Host: You've heard of bhag, a big, hairy, audacious goal, and it's what John Wilson had when he bought his family's little plumbing business in 2016. John actually acquired the business from a position of weakness, as you'll hear, but he quickly decided that there was opportunity here and that he wanted to do something spectacular. In his case, it was become the largest licensed home services business in Northeast Ohio. Seven years later and he's achieved it some numbers. The business was over 60 years old when he bought it. His grandfather had founded it, but it was doing just about a million bucks in annual revenue. Not a lot. The first full year of John's ownership, 2017 saw the business grow to $1.7 million. Flash forward and the Wilson companies did that much revenue this past January alone. They're gunning for $26 million this calendar year, and John sees a path to $100 million. His latest BHAG. John's story is a hopeful example that you can buy a quite small business and grow something very large. And John himself is an advocate of buying small. But do be careful. John chose a big market, licensed home services, which includes plumbing and H Vac and electrical. The path to a big company would be far different in a market with less aggregate demand like window washing or septic pumping. Also timing John took advantage of a golden window of opportunity in home services when digital marketing in the category was just starting to mature. That window has long since shut. We get into that and much more on the back half of the interview where John breaks down the whole home services category. It's a great primer, a must listen for anyone seeking fluency in what is the most common type of SMB home services. Please enjoy this interview with John Wilson, owner of the Wilson Companies Announcements SM Bash is coming back around for its third year. I was at the first two and I'm looking forward to this one. In case you don't know, SM Bash is a conference for searchers, SMB owners and SMB investors. I can't think of another conference with as many Acquiring Minds guests who I get to see in person now. A key enhancement at this year's Bash is tracks for the panels. One track for current searchers, the other for operators, which means twice the amount of content to choose from and content tailored to where you are in your journey, either still searching or already operating. This year's show is in Salt Lake City from April 18th to 20th.

Guest: Check it out.

Host: Smbash.com smbash.com See you in Salt Lake. Welcome To Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs. And on this podcast, I talk to the people who do it. An SBA loan broker, as opposed to a direct lender, doesn't work for a particular bank. Instead, the broker pairs you with the right SBA lender for your deal based on industry terms, risk thresholds, then helps you navigate the process better than many lenders themselves do. Matthias Smith of Pioneer Capital Advisory is just such a broker. Matthias worked at two of the country's top 10 SBA lenders. So he's been on the inside of the SBA process and knows well the pitfalls and hurdles and how to avoid them. He struck out on his own to laser focus on the ETA and search space. Our niche is his niche. You'll see Mathias at all the ETA conferences. He's closed over 30 search deals since starting Pioneer in May of 2022, including some acquiring Minds guests. To learn more and get in touch, go to PioneerCapitalAdvisory.com or click the link in the notes. John Wilson, welcome to Acquiring Minds.

[4:32] Guest: Thanks for having me on. This is a long time coming.

Host: Well, I was just going to say back in 2021, John, when I first got into this world, you were one of the very first names that I learned in the SMB Twitter sphere. So you were a big deal. Then, two and a half years later, you're a bigger deal still. So I am thrilled to finally get you, get you in the seat.

Guest: Yeah, no, this is fun. I think I sort of disappeared off Twitter. And I'm sure we'll break into why and, you know, teaser. It's because acquiring three companies and quadrupling in five and a half months while talking about it publicly on Twitter is exhausting. So one of those things has to give. So it was my Twitter presence.

Host: Well, so I guess things are. Are slow at the Wilson companies because you've, you've, you've come back hard in the last, what, six months?

Guest: Yeah, yeah, yeah. Not slow. We just, we got over the hump.

Host: Okay. Yeah, we're gonna hear about this hump.

Guest: I'm sure we're gonna hear all about it.

Host: Well, a lot of people listening will at least know you by name, if not your story. But we're gonna, we're gonna do your story in full. You own Wilson Companies, a home services business, and we're going to spend a lot of our conversation on that tonight. But you're also something of a media entrepreneur with a podcast of Your own called Owned and Operated. A successful podcast and a conference hold, coconf, which my audience will have heard of. Your partner in that Kelsey Larrick has been on the pod a couple times. So if we have time, we'll, we'll get to those ventures as well. But let's turn our attention to the, the main event, Wilson Companies. John. So just to set the stage, give us a sense of when you became owner. Fair. Way to put it.

[6:27] Guest: Yeah.

Host: When you, when you became owner, how big was Wilson Companies in revenue and employees Today in January, last day of January 2024, how big is it? Revenue and employees?

Guest: Yeah, so, like, quick hits. When I took over in 2016, we were doing about a million dollars in revenue with about eight team members. Fast forward today, we're seven and you know, seven years and three or four months in, and I have about 142 employees on the team and our budget is 26 million for this year. Incredible. The, the sort of. I, I said this in our company slack earlier today. So today was a big day. It's kind of funny that we're, that we're talking today because it's a big day for, for a few reasons. One, we set an all time record for any month ever. So January 2024, I'm excited to break it again, but this was a record month for us. And it was also, I, when you run a business long enough, you, you hit milestones, right. You have milestones along the way. And one of, you know, my, one of my big milestones was my first full year of ownership, which was 2017. And in 2017, we had maybe 12 or 13 team members and I did $1.7 million, which felt like such a big number to me. And today, In January of 2024, we did more in revenue this month than I did in that entire year of amazing. Of my first year of ownership. So that's, I don't really. I'm feeling very nostalgic about a lot of things today because that was such a. Anytime we've had these, like, holy smokes, I just did more revenue in a week than I used to do in a month. Or. Yeah, nowadays it's more revenue in a day than we used to do in a month, which is like just blowing my mind. But today was especially fun because it was a record month. We did more in a month than we did in the entire year of 2017. And, and I'm about to make my final payment for the deal that changed my life in 2018. So, like, my final payment is due tomorrow and the seller is going to walk through the business and, and see what's happened in the six years since I bought his company. So a fun day. A fun day for all of us here.

Host: Awesome. What timing. Lucky us.

Guest: Yeah, congratulations. It was good timing.

[9:01] Host: Yeah, that's, that's really cool. On both, on both fronts. On the revenue record setting for the month and on your final payment tomorrow for the deal that changed your life.

Guest: Yeah.

Host: Which we're, we'll talk about.

Guest: Yeah, we're here to talk about it.

Host: Well, we're not going to be able to condense seven years into this time especially also because I want to hear you riff on a lot of topics that are not directly your story. So we're going to try to do your story, as much of it as we can in kind of the first half and then leave the second half for topics, themes, thoughts. Yeah, so let's do. So let's do your story though. So yeah, 2017, your first full year of ownership. Take us back there. How did you get in? What does that mean? How did you get into this business? Yeah, give us a story.

Guest: Yeah. So I own my family's third generation plumbing and H vac company. My grandfather Ralph started it in 1958. That's incorporation date. He had actually run it a few years prior. He came back from the war and he was, you know, looking for some stuff to do. Did it for about a decade, made it a company and it started off in my grandparents house, you know that I think there's a picture of, of my grandmother picking up the phone at their kitchen table. And that was the plumbing company

Host: and

Guest: it ran really pretty small and it feels strange to abbreviate such a long period of time. But the company was, it ran from 1958 to 1985 when my dad bought it and it was still roughly the same size. So you know, one person in the office, a couple people in the field and you know, my grandfather the owner and then my, my dad Paul took over and he ran it from 1985 to 2016 when I took it over. And you know, it had grown from three or four people to seven to eight. So there were obviously some momentous things that happened in that 50 year period. But it always feels very weird to abbreviate it. But it's really most of the company, it grew very slowly. We stayed in the same building. We just moved out of that building six months ago. So we'd been in that building for 63 years, 64 years. And, and things really started moving in the early, you know, 2010, 2012. So I, I entered the business and we started moving forward kind of rapidly.

Host: Okay, so do you feel like you were growing up in and around this business? Was it in the back?

Guest: Yeah.

Host: You know, were you working weekends, summer jobs there, or was it just kind of in the background?

[12:02] Guest: Yeah. So I'm always fascinated to know what other people who grew up with family businesses think about their family business. But the one thing I've tended to notice is no one thinks that they're, that they're going to work inside the family business. So I remember I talked to Justin Reader a couple years ago, and he works in his family business, and he was, he was embarrassed about it. He's like, oh, my gosh. I, I can't believe I ended up in my family business. And I'm like, bro, like, you're, you're killing it. Like, you're, you're, you know, this is a win. Like any, any way you look at this, this is a win. And I think, I think it feels like you didn't do your own. Well, you didn't, you didn't do your own thing. Right. So for most of my life growing up, I, I did work in the business. I started working at about 10, just in, in summer. My dad would pay me five bucks a day, and I would, you know, clean up trash and put away parts in the warehouse, and I would go with him on estimates. And I was exposed to the business, but I really never thought that I would take it over. And I honestly fought it pretty hard all the way up until I was 21 or 22. I did take over the business very young. That's a core part of the story. But for a long time, I fought that. So graduating high school, I went to college initially for graphic design, and I ended up, I ended up getting sick, and I wasn't able to complete that program. So I, you know, I needed to be able to work flexibly. I had to be able to take care of my health. So I, I, my father allowed me to work flexibly while I dealt with that, which took a couple years. And by that point I was very exposed to the trades. So by 1617, I was able to re. Pipe a small home, replaced a furnace by 1718. I was a, you know, a capable field professional when I was, before 20. So I worked flexibly for a few years. I attempted to go back to school a few more times. I went for H vac once. And then I, in my early 20s, I went back to school for accounting. And I did about two and a half years of the program which landed me around 23 years old. And that was, that's where my college stopped. So I, I got married at 23 and I had actually taken over running the business at 23 and I was going to school full time at night and I, I basically thought that one of those three things had to give and it was school.

Host: Okay. And so wait, so you're 23, is this now 2016?

Guest: This, this would have been 2014.

Host: So you kind of took it over. You were, you were de facto leader, but you didn't officially buy it.

Guest: Right. So I was the service manager, sort of ops manager for a while. You know, it's eight people, so it wasn't, it wasn't that big or complicated. But around 23 we started really talking about me buying into the business, which is, is obviously a ridiculous conversation to have. So I like to address the elephant in the room. I don't think that I'm brilliant and I don't think that I'm impressive by me being young in this stuff happening. I think that my dad was my dad and I have a 40 some year age gap and he was needing to find an exit for this business that was a third generation business and I was present, I was wanting it. By that point at 23, I, I had, you know, two years of accounting. I understood enough to be dangerous and understood what the opportunity was in front of me. And so he entertained a conversation that most people would obviously not Entertain. Like a 23 year old is obviously a very young person. So I wasn't anything special. It was a series of circumstances that I had nothing to do with that gave me an opportunity that I probably didn't deserve.

