August 19, 2025 • 40 mins
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How do you take a family plumbing shop from $1M to over $30M in less than a decade?
In this episode of Profit & Grit, John Wilson, CEO of Wilson Plumbing & Heating and host of Owned and Operated, shares his raw journey of scaling through acquisitions, fighting through financial chaos, and building a leadership team capable of running a $30M+ operation.
You’ll hear how John turned low moments including lawsuits, a $800K accounting mess, and explosive growth that nearly broke the company into lessons that shaped his business into a true platform company.
What You Will Learn in This Episode:
• Why clean accounting and multiple “eyeballs on the numbers” are non-negotiable for fast-growing businesses
• How to prioritize sales above everything else to fuel sustainable growth
• What really happens when you grow from 30 to 150+ employees in a few short years
• Why M&A can be powerful for companies in the $3–5M range but also where it often goes wrong
• John’s vision for building a $100M+ company and what it takes to get there
Listen now to hear John’s unfiltered lessons on scaling, surviving setbacks, and turning a blue-collar business into a thriving enterprise.
More From Profit & Grit
Book your complimentary Financial Insight Session with Tyler Martin, fractional CFO for home services and the trades, here:
https://calendly.com/tylermartin/intro-meeting-cfomadeeasy
Learn more at cfomadeeasy.com
Follow the show for weekly interviews with HVAC, plumbing, and home service owners and experts who share what it really takes to grow, scale, and profit in the trades.
If you listen to any of the following shows, we're sure you'll love ours too!
To The Point Home Services Podcast, Toolbox for the Trades, Masters of Home Service, Home Service Business Coach With David Moerman, BlueCollar.CEO, The Home Service Expert Podcast, Next Level Pros, Blue Collar Business Podcast, Home Service Millionaire with Mike Andes, The Contractor Fight with Tom Reber
🎙️ Profit & Grit by Tyler Martin
Real stories. Real strategy. Real results for service-based business owners.
🔗 Website: ProfitAndGrit.com
📍 LinkedIn: linkedin.com/in/thinktyler
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Tyler Martin, a fractional CFO for home services and the trades
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
The next three or four months I was sued four or
five times in like just onrepeat this lawsuits kept
showing up, kept showing up,kept showing up and we're just
like what is going on and wefind out our accounting team
misplaced around $800,000.
So that was probably the worst.
I was sued eight times beforemy birthday of 2024.
Speaker 2 (00:23):
Welcome to Profit and Grit with Tyler, where
blue-collar owners and insidersspill the real story behind
their hustle, buildingbusinesses that thrive through
sweat and smarts.
We'll dig into their journeys,from scaling chaos to growing
the bottom line, with lessonsand grit that pay off big.
Here's your host, the bluecollar CFO, tyler Martin.
Speaker 3 (00:46):
Today's guest, john Wilson, has one of the most
remarkable growth stories in thetrades.
In less than a decade he'staken his third generation
plumbing business from $1million to over $30 million in
annual revenue.
He's done it through a mix ofgritty turnarounds, strategic
(01:06):
acquisitions and relentlessfocus on sales.
We get into his lowest moment,including the time an $800,000
accounting mess nearly broughtthe business to its knees, and
how he fought through it.
We talk about hitting those.
We've made it milestones,building a leadership team that
(01:28):
runs without you, and why $100million is just the next step,
not the finish line.
Hey, john, welcome to the Profitand Grit Show.
How are you doing today?
I'm doing great.
Thanks for having me on.
Yeah, great to have you.
I hate to sound like a fan boyout the gate, but I guess I will
.
I listen to your show all thetime A lot of really great
(01:49):
wisdom that you always shareyour stories, your guests.
So I just want to start outthere with owned and operated is
how I know of you and I justhave the utmost respect for you.
Speaker 1 (01:59):
Awesome.
I'm glad you're getting somevalue out of it.
It's a fun hobby that seems tohelp a lot of people yeah.
Speaker 3 (02:04):
I think you passed up with the, with the in-person
studio.
You may have passed up the, thehobby part of it.
Speaker 1 (02:09):
I passed hobby.
Yeah, I might've, I might've.
Speaker 3 (02:13):
It sounds like those wheels are spinning man.
In terms of the opportunity,here is what I'm seeing, but
good for you.
So, hey, what I'd love to startout for.
The audience that doesn't knowabout you, which I'm sure very
few, Tell me a little bit aboutwhat you do and your story.
