth and ambition and changes?
Tyler Martin: I mean, I’m sure it’s easier now than it was maybe when you were going through the mergers and things weren’t going your way have they always been really supportive or they’ve been like man? Why are you taking all this risk?
John Wilson: Yeah, the latter. My family preferred the business small, so it ended up my dad. We did the transaction in two different steps. So the first one, I bought 49% in 2016 and in 2019 I bought another 49%, and it was because of that exact issue.
John Wilson: I was ready to take on more risk, I was ready to scale the business a little bit more aggressively and he was not, so I bought out sort of the rest.
Tyler Martin: Got it Cause you see that so many times, even in my own life. When I went out to business for myself, you know my dad, long time blue collar worker, was like dude, you’re crazy, you’re making X, y, z at this company. You’re going to leave it and go make nothing.
Tyler Martin: You’re insane. And so it wasn’t. It’s interesting how, you know, different generations have different perspectives and it’s sometimes hard to get those to connect.
John Wilson: Yeah, I think, uh, you know it’s easy now, yeah, it’s easy now to look at it and people be like, oh yeah, like you did it, you’re successful, you’re uh, whatever. But like sure, yeah, there’s 150 people, it’s a big freaking business. Like, yeah, totally makes sense.
John Wilson: But on the way up, I saw it, my wife saw it.
Tyler Martin: Yeah, yeah, that’s cool. Okay, I want to flip the script now.
12:32Wanting to be a millionaire at 30 and never being the key man
Tyler Martin: So we talked about kind of the bad. Let’s talk about where did you hit that point where you go oh my gosh, I’m not a plumbing company anymore, I am like a real operation that’s got real scalability. When did that? When did that hit?
John Wilson: you. I think that hits me often. I think, an important thing to note. So I bought the business. I was very young and I was 25. And my original goal for the business was, by the I want I had five years. I said, hey, I want to have the option to sell this business when I’m 30.
John Wilson: At the time, like the fat this was nine, 10 years ago the fat fire movement was like a thing and like everyone was like what’s the least amount you can retire with? And I was like, well, if I sell this business in five years, I think that I can be a millionaire by the time that I’m 30.
John Wilson: So it was really like everything was designed to personally make me a millionaire by the time I was 30. So I started, which I think is a really important distinction, because a big part of the reason that we grew and the reason that all this happened is I made sure to never make myself that important of a piece, because a saleable business can’t have an integrally tied owner.
John Wilson: That’s just like one-on-one. So from the beginning I always thought it was a scalable thing and that was always the plan. So we did it and it’s easy now to look back and be like nice job. And I was like, yeah, that was you know, that was we.
John Wilson: I did what we said we were going to do. So I always thought that I think, as the business grew bigger and bigger, like there’s been different moments of that. So sometimes it’s a revenue goal like oh man, we did a million dollars in a month.
John Wilson: That’s crazy, that’s cool. We’ve started doing like more revenue in a month than I used to do in a year and like that’s cool. Like last month we did more in revenue than I did in 2018, which like that’s like all right, that’s pretty sweet.
John Wilson: Uh, I think October I hope we do more than I did in 2019. So it you know that those wins start to stack up and that feels pretty real. I’d say the. The biggest like we made it again has been watching our senior leadership team like really, uh, take on like real responsibility and decision-making power, and that’s been something At every stage of your business.
John Wilson: You have to be this different version of you and hopefully a better version of you that the team needs in that moment and in that time period for the business, and I’ve always been hyper aware of that. I’m not saying I’ve done it perfectly or well, most of the time I probably haven’t, but I do think I’ve tended to get the biggest things right and for this current stage and I’ve been in it for like six months now is, hey, what the team needs.
John Wilson: If the team needs to like the senior leadership team, specifically like six, seven people, they need to be able to fully competently run their department without me in any way at all. Like this needs to be a functioning senior leadership team that, like I can coach, I can mentor, I can give input, but then I also need to be able to go on vacation for two weeks and the business be better than it was, which is what just happened.
John Wilson: I just got back, actually Monday, so yeah, so I think like that’s been our most recent, like my president Brandon and I, my partner, he and I have been working together, for this is our sixth year and like we talk about it a lot, like we just like we built this business.