[16:20] Host: Well, on the other hand, you're his son and one of the whole patterns in our world is that there's all these baby boomers who are selling to, to we searchers.

Guest: To us searchers. Yes.

Host: Because their children don't want the business. So there was probably a part of him that was happy that it was going to stay in the family. When you talked about other people who don't want to be, don't want to stay in their family business run the other way. So just to be clear, you were like that and then eventually came around to it, just gradually, just more exposure and eventually like what? Was there a tipping point or was it just this kind of gradual thing? And eventually you had said, you had said I understood the opportunity in front of me did, did something crystallize. About the potential here or what was it?

Guest: So I am a leader or I'm. Maybe the better way to say this is I'm in the position that I am because nobody else took it, not because I. Not potentially not because I'm the right person. I mean, now I have a track record that shows that I probably was, but that's still new to me. So, you know, I was 23 years old and I was freshly married and I was working still full time as a technician. And feeling like I was trapped is the best way to. Is the best way to put that. So I was a technician in a very small business. There was no upward mobility inside that business because the, you know, there's eight to 10 people and. And that was sort of it. And I wasn't feeling particularly stretched. So I, I'm a curious person. I sort of crave a challenge. And in most things that I do, I like to be challenged. I want to be intellectually stimulated. And I didn't feel that. So when I was 22 and 23, I was looking for an exit out of the family business and I felt even more trapped because I had yet to graduate college. So I, you know, I went back to accounting school, not to take over my family business, but with an expectation that I would leave the family business and go be an accountant somewhere. So the opportunity in front of me was sort of like that was the only opportunity that made sense to me at that time was I felt trapped by the choices that were in and out of my control. You know, I had some medical stuff that wasn't totally my control, but the other decisions that came after that were. And I didn't feel challenged. And we started, I started going to school and understanding, hey, maybe I can do some of what I'm learning about and reading about here in this business. So that is when it started to crystallize as maybe this could work. But it, it sort of came from a point of desperation, honestly.

[19:31] Host: Well, how interesting that. Yeah, you kind of saw it as the only path to do something that you thought checked the boxes that you wanted to check was to actually, rather than run away from the business, run toward it. That ended up being the solving for the things you wanted.

Guest: I was that I thought that I was on my way out. And by moving in that direction, I found my way in.

Host: Well, it's also, it's also, I think probably people in family businesses who do stay in family businesses eventually learn this or whatever the way you quote, do your own thing within a family business is you make it your own. So now this business today, sure you weren't the founder, but you, for what it is today, is a completely different animal, which we're about to hear about, than it was before. So you probably, I imagine, feel like you sure as hell have done your own thing.

Guest: Yes, I, I, I feel a lot more confident now than I do than I did, you know, seven years ago in, in what I could do. And I was young, very young.

Host: Yeah. What do the following acquiring minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Chirag Shah, Shane Ursam. They all went through the Acquisition Lab, the accelerator in community for people serious about buying a business. But they represent just a sliver of the Lab's success stories. The number of deals across the Lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value. The Acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business. The lab offers a month long, intensive, almost daily Q and A sessions with advisors, live deal reviews with Walker, Deal team introductions, and an active community of serious searchers. Check out acquisitionlab.com, link in the notes or email the lab's co founder, Chelsea wood Chelseie. Then build.com. did you have any hesitation now kind of putting on our searcher hats here. Did you have any hesitation that the business had grown so little? You know, it, it was basically the same size for 30 years under Ralph, your grandfather's tenure.

[22:02] Guest: Yeah.

Host: And then it had doubled, but just to seven or eight people under your, under your father. Were you, did you think it would, you, maybe you'd get it to 16 people if you were lucky sort of thing? Or were you like, did you see the potential to do what you've done with it that early?

Guest: Did you see that? I went into it. My dad and I were texting about this actually earlier because I, I informed him of the win today, that hey, you know, we, we, we did more revenue this month than 2017. Dad, that's crazy. So we were texting about that and we were reflecting back on those conversations in, in text tonight. And I was, I was very deliberate at the time. So you had two questions. One, was I cautious that it hadn't grown? No, because I knew why it hadn't grown and it's, it's not a mystery. I'm very happy to break it down. That really didn't bother me at all because I just assumed That I was going to be able to do it and I ended up being right. But obviously that could have gone the other way. And two, I went into it with the intention of making the largest licensed home service company in Northeast Ohio, which in those past seven years I have done. We have succeeded at that goal. But I went into it with that goal like that. That was what I was going to do. So he and I were texting about that tonight and it was just sort of like, wow, what, what a journey. Like we did it. You know, when I was 24 or 25 and we were talking about acquiring this business, like that was it. I said I would do it and I did it. And that's crazy.

Host: Yeah, I love it. I love it. I love your humility. It's, it's, it's, it's great. By the way, were you so family business, graphic design, dalliance in graphic design, then in accounting, were you a natural entrepreneur? Was that something that was ever written in the stars?

[24:07] Guest: No, no. In any way you say I am fiercely independent and I have been like that for a very long time. So I saw. Yeah, I've really never trusted anyone's authority besides my own, is the best way to put that. Like I called my teachers by their first name because I felt that if they were calling me by their first name, then that's how that should work. I, you know, bought my own first car with my own money. At 15, I made sure I had my own cell phone plan. At 14 or 15 I wanted to be in control of my own stuff and money was the conduit to do that. So I don't think that I was, I wasn't like launching pinball businesses or lemonade stands or any of those stories that you hear. I just really did not trust anybody else to take care of me other than me. And that seems to have worked. But it was much more of a I need to be independent and need to be self sufficient than I need to launch a business.

Host: Interesting. I've never heard that quality kind of before. I'm not sure if it has a name. I guess the need to control this. Well, you can be stubborn and not have, be so independent. I mean it's a combination of.

Guest: Yeah, I think independence is the best way for. Because it's not, it's not controlled. Like I run. I have to delegate a lot. That's a core part of my responsibilities and I have no issue doing that. I would have a big issue if someone owned a majority of the company and I had to Listen to them.

Host: Yep.

Guest: Like, I, I want to be in the driver's seat, and I've wanted to be in the driver's seat since I was probably born. So, like, I, I, I struggle with the authority piece and like, who's making, who's calling the shots? Because I ultimately believe that I'm going to call the best shots.

Host: Did I say humility earlier?

Guest: You know, it's, I'm a mix, I'm a mix of both. I'm confident where I can be. But I also realized that so much of this was luck, and it just was.

Host: Okay, John. Well, like I said, we're not going to be able to go year by year here.

Guest: Yeah.

Host: So I'm going to need you to guide me at the important. We can do that.

Guest: We can do the big hits. We can do the big, the big hits.

Host: Sounds like this first acquisition. Well, you, I'll let you tell us. So what's the first big hit?

Guest: Yeah, so there's, there's probably five big hits. Career defining hits for me. So not counting acquiring my family's business. So the second one was in February of 2018. We're on the eve of that anniversary tonight as we record. So that business was a. In late 2017, I was frustrated by the lack of growth inside the company. We had achieved $1.7 million of revenue, and that is very tough to feed two owners on. And again, I was deliberate that if I was going to join and do this, like, we were going to grow a large company.

[27:21] Host: So who was the second owner? Still your dad or.

Guest: My father maintained an interest. Yeah. Yep. So I started sending letters. Someone, someone in my industry locally, bought another business competitor. And obviously I kind of knew that was possible because I just had bought my family's company. So it wasn't like a foreign concept to me. It was a foreign concept to me that you could grow by smashing them together brand new. I, I had never heard of that before, so I was interested. I sought to figure it out. And I just sent a bunch of letters. I'm sure I read a book or a blog. I wasn't very informed about how to do it. We basically figured it out, but I sent about 100 letters to companies that I roughly knew that I could acquire because they were very small. So we were 1.7 in sales at the end of 2017, and we had four or five companies respond to those letters. And one of those companies was a business that we had made contact with a few years prior that reached out saying that they would like to be acquired. We didn't close the deal and I don't know why, but after six or seven months, we closed that deal in early 2018. So they had, you know, we had 13, 14 people at the time. They had maybe 10. They were doing 750,000 of revenue and dropping. And they had lost money every year since 2009. They went bankrupt in 2009 and they had been surviving off of a line of credit as they attempted to turn the business around into a service organization because it used to be new construction. So that was a, that was a pivotal moment for me for a few reasons. One, I was 26 and I had obviously no idea what I was doing. The business doubled overnight, like stroke of a check and the business doubled, which was. I just remember that feeling of like, oh my God, like this is crazy. You can just do, you can just do this and acquire your way to growth. The team size doubled. So I went from 14 people that I'd like basically grown up with, they'd all been there for a very long time. They knew me, they, they got it. To managing an outside party of 10 people that were all twice my age. And on top of that, the business was going bankrupt. So we had to figure out how to turn it around so it didn't sink the whole ship. So what followed was a difficult year.

[30:10] Host: John, why did you buy that business versus a couple of the others that had responded to your letters?

Guest: Because I could afford it. I could afford it.

Host: So it was, it was given, it's that it was distressed. It was cheap.

Guest: Cheap, yeah, it was $110,000. So I changed my life for $110,000. So we ended up signing a six year seller note. The final payment is tomorrow. And I gave 20 or 30 grand down, which was probably 80% of the cash that I had on hand. So we doubled the business overnight, learned how to manage a team of 27 people or so off the rip. The business, instead of being 1.7, ended up closing 2018 at 2.9, which was a pretty big jump. And we were excited about it.

Host: So

Guest: that was our. It was a big exposure because we, I got two managers out of it. So suddenly I had managers that had never been a thing before. And I had to figure out how to work with managers. We jumped on service titan shortly before that. So we had to figure out how to actually measure things, like, what the heck are we actually doing here? About a day or two into the acquisition, the schedule was empty. Like there was nothing on the board. So we had to figure out how to market, so I didn't go bankrupt. So we had to figure that out in February of 2018, and we figured out how to turn a new construction company around, which was a skill that we've now used several times. But all of that was learned in that second acquisition. So it was a pivotal moment of my career. Like when I think about the, the moment that took me from the small business owner to the I can, this can become something real. It was that acquisition.

Host: Yeah, yeah. And professionalized because it was your first.