Speaker 1 (02:27):
Yeah, so I'm John Wilson and I'm a plumber from
Akron, so I have a plumbingcompany.
It's a third generation familybusiness called Wilson Plumbing
and Heating and we'll do around$31 million this year.
We bought it eight, nine yearsago and we were doing a million
dollars at the time, so we'vehad a tremendous growth story so
(02:50):
far.
We've used a lot of M&A inorder to get there.
We're all self-funded, so, youknow, internally owned, and
we've also, you know, justlearned how to run a great
business.
So over the past I used M&Abasically to cross into eight
figures, into the $10, $11million mark, and then from then
(03:10):
on so really the past two,three years we've been purely
organic growth Cool.
Speaker 3 (03:16):
So let's start there.
Frame this for me I'm sure youhad a really down moment as
you're going through all thisgrowth, and probably maybe even
your worst moment.
Can you share that Like did youever hit a wall?
I'm sure it wasn't all rosesand sunshine.
Speaker 1 (03:31):
Yeah, I think I mean there's a few that come to mind.
I mean, you know, there's anearlier one there's probably
like three big moments in mycareer where it's like, is this
going to work?
And one of them was actuallylike not even that long ago, it
was probably just about twoyears ago and we had an
accounting department and whenwe we bought all these
businesses uh, we bought ninebusinesses over the years and we
(03:55):
bought three of them in 2021.
And when we bought those, wegrew from 29 employees, I think,
or 30 employees, to 105 in like130 days.
So it was obviously a lot.
And during that time, we onlyhad 30 employees when we started
.
So, like, aggressively growingvery fast.
(04:18):
So what that meant was we didn'thave a good accounting team.
We didn't have a good HR team.
We didn't have a good HR team.
We didn't have a good a lot ofteams because, like, how could
we?
We had 30 people.
You know contrast that today wehave 152 people on that team.
So all of those teams are good,but but at the time, even just
(04:39):
two years ago, you know, we were, we were running a gun and
trying to figure out how to growan accounting team, and I'm not
even picking this as the worstmoment because you have CFO made
easy on your shirt.
It literally just was the worst.
So at the end of 2023, mybrother died, and so I wasn't in
a great frame of mind.
(04:59):
In the middle of while I wasworking through that, my
accounting team basically lost$800,000 worth of bills.
Wow, so I'm not in a greatframe of mind.
We had actively merged fourbusinesses together, which means
we merged four QuickBooks filestogether.
It was a very complicatedtransaction and in the process,
(05:21):
I had not upgraded my accountingstaff to be able to support
that type of transaction, and inthe process, I had not upgraded
my accounting staff to be ableto support that type of
transaction.
I did bring in external expertsto help us, but they did a very
bad job and we've had to paymultiple six figures now to fix
it.
But in that process, wedisconnected a few things and
they basically misplaced roughlyaround $800,000.
(05:44):
So, uh, it's on on one hand,it's a lot of money and on the
other hand, it's like not thatmuch money but it's a lot of
money when you're growing at thepace you are in.
The balance sheet was stilllike getting stabilized from
acquisitions.
So so my, my brother passesaway, uh surprise, uh, you know
he was a young guy, had a heartattack.
And then the next three or fourmonths I was sued four or five
(06:08):
times in like just on repeatthis lawsuits kept showing up,
kept showing up, kept showing upand we're just like what is
going on and we find out ouraccounting team misplaced around
$800,000.
So that was probably the worst.
I was sued eight times beforemy birthday of 2024.
Speaker 3 (06:26):
Wow, so you know, just to dig a little deeper, I
mean, were you really like at apoint, like man, because you
kind of seem like a fighter tome Were you really serious, like
hey, I'm not sure if I want todo this Like, is this all worth
it?
Were you, was that really astrong emotion, or was it more
like just one or two days?
Speaker 1 (06:50):
You were kind of like this sucks, and I'll wipe off
my knees and figure it out.
Well, I mean, it was a lot therewas a few moments where we
thought we thought we were goingto go bankrupt, Like for sure.
We went from a positiveearnings to a negative, a
negative, like basicallyovernight it was a total shock.
We had vendors banging down thedoor and we didn't really know
what we were supposed to do inthat moment.
Like we had vendors bangingdown the door and we didn't
really know what we weresupposed to do in that moment,
Like we had no idea.
You know, we had low moments,but that was a pretty tough one.
(07:11):
So we ended up.
I mean, obviously we ended upgetting through it, but in a
fight or flight I tend to fight,yeah, so we did do it, but I
mean it was dirty.