John Wilson: You know I’ve owned it for longer. I did have three years without him, but he and I built this business and we like we watch leaders come and go, we watch people grow and figure stuff out, and like this current stage for both him and I is just so surreal because, like two years ago, like we were functionally running teams and like we were standing up the accounting team from scratch, we were for the third time, we were standing up HR for the third time or fourth time we were building a marketing.
John Wilson: For the third time, we were standing up HR for the third time or fourth time we were building a marketing team. We like we were like really like ingrained and now we’re just not, which is good, like it means that we’re doing our jobs and we’re doing the things that I should be doing.
16:36Where EOS breaks on a six-layer org chart
John Wilson: I, you know how are we driving organic or inorganic expansion? What’s next for the whole organization? So that’s been our most recent like holy shit, I think. I think we made like an enterprise here. There’s 150 people here and they’re driving, which is awesome.
Tyler Martin: Wow, do you guys follow any type of methodology, like an EOS methodology or anything that allows you to bring your teams together, your leadership team in particular?
John Wilson: Yeah, yeah, we’ve been on eos for probably four years. I think it’s helpful. It’s a good way to communicate, good way to report. We like early stages. We’re probably going to move to scaling up here shortly. Like eos seems to struggle, the bigger you get like, yeah, we we’ve tried to roll it more and more and it’s just like it breaks every time.
John Wilson: So we just we stopped and we’re like all right. So we only have four teams like functionally using EOS, and every time we’ve tried full deployment it’s it’s just so cumbersome to the business, it just doesn’t make a lot of sense.
Tyler Martin: But yeah, eos, to your point, scaling up does have more bandwidth, I think, for a larger model that it can support. I think you know EOS is awesome. I would say. In my opinion I’d say $10 million and under. I mean, obviously businesses are different, but generally when it’s kind of like a small one leadership team, I think, with a handful of main players, maybe five to ten, I think it works really good.
Tyler Martin: Once you get more complex than that and it sounds like what you’re experiencing it does get a little bit cumbersome.
John Wilson: I mean we’re a, we’re a six layer org chart. So yeah, it’s a bit much Wow.
Tyler Martin: So it sounds like, in terms of your maturation, you guys have gotten to a point where you’re hands off, you’re in a visionary role, which is awesome. Your president it sounds like probably his leadership team is reporting into him. He’s even gotten each little pod doing its own thing, so it sounds like you guys are at a pretty cool place, what you know.
Tyler Martin: One question I want to ask you, I think we’re just to clarify.
John Wilson: I think we’re at the like platform stage. So, like, now that we’re here, I understand why this is an attractive stage for like for PE. For because it’s okay. We have a. We have a leadership team that’s capable of MNA and organic growth.
John Wilson: We have a robust team. We like this is now a machine. This is not one person driving this Like. This is a machine. The stage that we’re in this year, like the year that we’re having, is are we prepared for what comes next?
John Wilson: Are our standard operating processes dialed? Is our accounting team like high performing? Is our recruitment team functioning and driving the type of recruits at the pace that we need? Are we capable of getting all the leads we can? Can we sell at a high level across a hundred people?
John Wilson: So we’re in this like. Are all of our processes designed to work at three times our size? That’s the stage we’re at this year.
Tyler Martin: Okay, it’s time for Service Scalers Marketing Tip. Your biggest growth killer might be invisible to your customers, but obvious in your marketing metrics. John Wilson shared how he tripled his average ticket by building a repeatable sales process. But here’s the part many businesses miss your marketing has to feed that process with the right leads, that process with the right leads.
Tyler Martin: If your ads website or call center bring in low-quality, low-margin jobs, your team will waste time closing work that barely covers costs and, worse, it can drag down your average ticket and hide the fact that your margins are slipping the fact that your margins are slipping.
Tyler Martin: So here’s an action step Track the lead source for every job and compare it to the ticket size and gross margin. Cut ad spend that produces low value work and double down on channels that bring in profitable customers. This tip is brought to you by Service Scalers, helping home service businesses attract high-level leads that turn into real profit.
Tyler Martin: The link to Service Scalers is in the show notes and do me a favor, tell them. Tyler from Profit Grit sent you. Thanks a lot.