Guest: It was our first, but it also professionalized it, it added managers. We had to figure out how to build teams, we had to figure out how to market. We had to suddenly figure out entirely new capabilities that we had never had. And it forced us to level up. So in, you know, 2017, we did 1.7. In 2018 we did 2.9. And in 2020 we did 3.8 or 3.9. So we added another million two years back to back as we learned those new skills and how to run a larger company.

Host: And through the pain of that year that your first acquisition and all the things that you described that came with it were there. It was hard, but were there low moments? Were there fetal position moments? Or did it not get that bad?

[33:03] Guest: Oh yeah, no, no.

Host: Like real panic.

Guest: Yes. Oh yes. So a year, it was a year after and I thought we were going to go bankrupt in early 2019. So the, the first year of an acquisition is like a, you know, a lot. And now, you know, I know the steps, so I, I know the stages of grief as you think of them now. But you know, those first three months are like honeymoon where you're like, you're getting to know everybody, you're figuring out the systems, figuring out the customers, training, all that stuff. Second six months, you start to work on performance, which we did. But we never, we never killed the new construction side of the business. And this was my first exposure to new construction. I didn't understand it. All I saw was really big tickets. So like, wow, I, I, we just did a hundred thousand dollar month in just plumbing install. Like that's a big deal. That's crazy. And I didn't understand what that looked like for cash flow. That was a brand new thing for me. And by the way, it's bad. I didn't understand what happens when somebody doesn't want to pay you 100 grand. We found out, but that was new. So we learned a lot about the other side of the industry. This low margin, highly cyclical section of the industry. So a year into our acquisition, the business was floundering as we tried to deal with the new construction. So we had merged the locations. By that point we had prepped to merge the brands and we were stuck with this new construction team. And it was the first time, not the last time, but the first time that I've ever had to do mass layoffs. So early 2019, fetal position, mass layoffs. We laid about 20 or 30% of the team. Go.

Host: Oh, wow.

Guest: Yep.

Host: Okay. Well, that, that first hit ended badly, but, but, but was transformative. As you said, your first taste of acquisition. Open your eyes, professionalize the business. Okay, what's the next milestone in this journey?

Guest: Yeah, next milestone was late 2019. So 2019 became a recovery year which should I think happen. If you're, you know, if you're an operator and you are acquiring to grow, you can run too fast and you need to digest like the organization has to figure itself out. So 2019 was that year for us. So we figured ourselves out and at the end of 2019 we joined a group called, it was SGI now it's called Certain Path. And that was the next big thing for us. So we, you know, 3.8, $3.9 million of total revenue. Team size was maybe 30, 27 somewhere in there. And what that gave, gave to us was a model. I still wasn't educated. I, I had like somewhat of an idea of what I was doing during my day to day life, but it really felt like I was grasping at straws and some things worked and some things didn't. So what Certain Path did was it gave us a, a model to follow. Like, hey, here's an org chart that your business should roughly look like at this size, this size and this size. Here's a rough idea of what pricing can and should look like. Here's a, Here's a few examples of how to structure your company. Here's how to do your handbook. So this was the next level of professionalization. But instead of like, here's how to work with managers, it's, here's how to run your business. So it gave us a sort of a business in a box without it being a franchise.

[36:59] Host: And John. So Certain Path, is it like a next star in some of these that basically give you the playbook. It's a, it's the playbook industry. Tell people in 30 seconds what, what it is you pay. It's a membership. They give you a playbook.

Guest: Yeah, that, I mean, you just did it in three seconds. I mean that is what it is. It, it's the playbook now at Certain Path does it for smaller companies. Certain Path was started with this concept of let's get the owner out of the truck. So their average company size is small, whereas nextar, their average company size is much larger. I, I believe you have, I think they've relaxed the rules at Nextar, but you used to have to be 5 or 7 million at a minimum to even apply to be in Nextstar, whereas SGI would take someone at 200,000.

Host: And, and these are industry, what industries do these?

Guest: Plumbing, H vac, electric and roofing. I believe they both do roofing.

Host: Okay, all right.

Guest: Yep. But yeah, so that changed our business and that figured out, that helped us figure ourselves out. And in that time, the owner who came from the business I bought in 2018, he was our ops manager. So I actually kept him on for a year and a half and he was getting ready to retire and I had to hire someone to implement this business in a box. So I hired my then ops manager, now CEO and president, Brandon Nyro, and he, he came in and helped me implement Certain Path or SGI into our business so that we could take the company to the next level. So that was sort of a twofold big hit because one, Brandon joined the team, which obviously has been instrumental in, in what we've done. And two, we put a lot more process and systems in place. The

Host: Certain Path in like, like an eos, is it kind of like an industry specific eos or am I comparing apples and oranges?

[39:05] Guest: Apples and oranges. So EOS is a way you meet, it's the way you talk, it's the way you communicate. Organization wide. We, we are on eos. This is really a playbook. The best way to think about nexstar or Certain Path is this is a franchise without a franchise. Like, that's it. So when you sign up for a group like this, which most industries have one, and I highly recommend everyone do it because it really, it gives you, it gives you the next step, which, like that is really hard to figure out what the next step is because there's not like a, I haven't found one, but there's not like a playbook out there on how to do what I've done. Like, there's not like a, here's how you go from a million to 100 million in 10 years. Like, I haven't found one yet. If you, if you know of one, please send it my way. But it helps you figure out what's next and it gives you something to constantly work on and improve and iterate and implement into your business. So that's what we liked about it. And it also. One of the reasons I liked it so much is I was working with managers and I have. I think I'm better now than I was five years ago. But communicating vision and communicating the why and giving people a clear set of guidelines on how to go do the thing was a real challenge at that time. And those business in a box systems make it easier or at least made it easier for me. Like, hey, here's what we're going to implement. Here's this thing that's already pre made. I don't have to reinvent the wheel. Here you go. Now we could just focus on the, the most important things. So best way to think about it is like a franchise that you don't have to pay royalties on. Now granted, you have to pay money. It was 30 or 40 grand a year, but you don't have to pay royalties. Right. It's not like, it's not a percentage. It's not a percentage of revenue. Yeah. It's a, It's a membership that you're a part of.

Host: Great. Well, that was a compelling pitch for Certain Path, given that it was.

Guest: Yeah. I mean, I have. We actually, we actually just left Certain Path. And I talked to Rebecca, the, the president CEO, and she, she was asking why we left. And I explained to her that, you know, we'd. We'd sort of run out of things to implement and there was no more roadmap, which. Okay. And I'm just. Nothing. I have nothing but great things to say about the program because we, when we, when we started that program, we were $3.8 million. And when I'm leaving, like, we're going to do 26 million this year. Like, I have nothing but good things to say. Like, yes, we ran out of things to work on inside that program, but that just means we have to go to the next one. But it's a great program. If you're really under 5 million, that's like a awesome program.

Host: Great.

Guest: Yep.

Host: Next hit.

Guest: Next hit. We had been. And so we're based. We used to be based out of Akron, which that's weird to say, but we had been based out of the same building for 60 years. And Akron is a small town. 200,000 people in the metro and about 500,000 in the county itself. Now with the addition of that other business in 2018, our total service area was 800,000 people in population. The downside of that is the metro was shrinking, so population was going down. And some of the legislation and some of the politics in those two towns scared me for the future of Akron, which is tough if that is the only place that you are doing work. So the next big hit was understanding that and seeing that as a very tangible risk to our business and figuring out what to do about it. Now, fortunately, we are only 30 or 40 minutes south of Cleveland. Cleveland's population is 3 1/2 million. Despite being only 30 or 40 minutes south, we had never done work in Cleveland one time ever in the history of the company. So it was a very sort of shocking change for everyone that we would suddenly start driving up to Cleveland. That was a big deal. But the population to serve was just so much larger. And if it was shrinking, it certainly wasn't shrinking at the sort of same pace that Akron and Canton were shrinking. So. So that was the next big move, was expanding our market. So we bought a very small company up there, like 500,000 a year, which I guess was 12% of annual revenue. So maybe not that small at the time. And we signed a lease for a spot up there, probably too soon, like, now, I would do that differently. And we set up a Google my business, and we launched a little Cleveland location. We did basically everything wrong when launching that location. So it wasn't really the launch, like launching the location was more like a list of things to never do when launching a location. But I don't know. I was 27.

[44:24] Host: Wait, sorry, John. Why was it a launch if. If you bought a brand that was already up there because you got rid of.

Guest: Yeah, they didn't. One, they. One, we did get rid of their brand, and two, they didn't have a location. They ran out of the guy's garage.

Host: Okay.

Guest: Yeah. Yep. So the next big hit was expanding into a new market within proximity of us. So we tried for a few years, a few different. You know, we tried to run this location and that location and like, hey, let's launch this location. And ultimately, it didn't really work out the way that we thought it would or wanted it to. And really, that's only been, like, cleaned up in the past year. But, you know, people were dispatched differently. What we should have done is just built a mega location, but we didn't. But the important part was we expanded our available market, and that gave us just millions more customers to serve.

[45:25] Host: And so despite all of the wrong things that you did, you did tripped forward. Yeah. And so you did pretty immediately feel the pull of a much larger market. The tailwind of a much larger market.

Guest: It worked. Now, it wasn't clean. It wasn't neat. It didn't grow the way we wanted it to. But in our very first year, which was 2020 up in Cleveland, we did 400,000 in an area that we'd never done, you know, anything. So we considered that to be a success. Okay, great. Yep.

Host: But still still based in Akron. Go ahead, next hit.

Guest: Yeah. So the next big hit was 2021. I was feeling antsy. So the way we used to distribute roles. Yeah, the way we used to distribute roles has changed a lot over the years, as you can likely imagine. The business is very different and has gone through a lot of iterations, even just in the four years that Brandon and I have worked together. A lot of different, like, levels there. So I felt like I didn't have anything to do, which I didn't. But that's sort of the wrong way to look at it, at that size of a company. And so I was feeling antsy, and I was sort of like, hey, I need the next big thing of growth. Because all I could think about, I even, like, I had it written in my gym at. At home. 10 million. Like that. That's all that I could think about was, like, breaking 10 million and how to get across that magical number, mind you.

Host: And where were you at the end

Guest: of 20, 24.2 or 3.

Host: Okay,

Guest: so, yeah, so we, you know, we hadn't. We hadn't even crossed 5. Just like, now I'm obsessed with hitting 100, and I haven't crossed and I haven't crossed 50. But, you know, I think that's just how I work. So that's all I could think about. And the. It's really difficult to grow when you're under $5 million. And now I like, looking back, I understand it a lot more than I did, but I mean, mainly just resource constraint. And whether that resource is time or money or talent. But there is a massive resource constraint when you're under five. Like, you're a small business. And I just couldn't. We weren't moving fast enough. We just weren't moving fast enough. So the next big hit was in 2021. I started looking for acquisitions again. And, John, let me.