Speaker 3 (07:22):
Yeah.
What was your takeaway fromthat?
Did you just try to bite toomuch at once?
Is that the takeaway?
Speaker 1 (07:27):
No, it was clean accounting, like that was the
takeaway I had.
It was really just like, pureand simple, there should have
been more eyeballs on this.
So, like the way that we thinkabout this now because, like the
downside, it ended up being atwofold problem.
So, on the one hand, like hey,we have a, this is a balance
sheet issue, right, like we havean undisclosed liability of
(07:51):
nearly seven figures that we nowhave to handle and it's a
surprise.
So that's the balance sheetproblem, and that is a big
enough problem in and of itself.
The more complicated problem isit was also a P&L problem
because suddenly we had $800,000of expenses that we didn't know
(08:12):
existed.
So we thought we were runningat X gross margin and we weren't
.
We thought we were running atthis material and we weren't.
So all of this expense came outof nowhere.
So we had to reformat thebusiness to run it basically 20
points higher, because we didn'tknow that was happening.
So it was a P&L and a balancesheet turnaround, which is hard.
Speaker 3 (08:34):
John, were you all like did this event of you know,
having this unrecordedliability and dealing with the
financial changes did?
Were you always comfortablewith the balance sheet and
financial and the incomestatement at that point?
Or was it like, oh man, I'vegot to immerse myself in this
now and become a higher level Idon't know about an expert, but
a higher level where you reallyunderstood it?
(08:55):
Because what I see a lot oftimes business owners.
As we're growing and building abusiness, financials are an
afterthought.
We're looking at cash, cash andbank and you mentioned balance
sheet and probably 50% ofbusiness owners don't even
really know what that is, maybeeven higher than that.
Speaker 1 (09:09):
Yeah, I would maybe call myself an expert now, but
before then I was strong Likethat was.
I didn't finish college, butthe college that I did attend
was for accounting, so I wasvery comfortable around all that
.
What made it complicated wasthe merging the four different
QuickBooks files into onesingular file and things getting
(09:32):
basically disconnected in theprocess and us just not catching
that disconnect.
Speaker 3 (09:37):
Plus, I would assume now you go from 30 to 100 people
.
That's a lot of moving parts,like that's a lot of culture
change.
Speaker 1 (09:44):
Yeah, when there's always a bigger fire like that,
that ended up being what it was.
You know, like HR is a fire,accountings, you know, and you
sort of just like band-aid thosetogether because, much more
importantly, like hey, sales isa fire, this trade's a fire.
Like I got to recruit over here, I got to fill this team, so
there was always just a biggerfire.
So the way that we think aboutlike our support teams now to
(10:06):
sort of like what the lessonlearned was a lot of eyeballs, a
lot of redundancy, includingexternal.
So I'm not intentionallyplugging again the shirt you've
got on, but like we are a bigfan of, like who's watching the
watchers?
I've most friends, that of minethat run a big business have
been taken for a million dollarsor more.
Wow, so what's your auditprocess?
(10:28):
Like what's your close process?
Like how tight is it?
And that's for accounting.
But also like HR, like who'swho's confirming that you're
compliant, because HR is becomesa whole situation after a
hundred and I think we had noidea what we had built.
Like we didn't know if we wereand nobody does, and everyone
thinks they're compliant, andthen you find out you are not in
(10:51):
the ballpark.
Speaker 3 (10:52):
Wow, Wow, hey, one, one question I've always been
curious about since you acquiredthis business through I believe
it was your grandparents haveyou always had the support,
Because I'm sure that yourfamily was kind of maybe set in
a certain way in terms of seeingthe business for a long time
and being at a certain size havethey always been very
supportive of all this growthand ambition and changes?
(11:15):
I mean, I'm sure it's easiernow than it was maybe when you
were going through the mergersand things weren't going your
way have they always been reallysupportive or they've been like
man?
Why are you taking all thisrisk?
Speaker 1 (11:25):
Yeah, the latter.
My family preferred thebusiness small, so it ended up
my dad.
We did the transaction in twodifferent steps.
So the first one, I bought 49%in 2016 and in 2019 I bought
another 49%, and it was becauseof that exact issue.
I was ready to take on morerisk, I was ready to scale the
business a little bit moreaggressively and he was not, so
(11:46):
I bought out sort of the rest.
Speaker 3 (11:52):
Got it Cause you see that so many times, even in my
own life.
When I went out to business formyself, you know my dad, long
time blue collar worker, waslike dude, you're crazy, you're
making X, y, z at this company.