John Wilson: All of our process is designed to work at three times our size. That’s the stage we’re at this year.
Tyler Martin: Got it. One question I have for you that would be applicable to a lot of the people out in the audience.
21:10M&A when you only have $50K of free cash to reinvest
Tyler Martin: They probably have businesses somewhere between one to 10 million. Is M&A like? Is that for everybody? Like, if someone wants to grow, is that what you would say, hey, be looking at M&A. Or what would you recommend if someone’s like kind of stuck in that three to five million range?
John Wilson: Yeah, I think M&A is a tool. So like when you’re this is an answer that I don’t think will satisfy a lot of people but like when you’re between three and five million, really when you’re under 10 million but most like felt most acutely under five.
John Wilson: In order to grow the business, you have to reinvest Right and like what reinvestment looks like for me today? Like we have five some million dollars of EBITDA, like yeah, we can reinvest, like we’re good to go, like let’s go buy 20 trucks.
John Wilson: Let’s like let’s go, we do what we need to do. That is obviously totally different when we’re not dealing with millions of dollars and we’re dealing with $50,000 of like reinvestable free cash. So if I’m a $3 million business and like I had a 10% year and I pay myself a hundred grand, like I have 200 grand and there’s probably some vehicle debt, I probably bought a van.
John Wilson: So really I probably probably have $100,000 to $50,000. And the benefit of M&A is it expands your pool of resources very quickly and you can do it on someone else’s balance sheet. You can go get a SBA loan for little to no money.
John Wilson: It increases your risk exponentially, but you quickly gain access to more resources at a time when resources are slim. So I think it does make a lot of sense. I think you just have to be cautious. Like M&A is really messy and this is like survivor bias, right, like hey, we did it.
John Wilson: So like I guess I can. You know how I would think about it now is different. But we’re about to turn on our M&A engine again and we haven’t bought in years now and I am much more cautious about who and what I buy than I was when I was smaller.
John Wilson: But I also needed to grow when I was smaller, so I was more willing to like take on anything you know, more willing to put in elbow grease, but now, like, if we bring on the wrong deal, it’s just like distracting. So like that’s a super long answer.
John Wilson: But basically, yes, because you don’t have a ton of resources and you the only way to grow is you need more resources. So are you going to sell equity in the business? Are you going to go take out debt? Like, how are you going to expand your balance sheet so that you can keep growing?
Tyler Martin: So a lot of times you’ll hear people will say hey, if you’re going to go acquire a business, you’re better off acquiring a really good business at a good price than an okay business at a lower price. What do you think of that philosophy?
Tyler Martin: Is that born true for you?
John Wilson: No, I think, like margin is inside the dog shit. So if you who’s on the cap table, right? Like if I was a plumber and I was 25, so there was some resources but like not a lot, so I couldn’t afford the beautiful business.
John Wilson: What I could do is like figure it out. So that’s what we did. Like I don’t know that we bought. We’ve done nine deals and I don’t think a single one has been good, like a good, a good business. And I guess like if it was a good business, they would have been bigger, right.
John Wilson: Like I think we’re good business. Like I think we’re a great business, we run a great gross margin, we have high, like we’re good. But I think a better way to put this is all of our deals were turnarounds. So we have become turnaround experts.
John Wilson: So, yeah, that’s that’s the only deal we know how to do. At this point I don’t actually know how to do a well put together business.
Tyler Martin: One thing I see a fair amount of time is I’ll have prospects come to me for my services and they’ll have acquired a business and one even just a couple of weeks ago had I think it was about $800,000 of EBITDA when he purchased it and now, two years later, he’s running at about 200, I think it was 250 to 300K of EBITDA.
Tyler Martin: So he’s running at about I think it was $250,000 to $300,000 of EBITDA. So he’s using almost all of the EBITDA to service the SBA loan and he literally is barely staying afloat. What do you see, because you have so much experience in these turnarounds and just acquisitions, where do you think things are going wrong?
Tyler Martin: When people do acquire a company and, assuming the numbers are real, what I see is they try to do too much too soon. So I’ll kind of feed. What I often see is they’ll try to hire people that are new positions or whatever and they’ll start to eat up a lot of that profit when they’re also trying to service debt and they’re also trying to make a living.