[48:12] Host: Let me ask you why since 2. 2018, way back now, three years ago, at the time, had opened your eyes to acquisition. I. Why had that not. I kind of had the impression that that was gonna. That was. That immediately became your playbook for growth. But it sounds like it wasn't. It sounds like you just did acquisition strategically going to Cleveland, but. But it wasn't. You didn't treat it as the incredible unlock to get to 10 million through 50 and 100 million quite yet.

Guest: No, I think I said this earlier, but the, the digestion phase matters a lot. So if, like, if you grow 50% or 100% in a year, that has ripple effects like a lot of them. So you know, this January we did 72% more revenue than I did last January. That was not neat or clean or process driven. That was messy as hell. We almost doubled. Like that's ridiculous. In a 12 month time period, we almost doubled. So you just need to digest and you have to figure out who you are. And Trish Higgins from Chenmark has talked about this a couple times, once at holocamp and she's written about it in her weekly newsletter, which I recommend everyone read. It's one of my favorites. And she talks about when they first launched Chenmark. They bought use either 12 or 14 landscape companies in an 18 month period. And then they, then they stopped and they sat on their hands for three years and they figured out who the heck they were as an organization and they digested. And that's what we did in 2019. We're like, yeah, I wanted to go do more deals, but even though it was only 2.7 million, I still had no clue what I was doing. We had a team that didn't really know what they were doing. I was working in the largest business I'd ever worked in. I, I've, I've never worked it anywhere else. Like this is it. So I didn't have a playbook on like how do you build an accounting team or how do you build a call center or how do you hire managers or do any of it. So we had to figure that out. And throwing more deals on top of that wasn't, wasn't going to be the right play. Yeah, that's the only thing I did know. So. So we've basically bought a company every year for the past five or six years. We've never not done a deal. This year will probably be the first year I don't do a deal, which is kind of funny, but we're also going to grow 70 or 80% year over year organically. So like we, I just got too much going on to go do a deal and make a mess.

[51:15] Host: So 2021, your answer.

Guest: Yeah.

Host: And you feel like there's been enough digestion.

Guest: There's been enough digestion. Hey, you know, we've got, we've got some process. We're a year, a little over a year into sgi. Like, we know how pricing works. Our gross profit's in the right spot. We know to hire techs. Like, we get it, we know the model. I'm ready to move to the next stage because I feel like I've been solving the same problems for four years. I'm ready to move on to more interesting problems. So we started looking for acquisitions, followed a similar playbook that I had done a few times now, because by this point we'd bought two or three other companies. So I was maybe up to four total. But the other ones were very small, like names and phone numbers, so not, not worth mentioning in the quick hits. And we ended up getting a lot of bites in 21 on companies that were open to having a conversation. I had just found out earlier in 2021 what the SBA was. So I was four acquisitions in. I had never heard of the SBA. And every deal that I had ever done up to that point was cash and seller notes. So that was the only way that I knew how to buy companies was cash and seller notes. So a lot of people make fun of me because every deal that we have has a large seller note component. Many of them, even the last, my two most freak, most recent deals were both still mostly seller note because that's how I know how to, you know, that's how I learned how to buy companies. So I learned what SBA was, which was really interesting and which, and it opened up my, my ability to buy because I had previously been buying very, very small companies, and now I'm like, oh, hey, maybe I can buy some bigger ones. So we talked to hundreds of companies in 2021. It was, it was fascinating. I really, like got under the hood of just so many different businesses in, in my area, and we bought three of them. So 2021 was a fascinating year for us because we were still pretty small and I had mostly run the business debt free up to this point. And this is, you asked me before we recorded, like, why do I advocate for buying small? And that's why I advocate for buying small, because you can figure out the business, you can figure out yourself, and when you are actually ready to go do something interesting, you probably have a really nice balance sheet. So we had taken the business up to 4 some million dollars of revenue. We had a strong balance sheet, very lendable balance sheet. So we bought the first company in July of 2021. We bought the second company 90 days later in September of 2021. And we bought the third company 90 days after that in December of 2021. So in 2021 we went from 32 employees to 105 and we went from the 4 million of revenue to a run rate in the 1314 range. And that happened to the digestion about that. Well, I spent two and a half years digesting after that. So that's where I disappeared off Twitter for a while. But yeah, so we, it was a sprint and I was really, I mean, maybe it was stupid, but it worked. So I, you know, I'm saying this and I'm like, I don't know that I advise people to do that. You know, the next two years were kind of hell. But it did work. If you're ready, you know, if you're ready, put your big boy, big boy pants on. But yeah, so we, we quadrupled or revenue and we tripled headcount in 150 days, which as you can imagine broke everything. No process that we had at 30 people worked at 105 people. We had roles that we had never imagined having, like full time payroll clerks. We had our first HR person. We had to bring on marketing people. We had, we went from two managers to like 15 or something overnight. And I, I had no idea how to run a leadership team, let alone a senior leadership team, which is what we had to turn into the whole company. I mean it just exploded in growth and process breaking. But it was a wild and exciting five and a half months and that was the next quick hit. I mean that put us roughly where we are today. Right. So 2021 was a, an, an absolutely ridiculous growth year where in five and a half months we quadrupled top line revenue.

[56:19] Host: Wow. In 20. And so since from then through 2022 you were really digesting.

Guest: Oh yeah. Through. And then through, all the way through 2023. It was 2, 2023 very full years of digestion. Yeah.

Host: And so things finally stabilize and you come back on roaring back onto Twitter and about six months ago, or whatever it was five months ago, basically.

Guest: Yeah, basically. So, yeah, like look, you got to figure yourself out. And, and there was all this, you know, everyone listening is likely much smarter than I am, so they probably don't need to be told this. But like the, the processes and the way you run a business at 3,4 million is, is obviously very different than how you run it at 15 to 20. And we had to learn it. You know, I'm still going back to this Was every day I'm in the largest business I've ever worked in. Like every day. That's my reality every single day. I have to hire smart people. I have to, you know, do everything that you would expect and want to do, but still my job to lead them and drive the bus. So we had to figure out all these things that I never had to figure out and it took a long time. The first few that we had to figure out was pricing. Next was recruitment software was a big one. And it really, it broke every part of our business leadership and how we trend transition leadership and succession. So it broke every aspect of our business over, over the course of a year and a half. And then. Which sort of leads us to the. I think the fifth one or the. Well, the fourth one. Yeah, it would lead us to the fourth career altering hit.

[58:07] Host: Oh. Oh, I thought we were done. What, what. And what is that?

Guest: Well, it, it's. We move. So the businesses, when we bought them, we ran them in separate locations with separate brands for 18 months to help the integration be smooth. So over the last six months, what's happened and why I've become a little bit more active is they all merged legally and they all merged physically. So the business, last June, we put them all into one facility. And ever since then it's been a J curve of growth as all of our, you know, two some years of effort that we'd sort of compounded started taking root and moving the business forward. Great. Yeah.

Host: Well, John, one of the, one of the. Thank you for that.

Guest: It's like, it's entertaining. Like re. I don't know, like, it, I'm probably not giving myself enough credit. Like I, you know, obviously there was some thought behind it and some strategy and I'm sure that I'm like beating up on myself a little bit. But like looking back, it was ridiculous. Like, this is insane. I can't believe it worked.

Host: Well, maybe it wasn't, it wasn't ridiculous going into it. It was only ridiculous that you, you know, reflecting back. Yeah, but John, I mean, look, going through your Twitter thread as I did to prepare for this interview.

Guest: Yeah.

Host: You're not, you're not know, licking your finger and checking the wind. I mean you, you, you have real deep expert see things very strategically. Yeah, come on, Come on.

Guest: Yeah, it just like looking back, it's such a, it's such a ridiculous series of decisions that have led me to be here today. And like, and that, that's really all, all it is. I, I think it's like it's wild. And when you look back over a long enough period of time, you're like, wow, like, I, I can't believe, like, obviously we did things right. Obviously, you know, we're. I don't even know, like a hundred, like a thousand some percent in growth. When I took it over. We have. I've hired hundreds of people. Like, I, like, it's sort of like I don't feel the need to boast about it because, like, the track record's there. And it's more like it's comical that it worked because it's, it's just crazy. Like, it's been a journey.

[1:00:44] Host: Well, I guess, you know, you had referred earlier to you getting into the business as. There was a lot of luck in that because you was. You had access to it because every year it was your family business. And. But, so, but now talking more about the growth.

Guest: Yeah.

Host: And like, particularly those three acquisitions, like two years ago.

Guest: Yeah, the.

Host: And, and you kind of laughing like, how ridiculous it was and it worked.

Guest: Yeah.

Host: You know, but. But almost like it was. Almost like you're kind of implying that it was poor judgment going into it. So did you get lucky that it worked?

Guest: Like, you know, I, I would say it. It worked almost exactly as intended. And I think that, I think that that's the thing that's ridiculous is at 23 years old, I was like, hey, I'm going to build the largest licensed home service company in northeast Ohio. And 32, I did it. And roughly every major strategy that I put into place worked, which is ridiculous for a person who just earlier in this podcast, like, like, I, I dropped out of college three times and I took over the business at 25. And I've, I've, you know, I'm sure I could list off thousands of mistakes and anybody that works with me could probably list off more. But, like, we still did it, which is crazy. I don't know that there's really a lesson there other than I like, it's fun. Like, I just can't believe it worked. I can't believe it works the way I thought it would.

Host: Let me ask you this, John. Is. Is maybe it worked because a lot of the businesses in that you're competing with are kind of like what your business was before you got in there with young, you know, hungry, aggressive blood. That there's just, it's just still sleepy now. I, I doubt that's the answer because all we hear about is how hot home services and H vac and plumbing is. So there's gotta Be a lot of hungry sharks and PE folks and people like you out there. I see them on Twitter. I know them. But, but still, you know, maybe some of that is, is a little bit, a little bit biased where, you know, I, I know the people who are doing this stuff, so it seems like everybody's doing it. But in fact, when you look at the universe of businesses across plumbing and cross H VAC licensed home services, as you said, it's really just a tiny sliver of people who are actually being aggressive.