You're going to leave it and gomake nothing.
You're insane.
And so it wasn't.
It's interesting how, you know,different generations have
different perspectives and it'ssometimes hard to get those to
connect.
Speaker 1 (12:10):
Yeah, I think, uh, you know it's easy now, yeah,
it's easy now to look at it andpeople be like, oh yeah, like
you did it, you're successful,you're uh, whatever.
But like sure, yeah, there's150 people, it's a big freaking
business.
Like, yeah, totally makes sense.
But on the way up, I saw it, mywife saw it.
Speaker 3 (12:29):
Yeah, yeah, that's cool.
Okay, I want to flip the scriptnow.
So we talked about kind of thebad.
Let's talk about where did youhit that point where you go oh
my gosh, I'm not a plumbingcompany anymore, I am like a
real operation that's got realscalability.
When did that?
When did that hit?
Speaker 1 (12:44):
you.
I think that hits me often.
I think, an important thing tonote.
So I bought the business.
I was very young and I was 25.
And my original goal for thebusiness was, by the I want I
had five years.
I said, hey, I want to have theoption to sell this business
when I'm 30.
At the time, like the fat thiswas nine, 10 years ago the fat
(13:08):
fire movement was like a thingand like everyone was like
what's the least amount you canretire with?
And I was like, well, if I sellthis business in five years, I
think that I can be amillionaire by the time that I'm
30.
So it was really likeeverything was designed to
personally make me a millionaireby the time I was 30.
So I started, which I think is areally important distinction,
(13:30):
because a big part of the reasonthat we grew and the reason
that all this happened is I madesure to never make myself that
important of a piece, because asaleable business can't have an
integrally tied owner.
That's just like one-on-one.
So from the beginning I alwaysthought it was a scalable thing
and that was always the plan.
(13:51):
So we did it and it's easy nowto look back and be like nice
job.
And I was like, yeah, that wasyou know, that was we.
I did what we said we weregoing to do.
So I always thought that Ithink, as the business grew
bigger and bigger, like there'sbeen different moments of that.
So sometimes it's a revenuegoal like oh man, we did a
million dollars in a month.
That's crazy, that's cool.
(14:11):
We've started doing like morerevenue in a month than I used
to do in a year and like that'scool.
Like last month we did more inrevenue than I did in 2018,
which like that's like all right, that's pretty sweet.
Uh, I think October I hope wedo more than I did in 2019.
So it you know that those winsstart to stack up and that feels
(14:31):
pretty real.
I'd say the.
The biggest like we made itagain has been watching our
senior leadership team likereally, uh, take on like real
responsibility anddecision-making power, and
that's been something At everystage of your business.
You have to be this differentversion of you and hopefully a
(14:54):
better version of you that theteam needs in that moment and in
that time period for thebusiness, and I've always been
hyper aware of that.
I'm not saying I've done itperfectly or well, most of the
time I probably haven't, but Ido think I've tended to get the
biggest things right and forthis current stage and I've been
in it for like six months nowis, hey, what the team needs.
(15:14):
If the team needs to like thesenior leadership team,
specifically like six, sevenpeople, they need to be able to
fully competently run theirdepartment without me in any way
at all.
Like this needs to be afunctioning senior leadership
team that, like I can coach, Ican mentor, I can give input,
but then I also need to be ableto go on vacation for two weeks
(15:36):
and the business be better thanit was, which is what just
happened.
I just got back, actuallyMonday, so yeah, so I think like
that's been our most recent,like my president Brandon and I,
my partner, he and I have beenworking together, for this is
our sixth year and like we talkabout it a lot, like we just
like we built this business.
You know I've owned it forlonger.
I did have three years withouthim, but he and I built this
(15:59):
business and we like we watchleaders come and go, we watch
people grow and figure stuff out, and like this current stage
for both him and I is just sosurreal because, like two years
ago, like we were functionallyrunning teams and like we were
standing up the accounting teamfrom scratch, we were for the
(16:20):
third time, we were standing upHR for the third time or fourth
time we were building amarketing.
For the third time, we werestanding up HR for the third
time or fourth time we werebuilding a marketing team.
We like we were like reallylike ingrained and now we're
just not, which is good, like itmeans that we're doing our jobs
and we're doing the things thatI should be doing.
I, you know how are we drivingorganic or inorganic expansion?
What's next for the wholeorganization?
(16:42):
So that's been our most recentlike holy shit, I think.
I think we made like anenterprise here.