Tyler Martin: Is there any common themes that you see where those acquisitions go wrong?
John Wilson: where those acquisitions go wrong. Yeah, I mean what I tend to see and this is from like a very small sphere of like SMBX, smb, twitter but the people that have tended to struggle like don’t put the first things first. So it’s really, you know, it’s it’s different operating a business than theorizing about operating a business, and you’ll see a lot of people come in and just not pick on the main levers because they came from a corporate background that, like they were an analyst or they were a consultant.
John Wilson: I had actually I did a. I did an interview yesterday with a guy named Ethan and he’s running a power washing company and they just launched it like four months ago and uh, he X, x, not consulting, he was like doing, uh, he was in PE, kind of P adjacent, and he is like personally cold calling and knocking doors and he’s personally doing the sales.
John Wilson: And that is first things first. Like that guy’s going to kill, like he’s going to win, like he understands, like what actually matters in these things is first things first. We have to get the lead and somebody has to sell something. And before we recorded, your question ended up being about M and a, but you you said like hey, I want to talk a little bit about like what’s your best advice for like three to 5 million?
John Wilson: Like the best advice from literally any size to any size is like you need to sell. Like sales is almost the only thing that matters is like what is your sales process? How good are you at sales? And every time I see someone failing in this process it’s almost always tied to like we don’t have a dialed in sales process and I was focusing on something else.
27:47Techs doing $1M each on a $3,000 electric average ticket
John Wilson: So I’m not a sales person that wasn’t my background but like I understand its value and push it hard and prioritize it because that’s what it is. That’s the important thing.
Tyler Martin: I was watching a clip recently from you I think it was even this week and you talked about having technicians on your own staff that are doing seven figures in terms of yeah we have a lot of yeah, we have a lot of field professionals that are doing over a million dollars.
Tyler Martin: How do you do that, like I mean, because that that’s pretty darn good production, like what do you have an?
John Wilson: internal training. Well, you know, you know it’s even crazier is I have people crossing a million year to date this month?
Tyler Martin: Wow, we’re only barely at the halfway point.
John Wilson: Yeah, yeah, we’re just into July. No, it’s great, someone, uh, we have, we have a. We already have one or two across a million, and then we have a few that are going to cross a million, I think, next week. So I mean, that’s sales.
John Wilson: Like that’s exact, that’s exactly it. Like I designed a sales and fulfillment process six years ago that worked, and now it’s a production machine. It’s new for the industry. It was new for the industry. A lot of people have copycatted it, which is great.
John Wilson: I think if more people do it, the industry will be better, and so people have taken a lot from our show, which is awesome. So, yeah, we started this, we built this process in order to sell more and we have an above average ticket.
John Wilson: It’s shocking for most people in the industry when they hear it, and our production per employee is very high because of it. In the two trades that we do this sales process in but yeah, that was it Three years ago we’re like how do we sell more?
John Wilson: Okay, well, let’s do this, let’s experiment, let’s try this, and then we just built on the back of that. But that was putting sales first.
Tyler Martin: John, do you, do you mind sharing that average ticket? It’s kind of a teaser there. Yeah, yeah, not know it.
John Wilson: Yeah Well, yeah, so for plumbing and electric plumbing tends to be more like what the hell electric’s crazy. Like electric we have over a $3,000 average ticket. Industry average is like a thousand, maybe 900 bucks. So we’re about three times the industry average.
John Wilson: Uh, plumbing it fluctuates obviously, but mid to high to two thousands. So an industry average there is like 800. So three times the average, the industry average ticket there. So really high average ticket in both. And it was designed from putting first things first and you know this is a bit of a like I won’t go deep into this, but we take putting leads and we take this like putting first things first so seriously that we’ve reorged the whole company around this concept because we kept tripping over ourselves to like create these administrative processes that like none of it fucking mattered.
John Wilson: If you’re not selling something, like you, somebody has to sell something and you have to do it a lot and you have to make that a machine. So we ended up breaking the company out into these three quadrants of a lead, which is marketing, call center, like how do we get the lead, how do we handle the lead, how do we book it, how do we dispatch it?