[1:03:16] Guest: Yeah, I, I think, I, I think that's a part of it. What it ultimately would boil down to in my mind is we got the big things right. We bought a small business and we figured out how to run it debt free. So we had a good balance sheet and good cash management skills. We learned how to acquire and we bought companies at the right time. We use the right softwares, we figured out how to market at the right time, which there definitely was a right time, and it was seven years ago. And I, I think we just got the big stuff right. And when I look at companies that have floundered in the same time period that we have exploded, you know, if, if, if there's 10 core decisions that put us where we are, they missed half of them. And for whatever reason, I don't know, but like, service titan is a core decision. And I talk about it often, I don't get paid by service titan. But like, that was a core decision because there are just very few softwares out there, as far as I'm concerned, only one that allows you to run a licensed home service business at scale. That's a core decision. And if you mess that decision up, you are preventing yourself from getting to scale so that you can save a few dollars on software fees. Like you're, you're not spending, you're saving ten grand to lose millions. Like, that's the, that's the actual decisions that's being made.

Host: That's one example I've seen you tweet about. Like, I think, I think in your local market there's like a P.E. roll up.

Guest: Yeah.

Host: And they're just, and it's just going terribly. Like the wheels are coming off. Like, so for example, you probably have some, some intel there, like what's going wrong in their case, for example.

Guest: I mean, the big thing that they're getting wrong is two big things. How you treat your people. That's, that's not complicated. And marketing. So this company, they, they rolled up 10 groups and they cut all their marketing spend in half. Like, but how is that a good decision in any way? Any, any time? Not an exaggeration. Anytime the economy looks like it's taking a break, it looks like we're in for a rough patch. It looks like anything rough is on the horizon. We have always doubled or tripled down on advertising. Always, like consistently. Like the world shuts down in Covid, I tripled my ad spend overnight and we grew.

Host: Well, but can you explain that, John? Because that is pretty counterintuitive. I mean, is it just advertising becomes cheaper. Everybody, everybody.

[1:06:06] Guest: I don't understand how it's counterintuitive. Like to me that is intuitive. I don't under, I really can't understand how someone that's like cutting off your hand, like, it just doesn't make sense to me. Like if you're trying to run a marathon and you chop a leg off under the knee, like, I, I really, I, I, I can't understand how people do that.

Host: Well, I guess they become cash conscious, they become conservative because they're shoring up their own balance sheets because they're preparing for winter. Yeah, but that again, it's like, I know it's short sighted perhaps, but it seems, you know, for the same reason consumers, everybody. Belt tightens in, but then the downward,

Guest: like if you look at the secondary, it's like, okay, hey, we have less leads, so I'm gonna spend less money, which means we're gonna have less leads.

Host: Right.

Guest: Which means I'm gonna make less money, which means I'm gonna lose my talent. Like that's a perilous road and it's really hard to come back from it. So it's never really been a temptation. I, I really don't understand. Like I, I can't even get my brain wrapped around that idea. But some companies obviously do that. A lot of, a lot of companies probably do. So they cut their ad spend in half and big surprise, they lost all their talent, many of them to me. So thank you guys, I appreciate that. And, and then the other one was how they treated their people. So you want to know a great way to piss off a high producer is to change his commission structure to the company's benefit. Just don't do it. And if you do, expect to lose them to me, who won't do that. So. Yeah. So, you know, two core decisions. How are you going to treat your people? How are you going to treat your highest performers, the people that drive you dollars? And are you going to cut revenue or are you going to cut ad spend the moment you feel a breeze.

Host: Great.

Guest: I don't think one's very complicated.

Host: John. We're already getting into kind of theme stuff here which I want to spend a lot of time on. But before we pivot hard to that, let me just get to wrap up your story. Kind of the forward looking bit of your story. You've been kind of vocal and putting out a lot of content.

Guest: Yeah.

Host: Around the big plan to get to $100 million now. So give us just a couple minutes on how you, how you gonna do that. Yeah.

Guest: So, you know, moving from the. The I don't know what I'm doing, John. To I do have an idea of what I'm doing, John. Totally different parts of my personality, by the way. Different stages of a company requires a different leader. And when you break past these very specific plateaus or milestones or however you want to think about them, it requires a sometimes, often a different person. And I am fiercely independent and determined to always just be able to be that person. So what that has. And I'm getting to the answer, I think it's just relevant to walk people through the journey. I've had to reinvent myself six or seven times now, and I'm prepping for the next one because each plateau requires a totally different person at the helm. And I'm determined to be that totally different person because I was given an opportunity that I did not deserve at an age that no one should have given it to me. And I'm determined to earn that seat for the rest of my life. Just like any outsider or anyone else inside the company would earn their seat, I'm determined to earn mine. So the hundred million. I stopped needing money relatively early in my life. Like the business outgrew my personal consumption. I live a simple life. I drive a Ford Ranger. I don't know, two kids, a dog. I love my wife, love my kids. I don't need a lot of money personally. So I struggled for a few years there when the, when the. I had more money than I know what to do with. The business was like large ish. And I had no, really just no idea what I. What I would do. The extra money because I have no desire to go buy a Lamborghini or something. So it took about two years. I was 28 when that first started. And I realized that the thing that excites me is I want to build something big and meaningful. I want to really build something and I want to be a force of good in the lives of people around me. And that's why I Get up every day. And that's why I do the thing I do, and that's why I get to show up to work with a smile every day, is because that is what juices me up, is those two things. So when I think about a hundred million, even when I think about 20, I have been able to impact thousands of lives, which is just, you know, like, I was a plumber who dropped out of college a couple times a decade ago, and I've been able to impact thousands of lives, 140 of which are under my direct employee. So I get to very, very positively impact them. But because of the size of our business, we've. We've created a real ripple in our community. We've created real economic advantage for our vendors, and we've created value for our customers. So my impact to the community is measurable, which is cool, and I love that. And watching people on my team, like, we have people on our team who started two, three, four, five years ago, and in that time, their income has quadrupled because of the opportunity that we have inside our business. I didn't do that. We created something that gave people the opportunity to go earn what they. What they want and. And what they deserve, which has been incredible. And so we. We've been able to really directly change lives. And it's. It's exciting to think, like, wow, like, we've changed so many people's lives for the better. And I. I sincerely believe that I'm a positive part of people's lives. Like, what type of impact could we have if we were at 100 million compared to 20? Like, I could impact tens of thousands of lives in my community. Like, we could create something that would really help people because I don't need the money. Like, it is not about me anymore. So I, I think that the business moving beyond me and my personal consumption habits to, hey, this can be about more. And that's cool that it's about more. And other people are deeply impacted by the decisions that we make is. I don't know, it's intoxicating, it's fun. So 100 million means that I get to make a huge impact on my community and I get to build something meaningful, which I determined a few years ago was why I get out of bed. So that excites me. So. So that was the inspiration for it. Yeah, but it, It. It's still cool. Like, someone approached me two weeks ago, and, you know, we transitioned him from one department to the other, and, and he. It was like, Thursday at like, 4pm or something like that. And he walked up and he's like, dude, I just got to thank you. Like my income doubled in the last six months. Like I can't believe this opportunity was available. I can't believe like you helped me get there and like did, did the stuff and it was just like one, like I didn't, like he did that right, like he, he earned that. But two, like hell yeah. Like, like that's cool, that's cool. And like I want to be able to do that with a thousand people. That sounds like fun.

[1:14:23] Host: That's amazing.

Guest: The reason's not that deep. I want to build something meaningful and I want to be a force of good in the lives of the people around me because I built something meaningful.

Host: That was beautiful, John. And I use that word, I, I use that word carefully. The, the. But just give us a little, just a little bit because we got still some stuff. I want to make sure we have time to cover a little bit of

Guest: the mechanics

Host: of quadrupling a 26 million dollar business to 100.

Guest: So I started the story of how a CEO needs a different leader. And there was actually a point to that before I started my TED Talk. So when you break past these plateaus and we are just breaking out of the next, the most recent one, so you sort of, you, you hit your head against the wall for a couple years until you finally get it. And maybe for us it was like six months. I don't know, it felt like, felt like five years. And we're, we're in the next stage of professionalism. So we are currently moving from a three tier org chart to a four tier org chart. Moving up one probably doesn't sound like a lot, but it changes quite a bit about my life, how I think about my role, how the team interacts with me and how the business grows. And so the way that looks is that is now I am separated by, you know, there's multiple tiers of managers between me and 90% of the organization. So how I think about communication every day has to change. How I think about promotions has to change. Career pass has to change. Driving our values and driving what we're all about. Like all of that has to change and be better so that we can continue to build something meaningful and be a force of good in everyone's life. So we, we, we got there and we finalized the move from a three tier to a four tier or org chart. And the tiers are, you know, executive, senior leadership, frontline leadership, individual contributors. And that took a while and it happened between 15 and 20 million for us. Obviously depends on the industry. But home service, it tends to happen around that size. And all I can think about is, I'm ready for the next one. Like, I'm ready for the next big challenging plateau. Because this new structure will roughly take us to 40 to 50 million dollars rapidly. So, you know, we expect like, yeah, it took a while to get to 26. We think 40 is at the end of 2026. So two years away, two and a half years away. So it sort of starts to J curve rapidly as you approach the next big plateau. And the next big plateau is, as I see it, the next line of leadership, team leads, a VP line and a C suite. So those have to be resolved somewhere between 40 and 50 million dollars. But I can't back down from a challenge. I don't know, I like it. I think I can do it. I. I'm dumb enough to believe that I'm capable of taking this business to $100 million. And every time we break through a plateau and every time I reinvent myself into whatever the business needs next, I become more and more confident that I am the person to do it. So that's where it's at now. So the mechanics of getting there is we think we have a mostly smooth road. It's sort of like more of the same, up to 40 or 50 million in the next few years. We do have a big challenge coming up, between 40 and 50 million. And we're going to, we see it far enough out that we're going to try to prepare for it as best we can. We're going to bring on the right people. We're probably going to struggle. It's going to be challenging. We. I've never had to do that, just like almost everything else I've ever done in my career. But I think I can do that too. So.

[1:18:48] Host: And sorry, what is the challenge?

Guest: C suite, a line of VPs and team leads. So we expect the. That's going to go from a four, a four tier or chart to either a five or six, which is, you know, every tier you add communication is what breaks and communication is what's going to break a company. And every tier is just a massive new complication of organization. And not even to mention just money, just, just plain money. You know, $20 million business. I had to invest 2.2 million new dollars into payroll in order to break our most recent plateau. That's a lot of money. That's 10% of our revenue and that's what that took in order to get the right people on the team to keep pushing. So massive reinvestment and learning. Great.