There's 150 people here andthey're driving, which is
awesome.
Speaker 3 (16:52):
Wow, do you guys follow any type of methodology,
like an EOS methodology oranything that allows you to
bring your teams together, yourleadership team in particular?
Speaker 1 (17:02):
Yeah, yeah, we've been on eos for probably four
years.
I think it's helpful.
It's a good way to communicate,good way to report.
We like early stages.
We're probably going to move toscaling up here shortly.
Like eos seems to struggle, thebigger you get like, yeah, we
we've tried to roll it more andmore and it's just like it
breaks every time.
So we just we stopped and we'relike all right.
(17:24):
So we only have four teams likefunctionally using EOS, and
every time we've tried fulldeployment it's it's just so
cumbersome to the business, itjust doesn't make a lot of sense
.
Speaker 3 (17:36):
But yeah, eos, to your point, scaling up does have
more bandwidth, I think, for alarger model that it can support
.
I think you know EOS is awesome.
I would say.
In my opinion I'd say $10million and under.
I mean, obviously businessesare different, but generally
when it's kind of like a smallone leadership team, I think,
(17:57):
with a handful of main players,maybe five to ten, I think it
works really good.
Once you get more complex thanthat and it sounds like what
you're experiencing it does geta little bit cumbersome.
Speaker 1 (18:07):
I mean we're a, we're a six layer org chart.
So yeah, it's a bit much Wow.
Speaker 3 (18:19):
So it sounds like, in terms of your maturation, you
guys have gotten to a pointwhere you're hands off, you're
in a visionary role, which isawesome.
Your president it sounds likeprobably his leadership team is
reporting into him.
He's even gotten each littlepod doing its own thing, so it
sounds like you guys are at apretty cool place, what you know
.
One question I want to ask you,I think we're just to clarify.
Speaker 1 (18:36):
I think we're at the like platform stage.
So, like, now that we're here,I understand why this is an
attractive stage for like for PE.
For because it's okay.
We have a.
We have a leadership teamthat's capable of MNA and
organic growth.
We have a robust team.
We like this is now a machine.
This is not one person drivingthis Like.
(18:57):
This is a machine.
The stage that we're in thisyear, like the year that we're
having, is are we prepared forwhat comes next?
Are our standard operatingprocesses dialed?
Is our accounting team likehigh performing?
Is our recruitment teamfunctioning and driving the type
of recruits at the pace that weneed?
Are we capable of getting allthe leads we can?
(19:18):
Can we sell at a high levelacross a hundred people?
So we're in this like.
Are all of our processesdesigned to work at three times
our size?
That's the stage we're at thisyear.
Speaker 3 (19:32):
Okay, it's time for Service Scalers Marketing Tip.
Your biggest growth killermight be invisible to your
customers, but obvious in yourmarketing metrics.
John Wilson shared how hetripled his average ticket by
building a repeatable salesprocess.
But here's the part manybusinesses miss your marketing
(19:57):
has to feed that process withthe right leads, that process
with the right leads.
If your ads website or callcenter bring in low-quality,
low-margin jobs, your team willwaste time closing work that
barely covers costs and, worse,it can drag down your average
(20:17):
ticket and hide the fact thatyour margins are slipping the
fact that your margins areslipping.
So here's an action step Trackthe lead source for every job
and compare it to the ticketsize and gross margin.
Cut ad spend that produces lowvalue work and double down on
channels that bring inprofitable customers.
(20:38):
This tip is brought to you byService Scalers, helping home
service businesses attracthigh-level leads that turn into
real profit.
The link to Service Scalers isin the show notes and do me a
favor, tell them.
Tyler from Profit Grit sent you.
Thanks a lot.
Speaker 1 (20:58):
All of our process is designed to work at three times
our size.
That's the stage we're at thisyear.
Speaker 3 (21:05):
Got it.
One question I have for youthat would be applicable to a
lot of the people out in theaudience.
They probably have businessessomewhere between one to 10
million.
Is M&A like?
Is that for everybody?
Like, if someone wants to grow,is that what you would say, hey
, be looking at M&A.
Or what would you recommend ifsomeone's like kind of stuck in
that three to five million range?
Speaker 1 (21:26):
Yeah, I think M&A is a tool.
So like when you're this is ananswer that I don't think will
satisfy a lot of people but likewhen you're between three and
five million, really when you'reunder 10 million but most like
felt most acutely under five.
In order to grow the business,you have to reinvest Right and
(21:49):
like what reinvestment lookslike for me today?