John Wilson: Sale, which is going to be our field pros on the sales side. Our sales training, our onboarding, our packaging what does that look like? And then fulfillment how do we actually complete the thing that we sold? So the whole company. We did that about a year ago.
John Wilson: We reorg the whole company. We had to let some leaders go and we got ourselves fully aligned on like first things first.
Tyler Martin: Very cool. Hey, going back to this technician thing, is there anything you could give the audience just in terms of like one or two things? This is what your technician should be doing as it relates to sales, or some little words of wisdom there?
John Wilson: I mean, the biggest mistake I usually see is incentive comp is not aligned. Like if you, this is not a complicated thing, like I don’t think I’m a very smart person. I actually think because I’m not hyper-intelligent we’ve been able to like move faster Cause I don’t overthink stuff.
John Wilson: So, like early on, like the one of the first decisions that I made nine years ago was aligning performance with compensation. Like that was a first two or three decision. The other ones were like flat rate pricing and I was going to move to QuickBooks online.
John Wilson: Like and I don’t remember which order they came in, but like first few decisions in October of 2016. And that was what grew the business. The idea wasn’t complicated how do I get people to grow this business for me? Well, I bet if they make a ton of money, then they will.
John Wilson: They will be more inclined to do that. So let’s just create a program where this person can make as much money as they want and I will be super excited to cut those checks. And that was not a challenging concept. And people really don’t get this right.
John Wilson: I’ll talk to people that have salespeople with no commission. It’s full salary. It’s like why would that guy ever sell more? Why would he move to the next package? What incentive is there for him to do an excellent job? And the answer is there isn’t one other than like, maybe a high five.
John Wilson: So yeah, I think that’s like the easiest win. That’s what I see most people do. Wrong is they just haven’t aligned incentives.
Tyler Martin: Yeah, that’s good stuff. Okay, I got one one last little topic here I want to get into. I want to talk about, like, what’s next. I’ve heard you say, hey, you want to be a hundred100 million company someday. Talk to me a little bit about that.
Tyler Martin: And I also just wanted to dangle one other part two of this. You know you mentioned about getting geared up for M&A again. Is there any part of you that you’re thinking about maybe being your own private equity company where, like because you know I think of like Kelso Industries I’m having them on my show in a couple of weeks they basically created where they went out and acquired I think it was, 27 companies in a couple of years, and they looked for a certain profile of an owner, probably a guy or girl that’s about 40 years old, very ambitious, but wants to be part of something bigger and make more money.
Tyler Martin: Is that potentially part of your evolution? Or how do you get to that hundred million, I guess, is my question.
John Wilson: Yeah, a 100 million. It’s a big, hairy, audacious goal. It’s easy to put on a wall and talk about frequently. Our reality is that I see that as not the end. I see it as sort of like a next step, like 100 million is going to be super fun when we hit it and I’m really looking forward to that.
John Wilson: We’re a couple of years away, like looking forward to it. I think 250 would be a lot more fun, I think 500 would be even more fun than that, and a billion sure would be sweet. So I think a hundred million is an easy number for people to get buy-in about, and I’ve always been cautious on when I share, like and this is just like my whole adult life, what I think I can do and what I think I can help other people do is is almost limitless and I don’t see a reason that we can’t build a business with a billion dollars of enterprise value Like.
John Wilson: I don’t actually see a reason Like. I know people that have done it, I see what they’ve done to do it and I understand how we can get there. So when I? But the problem is that’s like too big for most people to get a hold of.
John Wilson: But a hundred millions, not when you’re growing at 30% year over year and you’re in the thirties. So a hundred is a digestible goal to get the team bought into so that we can progress further towards the real goal, which is a lot better than a hundred.
John Wilson: So that was the answer to the first one. The second one is like how would we think about getting there? Probably a lot of organic, probably some M&A. We have a backbone for this, we’re capable of it. We do hope to raise at some point in the next few years.
John Wilson: It’s something we’re super transparent about with our leadership team. I think it’d be fun. Right now we’re bootstrapping and like it’s still fully internally owned, we run a good business and we’re going to continue to do that. I think somewhere between the 15 and 20 million EBITDA mark, which is hopefully less than three years away, we’ll be thinking about raising and then we would be the platform and we would go acquire a bunch of other businesses.