Host: Okay, John, well, thank you for the history of the Wilson companies in a nutshell. It's very impressive and very inspiring. I want to now pivot to a couple of these topics that you've tweeted about and just have you riff on them because, you know, even though you're pretty far away now from, you know, the searcher out there who doesn't even own a business, you're, you're in the community, you're seeing it on Twitter, you know, a lot of folks like that, people who have already bought a business or you probably know a lot of searchers who have yet to. So you gotta, you got opinions and you gotta. And then of course, from your perch, you just have a lot of experience on starting with, let's do hiring an operator. What are, you know, that's the idea of buying a business, putting in an operator is this kind of like, you know, thing that's dangled out there. But wiser heads will say it's a terrible idea. At the same time, I have had guests on who have done exactly that and those episodes are very popular. Prove it, because they demonstrate that there is a way of doing this. So what, what, what do you, what do you say?

Guest: I would say I've mostly gotten this wrong and I believe that if I had to do it again with my current knowledge, I would be able to do it well. So the core lesson there is it's possible, but it's difficult. I think the important stuff here is what are you looking for? What are you looking for? What strengths are they going to bring to the table? And how do you get them to know what you're all about? And those are the big complicated pieces that you have to solve when you're bringing out someone to run a business in your name. So experience that's not really just management like management is. It's not very complicated to find someone who's had the title manager somewhere. But what, what knowledge or core competency are they bringing to the table that you just don't have? Most of my mistakes that I've had have been around this idea of bringing on out of industry operators. So that was something that we worked on for a while. We generally believed, hey, if we can find a culture fit or someone that we believe as a culture fit, we can train the trade. And that was dumber than I thought. It was very low success rate doing that. So what we have, what we now do still to this day is like, if I'm hiring an H Vac manager, I'm looking for H Vac manager experience, which most of the books say the opposite. But our hit. Our hit rate on following conventional wisdom is like 1 out of 10. And our convict, our hit rate for following common sense is like 10 out of 10. So following common sense definitely wins for, like, background. Have they done what you're expecting them to do before? Not a complicated thing, but have they done exactly what you're expecting them to do before? So when we're interviewing for that position, we ask granular things. So we're interviewing for an H Vac service manager right now. Hey, what are your tax average tickets? Like, that's the measurement of how well you're going to do here because, like, what are you currently doing? What's your track record? So that was something that we got wrong. Do a lot better at that now. The next one is what strengths do they bring? That's a personality thing. What. What do they bring that you don't have personally? So Brandon is my best example of that. He and I work very well together, and I'm just so blessed to have him. And I hope that he would say the same about me. And we, we just have very different strengths. We don't use the visionary operator thing, but ultimately, like, yeah, I bring a lot of ideas and energy to the table and he helps put them in place. It's more complicated than that. But that's. The general concept is that we are opposites, and that works very well for us. And I would say that that probably works best with. Most people have somebody that has the inverse strengths that you do, and then how are they going to figure out the company? That's a big one. And this is why we've started leaning as the organization has grown and our talent pool is deeper. Like, we would much rather promote from within because they know they get the company, they get the culture, they get what we're all about. And this is. This does not mean you can't do it if you're buying a company. Some of our most successful promotions have been people from acquired companies. Like, they know the company. And just because you're acquiring it doesn't mean that you change the company at all. And what we have found consistently is that promotions inside an acquired company, like taking someone from their team that you believe has greater talent than is currently being utilized and moving them up into the organization to take over the owner's role, is the very best thing that you can do. When you're acquiring a company, we've like five or six times we, we've proved that right. They know the company, they get the culture, they understand the staff, they know the customers and it's a much smoother transition. So I don't think you can't do it. I just think have those things in mind and it's possible. Nowadays we do hire people all the time to basically run either new things or like, you know, the way our business works is we have verticals and teams and each team at this point is a seven figure P and L. So I don't know what size of company the average searcher is buying, but every manager that we're bringing in is going to run a million or multi million dollar business, sometimes up to 10 to 15 million dollars. So like plumbing is going to do 12 this year and when we're bringing on managers, like we just hired a plumbing service manager and he's going to oversee like 5 million maybe of sales. And I see that as very similar to hiring an operator because it is hiring an operator. It's just that you have, we have a little bit more of a base than somebody brand new.

[1:26:34] Host: Great.

Guest: And yeah, so I, I think it's possible, I think it's hard. And those are the three things that I would look out for.

Host: Possible and hard. I feel like that's a theme of basically your, everything that you've done in your story, John. Great.

Guest: I mean you can do anything if you set your mind to it. Just like, you know, buckle up.

Host: Yeah. Buying small. So I won't belabor this. I think everybody in the audience knows, you know, well, maybe I'll give, I'll give 10 seconds. You know, the bigger the company you buy, the better, the more room there is, the safer it is. Can be a little bit counterintuitive to one's emotions because it feels like it's riskier to, you know, be a somebody who goes and buys a business doing a million dollars in sde. So people are tempted to buy smaller, but a smaller business is a more fragile business and in fact the risk goes up. You tweeted at some point this tweet might be a little bit stale now. So you can correct me or correct it.

[1:27:32] Guest: Okay.

Host: Actually said, you know, go buy a company that's doing 500 to a, 500,000 to a million in revenue. So that's a, that's a 200 to 400 SDE business. Pretty small. Why did you say that? Do you still agree with your former self?

Guest: Yeah, in this Conversation. We talked about my journey from a million dollars in revenue to 26 million. You can build something big from something small. And obviously you can build something big from something big. My reasons behind thinking that that's the right move is I have to say it. But I am fiercely independent. So if I'm going to buy something, I have to be able to buy it. Like, just me. I don't want outside investors. I don't want to deal with anybody. I want to call the shots that I think are right. I want advisors, but I ultimately believe that I make the best decisions with the help of people that are smarter than me. So that's 1, 2. I think you can get your arms around it. Like, there is a tangible risk when you buy a small business. And I'm not trying to downplay that. You know, I don't want anybody to be like, ah, you said it was perfect. Perfect. It's not gonna be perfect if you have five employees and you lose one. You lost 20% of your team.

Host: Right.

Guest: Like, I get it. Like, that is a tangible risk. But I like that you can build everything the whole way. It is a safer approach to growth. I've seen plenty of people buy larger companies and go bankrupt in the process. And you can say, you can say anything about that that you want. You can say it was their fault, you can say it was economy, you can say it was whatever. And maybe they weren't even the right person to buy it. And I really think that a lot of searchers, smart folks, they have no idea what is the right. Like, they don't even know what the job is going to look like. They have a conception of what the job's going to look like. But you, you don't know until you get punched in the face a few times on your first day. And I, I think that's it. It's. It is a safer bet to me, despite the tangible risk, like you can replace a staff member, it's hard to move your family out of your house. So The P. The PGs are real. I've seen a lot of bankruptcies from people that just had no clue what they were doing. The business was too big to get their arms around. They didn't understand how to lead teams. They didn't understand how to talk to people. Which honestly, talking to people is a. That's like, that's important. Like, if the only blue collar person that you have ever talked to in your life is the guy changing your oil in your car, like, you shouldn't buy a blue Collar business. Like, you're not going to talk to them. Well, like, they will quit and they probably should because, like, you will likely approach them wrong. And I think people just don't get that. So I think that starting small lets you get your arms around the business, lets you build it the way that you want it and safer. And you can always go buy a ton of companies after you buy that first one. So one, I think it's safer. Two, you want to know how to get deal flow already exist. Like, even if you fake the company. But I get so many dms or, or did when we were actively talking about our search more often, like, man, how do you get so many deals? Like, how do you get so much deal flow? And I'm like, I, I'm in. Like, it is a, it is a very different conversation of like, hey, I'm John from Wilson, you see my trucks on the road? I would like to buy you. Then, hey, I'm, you know, Billy from Ever Pine Capital. I will respect your legacy. Like, it's, it's a different conversation. And I'm going to get way more of a hit rate than you are. So if you want deal flow, buy something tiny. Mike Botkin prove this point perfectly. Like, he bought a tiny little landscaping company, then he bought like 20 more and then he sold the whole thing. You just get more deals as an active participant in the market. So you can always go and buy, you can always go buy bigger ones later. And frankly, it's a lot clearer.

[1:32:05] Host: Just to be clear on your point about deal flow. The point is like, if you buy us, there are more of these small companies to buy, so you can get in the game faster.

Guest: Rather one, one, you get in the game faster instead of two and a half years of search. And two, once you get in the game, you get more deal flow. Like, more owners will just reach out to you. I, we get a phone call a week, like unsolicited. I'm not looking for companies right now. We get a phone call a week asking if we'll buy them. They just call into our main office line. You get just a ridiculous amount of deal flow just because you exist as a, as an active participant. I think it's kind of a hack to end up buying more companies later. So I think it's safer, you can get your arms around, gets you started faster. And it's a hack to get more deal flow.

Host: Okay, John, one other topic and then we're gonna close with a kind of a longer segment on and have you break down the entire universe of home services businesses based on a tweet. A great thread that you did. Okay. Buying businesses overall. So this is acquiring minds. You have grown through acquisition. So maybe this one seems too obvious, like why are we talking about this? But the reason I have this on my list to talk about is because I've seen you in your tweets say both. You know, this is so hard. You know, you guys out here, the fact that this ETA thing is fashionable now and buying boring businesses is.

[1:33:39] Guest: Yeah.

Host: You know, the next way to get rich.

Guest: Yeah.

Host: Is ridiculous. You have no idea what you're up against and what this really feels like.

Guest: It looks like.

Host: And then I've also heard you say, seen you say it is a cheat code. It is amazing. It did unlock. And you've told us it did completely unlock our path. So I've seen you. And I'm not saying those things are contradictory. I just, it's that you're. You, you go hard on both. Kind of the optimism and the pessimism piece of this.

Guest: I, I believe, I believe they're both true. I, I could probably spend a lot of time on this. And I'm going to start with the, I'm going to start with the obvious one which is I did it. So yeah, like it worked. Right. I took a 1 million dollar company and we turned it into a 26 million dollar company and we have a path to a hundred. That's, that's ridiculous. And in no other scenario in my life would something like that be able to happen. So obviously it does work and it is real. That's the first one.

Host: Right? Let's stop the episode there. Let's end on that.