Like we have five some milliondollars of EBITDA, like yeah, we
can reinvest, like we're goodto go, like let's go buy 20
trucks.
Let's like let's go, we do whatwe need to do.
That is obviously totallydifferent when we're not dealing
with millions of dollars andwe're dealing with $50,000 of
like reinvestable free cash.
(22:10):
So if I'm a $3 million businessand like I had a 10% year and I
pay myself a hundred grand,like I have 200 grand and
there's probably some vehicledebt, I probably bought a van.
So really I probably probablyhave $100,000 to $50,000.
And the benefit of M&A is itexpands your pool of resources
very quickly and you can do iton someone else's balance sheet.
(22:31):
You can go get a SBA loan forlittle to no money.
It increases your riskexponentially, but you quickly
gain access to more resources ata time when resources are slim.
So I think it does make a lotof sense.
I think you just have to becautious.
(22:52):
Like M&A is really messy andthis is like survivor bias,
right, like hey, we did it.
So like I guess I can.
You know how I would thinkabout it now is different.
But we're about to turn on ourM&A engine again and we haven't
bought in years now and I ammuch more cautious about who and
(23:15):
what I buy than I was when Iwas smaller.
But I also needed to grow whenI was smaller, so I was more
willing to like take on anythingyou know, more willing to put
in elbow grease, but now, like,if we bring on the wrong deal,
it's just like distracting.
So like that's a super longanswer.
But basically, yes, because youdon't have a ton of resources
(23:37):
and you the only way to grow isyou need more resources.
So are you going to sell equityin the business?
Are you going to go take outdebt?
Like, how are you going toexpand your balance sheet so
that you can keep growing?
Speaker 3 (23:48):
So a lot of times you'll hear people will say hey,
if you're going to go acquire abusiness, you're better off
acquiring a really good businessat a good price than an okay
business at a lower price.
What do you think of thatphilosophy?
Is that born true for you?
Speaker 1 (24:05):
No, I think, like margin is inside the dog shit.
So if you who's on the captable, right?
Like if I was a plumber and Iwas 25, so there was some
resources but like not a lot, soI couldn't afford the beautiful
business.
What I could do is like figureit out.
(24:28):
So that's what we did.
Like I don't know that webought.
We've done nine deals and Idon't think a single one has
been good, like a good, a goodbusiness.
And I guess like if it was agood business, they would have
been bigger, right.
Like I think we're goodbusiness.
Like I think we're a greatbusiness, we run a great gross
margin, we have high, like we'regood.
(24:49):
But I think a better way to putthis is all of our deals were
turnarounds.
So we have become turnaroundexperts.
So, yeah, that's that's theonly deal we know how to do.
At this point I don't actuallyknow how to do a well put
together business.
Speaker 3 (25:07):
One thing I see a fair amount of time is I'll have
prospects come to me for myservices and they'll have
acquired a business and one evenjust a couple of weeks ago had
I think it was about $800,000 ofEBITDA when he purchased it and
now, two years later, he'srunning at about 200, I think it
was 250 to 300K of EBITDA.
(25:27):
So he's running at about Ithink it was $250,000 to
$300,000 of EBITDA.
So he's using almost all of theEBITDA to service the SBA loan
and he literally is barelystaying afloat.
What do you see, because youhave so much experience in these
turnarounds and justacquisitions, where do you think
things are going wrong?
When people do acquire a companyand, assuming the numbers are
(25:47):
real, what I see is they try todo too much too soon.
So I'll kind of feed.
What I often see is they'll tryto hire people that are new
positions or whatever andthey'll start to eat up a lot of
that profit when they're alsotrying to service debt and
they're also trying to make aliving.
Is there any common themes thatyou see where those
acquisitions go wrong?
Speaker 1 (26:09):
where those acquisitions go wrong.
Yeah, I mean what I tend to seeand this is from like a very
small sphere of like SMBX, smb,twitter but the people that have
tended to struggle like don'tput the first things first.
So it's really, you know, it'sit's different operating a
business than theorizing aboutoperating a business, and you'll
see a lot of people come in andjust not pick on the main
(26:30):
levers because they came from acorporate background that, like
they were an analyst or theywere a consultant.
I had actually I did a.
I did an interview yesterdaywith a guy named Ethan and he's
running a power washing companyand they just launched it like
four months ago and uh, he X, x,not consulting, he was like
(26:52):
doing, uh, he was in PE, kind ofP adjacent, and he is like
personally cold calling andknocking doors and he's
personally doing the sales.