John Wilson: But yeah, that’s that’s sort of the current plan is. It’d be fun to bootstrap to 15 million of you, but I I think the first 5 million is like the first million is crazy hard Right, but we went from like the first million to the first 5 million in a year.
John Wilson: And I have friends that have gone on the same journey and they’re like a few years ahead of me and and they had the same thing. It was like a million and a half to four and a half million to 7 million, to 12 to 17,.
John Wilson: Because you know, once the company gets big enough and you’re just like you’re, you’re not pulling levers anymore, you’re turning dials, and if your company’s aligned around EBITDA, like we get better every day at this, like we get better at driving more EBITDA, we get better and enhancing margins every single day.
John Wilson: So I think the first 5 million was like hard and brutal. And I think the first 5 million was like hard and brutal. And I think the next 5 million is not going to be hard and brutal. I think it’ll be like we’ll be challenged.
John Wilson: But, yeah, if you can hit 5 million of you, but I think you can hit 15 or 20 bootstrapped, I think you can go beyond that too. I just think, uh, I want to reward the team and I want to be like well-armed going into the next stage.
Tyler Martin: Yeah, I mean, especially at 5 million plus. I mean you’ve got some serious free cashflow floating around that gives you options in terms of growing and investing and things. So that’s pretty cool. That’s a pretty good spot you’re in. I love your transparency and your candor just in sharing your journey.
Tyler Martin: So your websites you’ve got, obviously, your podcast owned and operated Amazing. You also have workshops. There’s a link it’s owned and operated slash workshops If people want to check it out. Is there anything you want to plug or mention that people might be interested in in hearing more about you?
John Wilson: No, I think owned and operated has been a fun project. You know, the past five years of my life we’ve been sharing the journey. So we started creating content when I was a $3 million business and we’re still creating content at 10 times that size.
John Wilson: So if you want to watch what that looks like, it is all on the internet and kind of easy to find. And all we did was one shared the journey, but two we wanted to create a resource that I wish that I had 10 years ago when I first bought the business.
John Wilson: Like it’s a totally different industry. There’s more information, there’s more people, there’s more money. Like it is a different industry than when I started. And I just want to make a contribution back, cause I feel like I’ve I’ve gotten a lot out of all the other people in the industry that have shared with me.
John Wilson: So owned and operated is my now very large contribution back to the industry.
Tyler Martin: Yeah, very cool. And then you just spun off it’s Jackquisitions, is that correct?
John Wilson: Yep Jackquisitions. Yeah, my cohost Jack. Yeah, he runs a show on M&A in the trades.
Tyler Martin: Yeah, very cool. I’ve listened to him a few times. In fact, I think I have him coming on in the near future. I’m excited to talk with him. It’s a great show.
John Wilson: Yeah, no, he does a good job. Yeah, people love it.
Tyler Martin: Awesome job. Okay, well, I really appreciate you sharing your journey, sharing your story, and keep up the great work. I love your show. Great Thanks, take care. So if you took one thing from this conversation, it’s that growth is never just about adding revenue.
Tyler Martin: It’s about building the systems, the people and the processes that can handle what’s coming next. John’s been through the messy parts of M&A, the challenges of rapid scaling and the wins that come from putting sales first. If you want to follow his journey, check out his podcast Owned and Operated, and his workshops.
Tyler Martin: They’re excellent, which we’ll link in the show notes. John thanks for being so open about the wins and the struggles and for showing that even at $30 million, you can still be building for the next big leap. Now, in this episode, john mentioned at one point accounting and finance issues cost him dearly.
Tyler Martin: That’s exactly what I help businesses avoid. If you need help in this area, go to cfomadeeasycom. That’s cfomadeeasycom and book a no pressure intro meeting and let’s chat, as always. Thanks so much for listening.
Related Episodes
- Intro Episode with Tyler Martin
- From Family HVAC Shop To Scalable Company – Ray Isaac
- From $800 Short to $12M HVAC Entrepreneur – Katy Higgins
- Most Contractors Price Themselves Broke Without Realizing It – Danielle Putnam
Tyler Martin works with owners on the numbers behind these stories: HVAC accounting help from a fractional CFO for HVAC contractors. For where your business sits right now, read the $3M to $15M scaling breakdown.