Guest: Yeah. And like I'm, and I'm just going to say this, that sort of the get rich thing, like I already said it earlier in this episode, but money became not a concern for my family when I was in my 20s. Now granted, I started early in my life, but so you can do it. You can achieve your financial and professional goals using ETA as a path. Absolutely possible. The big but that I have is, I think there's a few. So one is timing, depending on the business. So, you know, I've referenced luck a few times. I was lucky that my dad owned a plumbing company. Obviously I was lucky that he was willing to sell his plumbing company to a 25 year old. Those were obviously very big pieces of luck. The other big piece of luck was timing. Like I walked into home service at the. This like perfect window to walk into home service. The Internet was Just becoming a thing. In home service, Google reviews weren't quite established. You know like the biggest competitor in our market was when I started. Like the biggest, like think about the biggest competitor in your market right now in their Google reviews It's probably like 10, 20, 30,000 Google reviews. The biggest competitor in our market which was $30 million a year a decade ago. So big company had a hundred and we had nine. So service Titan was just coming out. There was no other software that allowed a company to run at scale. You want to know how many companies in the US had over 100 trucks before 2010? Probably count on one hand. You want to know how many now? A couple hundred. I mean granted thanks to service titan, you're saying thanks to technology in general. But service titan did have a big piece to play. But thanks to technology in general, Home services went through an uberization. We just don't call it that. But it was hugely disrupted where incumbent players that had had a dominant place in your market were suddenly exposed to guys like me. Like in the past seven years we have been able to take meaningful market share from people multiples of our size because the Internet leveled the playing field. But the playing field is no longer level. So now, hey, now you do have to compete with 10,000 Google reviews. That's really challenging to compete against because Google will give them more leads. Like that's just how it's going to work. They're going to serve them up more. So for this window of time, call it two or three years, the the rules of the Internet and lead gen weren't quite established and the legacy players were not as strong in this new form of lead gen as they are now or they used to be 10 years ago and PE wasn't yet buying so you didn't have these massive roll ups coming in. So there was this two or three year window. And that's why I'm saying I was lucky. And I would say, and I believe Chris Hoffman would also agree. He bought his company the same year I did and he benefited, benefited from the same tailwinds that I did. So this perfect moment of 2016, 17, 18 and 19 where you could establish dominance in an incumbent market. So timing plays a big role is I think my is I think the big thing there. And pick your poison like pick your opportunity wisely. Don't buy a plumbing at H Vac Co. Just because you think it's sexy. The right buy to plum the right time to buy a plumbing H vac company was five years ago. It's a Much different game now.

[1:39:17] Host: And so. So what would you tell people about getting into home services today? Too saturated or just harder than it was still doable?

Guest: I would say harder than it was for a searcher's budget. I don't think that plumbing HVC electric is going to be the right move. Maybe roofing, water treatment's kind of interesting. I think you can back into plumbing, H VAC and electric, but, you know, it's hard to compete with PE with multiples. So I, I would personally not do it, but, you know, I don't know.

Host: Well, but this just reinforced if you really want to get into home services, plumbing H vac, this just reinforces your earlier point of buying small. It's the only way you could get in because a PE company is not going to buy a $500,000 revenue or. Yeah, let alone revenue.

Guest: There was. I talked to a company the other day and they were doing like 2 million bucks in plumbing, and they had 800 Google reviews. Like, that's outrageous. That's amazing. So, like, you can play the game. Like, you can get there. It's just you, you have a harder time than you did five years ago. That's not saying it's not worth doing. I do think it would be very difficult today to pay 10 times on a, you know, 15, $20 million business and then have to compete against somebody that knows what they're doing in this industry. So I, I think that that would be a tough game. Like you have a lot less of a ramp to figure stuff out. But roofing, I think there's tangential and I, I like the idea of buying something and backing into an industry. Big fan of that. Cheaper multiples and you can get a little bit more creative. So if you want to get into plumbing, then buy a septic pumping company that's going to trade at hardly anything. Add drains, then you add plumbing, or go buy a duct cleaning company that you can buy for like one and a half times earnings at H vac, go buy a chimney sweep company at H vac so, like, you can end up there. You just have to be ready to build. But like, buying a straight plumbing hvs electric company right now, probably not a great idea.

Host: Okay, John, let's. Now that you're starting to talk about different verticals within home services broadly, let's close out with this great Twitter thread that you did, which is really was really like a primer on home services. And so it's long. Maybe we won't get to all of it, but I'm going To walk you through a piece or two of it. You start out by talking about the kind of four tiers of home services businesses.

[1:42:02] Guest: Yeah.

Host: And so I'll, I'll kind of give you bullet points and then you, you fill it in for us.

Guest: Yep.

Host: So the four tiers, the first one was what you called the white collar of blue collar, Big tams licensed moats because it requires licensing. And those are the ones you just keep that you've been referring to H Vac, plumbing, electricians. What did you mean by that is, and by tier one, does that mean

Guest: the best or what? So when you're thinking about home service or service companies in general, there's a bunch of differentiators. I think we're probably going to talk about all of them, but staffing is one of the biggest ones. Like who is the type of person that you're about to work with? Blue collar? I don't ever really use the word blue collar except for if I'm talking to someone on Twitter. Like it's not like this is, I don't know, they're just people. But like someone that's going to climb up on a roof in 100 degree weather in Texas is probably not having a lot of great options in their life. You see a lot of exons, a lot of drug addicts, lot of, lot of alcohol addictions and a variety of other problems. And that's sort of one end of the labor spectrum is like fresh out of prison, he doesn't have an option so he's going to do your roof work. The other side is a highly experienced 20 year craftsman that is paid multiple six figures and that is where you find plumbing, H vac and electric. So these are two, you know, very different people, very different skill sets, very different backgrounds and very different perspectives. So I think people come into these businesses and they're like, ah, blue collar. And it's like not at all. You know, these are completely different ends of the labor pool and you have to decide which one you want to work with. So I, that, that was the point that I was trying to make with the white collar. Blue collar is this is, this isn't some guy who's, you know, fresh out of prison. I mean maybe for some companies, but this is likely a highly experienced, very highly compensated craftsman.

Host: And so is another way of thinking about that. Basically the spectrum of skill from unskilled

Guest: to skilled spectrum of skill. How big is the labor pool? Like it's probably not very complicated to find ex cons that need a job. So you can find more people, but your turnover is going to be high. You're going to have to, you're going to deal with a lot of stuff. And I think that was the other side is who do you want to work with? Most people that I know that have run a roofing company have had a gun or knife pulled on them at some point by their own employees. I, I actually can't think of anyone that's never had that happen, so. And yeah, I really can't. I can think of like 10 or 12 roofing company owners like that.

[1:45:10] Host: They've all had a knife or gun pulled. Physically an employee?

Guest: Yes. Physically threatened with a weapon? Yes. So that is one end of the labor pool. And personally that's not really an end of the labor pool that I want to deal with. Like, I'm good, I'm all set. What I do like doing is I like working with smart people that care about their craft. But the downside of that is it is very hard to find them. And the labor market's tight and compensation is ridiculous. So it's just much more competitive. So that, that was the difference I was attempting to make. So that, that's one of the things that sets these tiers apart is like who are you going to be working with? How much is your turnover going to be? What's recruitment look like? Will you be physically threatened with a weapon? You know, that stuff matters when you're thinking, when you're thinking about buying a business.

Host: Well, another thing that matters, which is brings us to Tier 2 is the, the TAM, the size of the market opportunity. So Tier 2 you have is low TAM as opposed to Tier 1 was high TAM. Yep, low TAM, no license and some service slash install. And so your examples here were pool service, garage door damage, remediation.

Guest: So elaborate there TAM is total addressable market. How many, how many people are willing to pay you money? For example, in Chicago and in Phoenix, those are currently the only two cities that have this. But in each of those cities there is a 250 million or higher plumbing, H vac and electric home service business. That's huge. That's like a very obviously a very large business. So everyone, every house has heat, every house, you know, needs hot water, everybody needs ac and everyone needs power. And you need those visits frequently. So two visits a year from H Vac, one every two years for electric and one a year for plumbing. That's like average. And garage doors, obviously Tommy Mello has built a really big company, but how many times do you have your garage door Guy out. Probably not many markets, just the, the mark is just smaller. Like you have less need for that service damage, remediation. Like that's a big addressable market. So I'm not sure what I was thinking with that exact one. And then what was the other one? Well, yeah, again, yeah, that's a small tam who has a pool and the ticket tends to be low with pools as well.

Host: Yeah, well, so it's regional because in, in Phoenix, you know, in Florida, Texas, you can have a big pool.

[1:48:01] Guest: So my, my point here is when you're thinking about a business, what's the biggest they can get? Like how, how big can you take it? And if there's not an example in one market, like Tommy Mello is not in one market, 200 million. And they have like 100 some locations, precision and all these other garage door companies, they're big. So like, you know, as I say this, someone's gonna be like, no, there's a billion dollar garage door company, I bet, and I bet they also have like a thousand or two thousand locations. How big can you get in one market? So that's how I see the, the opportunity.

Host: Well, and the other thing that was a difference between Tier 1 and Tier 2 was licensed versus unlicensed. Anything more to say on that is that just go back to the kind of general moat.

Guest: Yep, general moat labor. And also what you're able to pay like it is, there will always be a, a neighbor kid down the road that will mow your lawn for 20 bucks. And probably until the end of time that kid will always exist because it doesn't take any licensure to do that. So you have to distinguish yourself in different ways. Whereas with licenses, that sets a bar for the total number of competitors that you can have. So it's a moat as far as who can compete.

Host: Great. Tier three, you have described as kind of all service, no install, always small, tough labor. So here is the lawn cutting. Here is window washing, power washing.

Guest: Yep.

Host: So, so talk to you a little bit, talk to us a little bit about when you say all service, no install, what are you getting at there?

Guest: Yeah, and I'm going to start with this is a personal preference. So my personal preference of a business that I like to run is a business that has a service and install component. I think that that allows for a smoother path to growth. And the reason I like that is two different things. Leads are cheaper. So if all I was ever doing was replacing H Vac equipment or water heaters, my cost per lead would Be high, a lot higher. And, and I would have big peaks and valleys depending on demand for that service. Service install allows you to get leads significantly cheaper, like 10 to 20 times cheaper, as well as create a new profit center and feed the install departments. So that is my personal preference is. I like that. I think that that is a sustainable way to scale a business is you have a low cost feeder into a value ladder where eventually you get the

Host: big ticket and low cost feeder into a value ladder. For the uninitiated, what do you mean give us more on those?