And that is first things first.
Like that guy's going to kill,like he's going to win, like he
understands, like what actuallymatters in these things is first
things first.
We have to get the lead andsomebody has to sell something.
(27:14):
And before we recorded, yourquestion ended up being about M
and a, but you you said like hey, I want to talk a little bit
about like what's your bestadvice for like three to 5
million?
Like the best advice fromliterally any size to any size
is like you need to sell.
Like sales is almost the onlything that matters is like what
(27:34):
is your sales process?
How good are you at sales?
And every time I see someonefailing in this process it's
almost always tied to like wedon't have a dialed in sales
process and I was focusing onsomething else.
So I'm not a sales person thatwasn't my background but like I
understand its value and push ithard and prioritize it because
(27:57):
that's what it is.
That's the important thing.
Speaker 3 (28:00):
I was watching a clip recently from you I think it
was even this week and youtalked about having technicians
on your own staff that are doingseven figures in terms of yeah
we have a lot of yeah, we have alot of field professionals that
are doing over a milliondollars.
How do you do that, like I mean, because that that's pretty
darn good production, like whatdo you have an?
Speaker 1 (28:19):
internal training.
Well, you know, you know it'seven crazier is I have people
crossing a million year to datethis month?
Speaker 3 (28:26):
Wow, we're only barely at the halfway point.
Speaker 1 (28:29):
Yeah, yeah, we're just into July.
No, it's great, someone, uh, wehave, we have a.
We already have one or twoacross a million, and then we
have a few that are going tocross a million, I think, next
week.
So I mean, that's sales.
Like that's exact, that'sexactly it.
Like I designed a sales andfulfillment process six years
ago that worked, and now it's aproduction machine.
(28:53):
It's new for the industry.
It was new for the industry.
A lot of people have copycattedit, which is great.
I think if more people do it,the industry will be better, and
so people have taken a lot fromour show, which is awesome.
So, yeah, we started this, webuilt this process in order to
sell more and we have an aboveaverage ticket.
It's shocking for most peoplein the industry when they hear
(29:16):
it, and our production peremployee is very high because of
it.
In the two trades that we dothis sales process in but yeah,
that was it Three years agowe're like how do we sell more?
Okay, well, let's do this,let's experiment, let's try this
, and then we just built on theback of that.
But that was putting salesfirst.
Speaker 3 (29:34):
John, do you, do you mind sharing that average ticket
?
It's kind of a teaser there.
Yeah, yeah, not know it.
Speaker 1 (29:39):
Yeah Well, yeah, so for plumbing and electric
plumbing tends to be more likewhat the hell electric's crazy.
Like electric we have over a$3,000 average ticket.
Industry average is like athousand, maybe 900 bucks.
So we're about three times theindustry average.
Uh, plumbing it fluctuatesobviously, but mid to high to
two thousands.
So an industry average there islike 800.
(30:02):
So three times the average, theindustry average ticket there.
So really high average ticketin both.
And it was designed from puttingfirst things first and you know
this is a bit of a like I won'tgo deep into this, but we take
putting leads and we take thislike putting first things first
so seriously that we've reorgedthe whole company around this
(30:25):
concept because we kept trippingover ourselves to like create
these administrative processesthat like none of it fucking
mattered.
If you're not selling something,like you, somebody has to sell
something and you have to do ita lot and you have to make that
a machine.
So we ended up breaking thecompany out into these three
quadrants of a lead, which ismarketing, call center, like how
(30:47):
do we get the lead, how do wehandle the lead, how do we book
it, how do we dispatch it?
Sale, which is going to be ourfield pros on the sales side.
Our sales training, ouronboarding, our packaging what
does that look like?
And then fulfillment how do weactually complete the thing that
we sold?
So the whole company.
We did that about a year ago.
We reorg the whole company.
We had to let some leaders goand we got ourselves fully
(31:07):
aligned on like first thingsfirst.
Speaker 3 (31:10):
Very cool.
Hey, going back to thistechnician thing, is there
anything you could give theaudience just in terms of like
one or two things?
This is what your technicianshould be doing as it relates to
sales, or some little words ofwisdom there?
Speaker 1 (31:22):
I mean, the biggest mistake I usually see is
incentive comp is not aligned.
Like if you, this is not acomplicated thing, like I don't
think I'm a very smart person.
I actually think because I'mnot hyper-intelligent we've been
able to like move faster CauseI don't overthink stuff.