[1:51:02] Guest: Hvac is the best example. Second best is drain cleaning. But so H vac, hey, we're going to do a 98 tune up. That's the low cost feeder. So we're going to come in, we're going to do this tune up twice a year on your home for 98 bucks. When we're there, we're going to offer you options. So now we're inside the value ladder of things that add incremental value to us as well as to the homeowner. And the bottom of that ladder is, or the top of that ladder, however you want to look at it, is the system replacement itself, the large ticket. So we get in there for 98 bucks. Let's say our conversion rate is 60% into something higher. So maybe that's an air scrubber, humidifier or filter change or something small. So instead of $98, maybe the average ticket is $1,000 and one in five becomes a piece of equipment. So which is, you know, $9,000 average ticket or $10,000 average ticket. So it starts off at $98, could become $1,000 and one in five becomes 10. So that's the, that's the value ladder. So I like that style of business. I think it's sustainable. I think it reduces peaks and valleys. And if you look at the growth of our business over the last two years, three years, it roughly agrees. So despite H Vac being very known as seasonal, my, my growth like literally looks like this. Like it's ridiculous regardless of season. I think I posted a picture of it on Twitter because people don't believe me. And it's that service always feeding install that makes that possible because we will always have fresh leads, even when the weather's not conducive to what we're trying to do.

Host: And so just to be clear, when you say install, you mean the install is the big ticket? The big tickets, right. Install as a new system, basically.

Guest: Okay, so.

Host: Or replacement.

Guest: So I like businesses that have both I think that that is a sustainable way to grow a massive business. And when I see businesses that have both, I get really pumped up because I'm like, that can be huge as long as the TAM is big enough. Like, are there, are there enough people to serve that to. Garage doors is a great example. They have a value ladder the same as plumbing H vac. I just think there's a smaller market for garage doors. Okay, so that's the type of business I like. So the next two tiers, tiers three and four are either side of that spectrum. So one is all service. So that means, you know, that $98 thing, that's all they get. There's no value ladder. Or maybe the value ladder only gets you down to like 500 bucks with up sales. So that's power washing. Like, hey, well instead of just power washing your driveway for 200 bucks, we'll power wash the house for an extra thousand. Something like that. Obviously that's good. It's just not $10,000. So you just can't grow it that big. And on top of that, the TAM is small. Like how many people are going to do power washing? I don't know, but I know that I've never done power washing and I live in a nice house, so I assume most people are like that. I really don't know. So window washing is another one. It's all tickets, right? Like, yeah, maybe get a big contractor or whatever. So, so there's no, like, there's no big bottom of the ladder where you can build up to something large and you can upsell your way and prove enough value and do all that. So, so there's like no end, which I don't, I don't like. I like the journey. I like the customer journey. I think that's cool and fun and I think we get to provide really good value to customers. So that's all service, all installs. The opposite. Hey, so it's, it's lumpy. And, and that's what I don't like about that is I want to build a big sustainable business that self feeds like out. Like the business should just like, should be a flywheel. I like, I like this idea that marketing feeds, call center, call center feeds, service service feed, sales, sales feeds, install and install feeds, accounting. And my, like, most of my job is just keeping that flywheel going. Let's get more leads, let's serve those leads, let's hire more techs, let's sell more stuff, let's install more stuff, let's pay our Bills on and on. And I think that's sustainable. And it's a very like step by step way to grow. I think that install only is tougher. It's a very, it's project based.

[1:55:44] Host: Get give us examples of install only,

Guest: foundation repair, roofing, right Massive tickets, right? Remodeling contractor, GC work, 30, 40, 50 grand. Average ticket, ridiculous average tickets. But like if you have no leads, you got nothing. Like that's just it, you're starving and you got to go hunt down leads. So I just don't like the inconsistency. I think that that is a difficult way to grow a business. So like yes, the ticket size is huge, but it's not consistent and it doesn't feed itself continually. And the flywheel is more like market sell, market sell. It's not, it's, it's not, you can't machine it. Like in plumbing, HVC and electric, you can sell a membership and then that person gets four visits a year. So every day we sell more memberships. So every day our flywheel gets bigger. Every month I can bring out a new person to run those new memberships because we brought on two or four hundred memberships a month. So every month our flywheel is just getting larger and larger because we're continuing to compound our efforts. And that's what I like about that style of business is your efforts actually compound. You get recurring customers, you get contracted customers that you can get into a value ladder to achieve the big ticket and either service or install doesn't have that component. So if you want to scale up and install project only business, you're spending more money on ads. You don't really have recurring customers. Like you replace a roof once every 20 or 30 years, you're not going to do many foundation repairs. So that's what I don't like about that. It's feast or famine and I don't think it's a sustainable way to get to 100 million.

[1:57:34] Host: Well, and that, that's an important, that's an important criterion that you just said is you, you are coming at this from the perspective of getting really big because that's the league in which you play. That's your next goal. 100 million. Yeah, so. So a lot of people listening here would be happy, would be happy growing into a $15 million business. And you probably could have these business, these other, in these other tiers. Maybe not a garage door business, but a foundation repair business. You could get to 15 million.

Guest: Yeah, I think so. If, if very biased. This is coming from my perspective and I set out on this journey to build something meaningful and to build something big. So I've never looked at it from any other perspective other than that.

Host: Yeah. Yeah. So that would be the question for the audience, for the searcher to ask him or herself is how, how big a business do I want to build? Is it important to me to get to a nine digit business, nine figure business? Maybe not.

Guest: So maybe it should be though. Listener. I'm just tossing that out there.

Host: John, we're approaching two hours. I'm going to have to let you go. This has been rich as I thought it would be an amazing story, an inspirational story and then an education on the lay of the land and home services. So we could keep going for another hour, but it's late for, for you and me both. Yeah. What, what haven't I asked? What do. What would you want to tell people? Searchers, home services? Anything you have. You have so much to share. But is there anything you want to leave the audience with?

Guest: I think the big thing, I don't know that I finished the. And it'll be quick but though why it's hard. It's hard because you have no idea what you're getting yourself into and the only way you'll know is by doing it. I'm sure I wouldn't have listened to someone that told me, gave me the same warning. I'm sure that I would have said I'll figure it out. Which obviously I did. But one of my biggest learnings over the past decade of watching other business owners and other people attempt to become business owners is this is not meant for everyone. And what I, I obviously I, I laugh and I joke about all the many mistakes that I've made, but I did get all the core stuff right. And I think that many people don't or are incapable. So I, I think the, the, the thing that I want to share is be cautious. I used to think that everyone could do this and I now understand that they can't. Not everyone can do this. I suspect most people are either incapable or unwilling to make the sacrifices that are required to do this. It's painful. You learn a lot about yourself and about a lot of other things, but it's a, it's a difficult road. So if you're gonna do the leap,

[2:00:37] Host: John, what do you think? What do you think the most unexpected hard bit is?

Guest: Ah, man, pick a thing. I mean, I mean I, you could pick almost anything. Have you ever hired and fired executives? Have you ever done mass layoffs? Have you ever shut down, like seven figure business units with teams attached to it? Have you ever burned down a house? Like, like, pick a thing. How many times you've been stolen from? All right, turn that into every day. Like, you're gonna get stolen from every day by. By somebody. Yeah. It's endless. So, like, it. You know, every day is a new punch in the face and you gotta. You have some thick skin. And that's why I've started to. That's one of the other, like, why. Why it's good to start smalls is you get your thins, your skin thick, sort of like graduate into it or even just starting from nothing. Like, I'm kind of pro franchising right now. I think. I think that's good. And I think that gives people a lot of, like, direction. I don't know. I'm personally just tired of watching people go bankrupt because they had no idea what they were getting themselves into and also weren't capable of doing it. It's discouraging. I don't like it. I am sad for the people that it affects. And I've had to see a lot of people go bankrupt. So I like it.

Host: These are. And these are searchers.

Guest: Yeah, Friends. Searchers. Yeah. Yeah. It's real. It's real. Like, I think Twitter only talks about the good stuff. And what I attempted to highlight in our talk today is I obviously did the core stuff right, but, like, there was a lot of things I did wrong and any of those could have been really bad.

Host: Okay, John. Well, we're. We're. No, no, it's that it's really important for that to be communicated. We. We do try to highlight that it's not all rainbows all the time, for sure. And I. Yeah.

Guest: 10 friends that went bankrupt in the last 12 months. Like, it's ridiculous. Yes. Yeah. It's crazy. Lost their house. Yeah. Like, it's kidding. I really wish I was.

[2:03:00] Host: Is this because something is going on or is this just.

Guest: They were prepared. They didn't understand the business. They didn't understand the industry. They weren't the leader that they thought they were. They weren't as capable as they thought they were. Just because you're smart. Like, I don't think I'm that smart. But we've been able to do this. I think it's because I'm stubborn. But those are like. I don't think it takes a brilliant person to do this. I think it takes a lot of grit and a lot of humility to approach things right. And it Takes a lot of research into what you're actually about to do, and, like, more research than seems to happen. People get caught up in spreadsheets and not really like, oh, here. Here's the people I'm going to work with. Like, I might have a knife pulled on me if I buy a roofing company. Like that is. That is a reality of buying a roofing company.

Host: Or, John, how much of the fact that you kind of grew up in the business and just kind of intuitively understood it, it wasn't. It wasn't foreign territory for you, do

Guest: you think that helps? Leaps and bounds. Leaps and bounds. And if you look at other people that also have large. Like Brian Beers is a great example. Like, if you look at Brian Beers and what he's done. What he's done is incredible. Like, he's done something absolutely amazing. He also grew up in a Midas franchise. His dad had a Midas franchise that he grew up in the same way that I grew up in the plumbing and H vac business. So I'm not saying that it's impossible for someone else to follow Brian's footsteps, but Brian knew that business like the back of his hand before he was 18.

Host: Yeah.

Guest: And that is a totally different thing than you random person from Evergreen Capital who's going to respect someone's legacy.

Host: Yep.

Guest: Yep.

Host: Can we go back to the part where you're growing $100 million business from $1 million in revenue?

Guest: Yeah, like, it is possible. Like, we're going to do it. 26 million this year. That's crazy. We just did 1.7, I think 5 in January, which is know, wild. That was my entire revenue and my first full year of ownership. So you can build something big from something small.

Host: All right, John, well, where would you like people to go? Your podcast, your newsletters?

Guest: Yeah, if, If. If you want to hear more about what we're talking about. Owned and operated dot com. There's a newsletter, there's a podcast, and then you can find me on Twitter at Wilson Companies.

Host: John Wilson. What a joy.

Guest: This was fun.

Host: Glad I finally made this happen.

Guest: Yes.

Host: This is a bit of a feather in my cap. Just kind of personally for me, you know, your name was in lights for me for a long time, so it's really cool that you. I. I'm at the point where you'll come on my pod.

Guest: I had a good time.

Host: Great. Thank you, sir.