So, like early on, like the oneof the first decisions that I
(31:45):
made nine years ago was aligningperformance with compensation.
Like that was a first two orthree decision.
The other ones were like flatrate pricing and I was going to
move to QuickBooks online.
Like and I don't remember whichorder they came in, but like
first few decisions in Octoberof 2016.
And that was what grew thebusiness.
(32:06):
The idea wasn't complicated howdo I get people to grow this
business for me?
Well, I bet if they make a tonof money, then they will.
They will be more inclined todo that.
So let's just create a programwhere this person can make as
much money as they want and Iwill be super excited to cut
those checks.
And that was not a challengingconcept.
(32:29):
And people really don't getthis right.
I'll talk to people that havesalespeople with no commission.
It's full salary.
It's like why would that guyever sell more?
Why would he move to the nextpackage?
What incentive is there for himto do an excellent job?
And the answer is there isn'tone other than like, maybe a
(32:49):
high five.
So yeah, I think that's likethe easiest win.
That's what I see most peopledo.
Wrong is they just haven'taligned incentives.
Speaker 3 (32:57):
Yeah, that's good stuff.
Okay, I got one one last littletopic here I want to get into.
I want to talk about, like,what's next.
I've heard you say, hey, youwant to be a hundred100 million
company someday.
Talk to me a little bit aboutthat.
And I also just wanted todangle one other part two of
this.
You know you mentioned aboutgetting geared up for M&A again.
Is there any part of you thatyou're thinking about maybe
(33:19):
being your own private equitycompany where, like because you
know I think of like KelsoIndustries I'm having them on my
show in a couple of weeks theybasically created where they
went out and acquired I think itwas, 27 companies in a couple
of years, and they looked for acertain profile of an owner,
probably a guy or girl that'sabout 40 years old, very
(33:40):
ambitious, but wants to be partof something bigger and make
more money.
Is that potentially part ofyour evolution?
Or how do you get to thathundred million, I guess, is my
question.
Speaker 1 (33:45):
Yeah, a 100 million.
It's a big, hairy, audaciousgoal.
It's easy to put on a wall andtalk about frequently.
Our reality is that I see thatas not the end.
I see it as sort of like a nextstep, like 100 million is going
to be super fun when we hit itand I'm really looking forward
to that.
We're a couple of years away,like looking forward to it.
I think 250 would be a lot morefun, I think 500 would be even
(34:08):
more fun than that, and abillion sure would be sweet.
So I think a hundred million isan easy number for people to get
buy-in about, and I've alwaysbeen cautious on when I share,
like and this is just like mywhole adult life, what I think I
can do and what I think I canhelp other people do is is
(34:28):
almost limitless and I don't seea reason that we can't build a
business with a billion dollarsof enterprise value Like.
I don't actually see a reasonLike.
I know people that have done it, I see what they've done to do
it and I understand how we canget there.
So when I?
But the problem is that's liketoo big for most people to get a
(34:50):
hold of.
But a hundred millions, notwhen you're growing at 30% year
over year and you're in thethirties.
So a hundred is a digestiblegoal to get the team bought into
so that we can progress furthertowards the real goal, which is
a lot better than a hundred.
So that was the answer to thefirst one.
The second one is like how wouldwe think about getting there?
(35:11):
Probably a lot of organic,probably some M&A.
We have a backbone for this,we're capable of it.
We do hope to raise at somepoint in the next few years.
It's something we're supertransparent about with our
leadership team.
I think it'd be fun.
Right now we're bootstrappingand like it's still fully
internally owned, we run a goodbusiness and we're going to
(35:33):
continue to do that.
I think somewhere between the15 and 20 million EBITDA mark,
which is hopefully less thanthree years away, we'll be
thinking about raising and thenwe would be the platform and we
would go acquire a bunch ofother businesses.
But yeah, that's that's sort ofthe current plan is.
It'd be fun to bootstrap to 15million of you, but I I think
the first 5 million is like thefirst million is crazy hard
(35:54):
Right, but we went from like thefirst million to the first 5
million in a year.
And I have friends that havegone on the same journey and
they're like a few years aheadof me and and they had the same
thing.
It was like a million and ahalf to four and a half million
to 7 million, to 12 to 17,.
Because you know, once thecompany gets big enough and
you're just like you're, you'renot pulling levers anymore,
(36:15):
you're turning dials, and ifyour company's aligned around
EBITDA, like we get better everyday at this, like we get better
at driving more EBITDA, we getbetter and enhancing margins
every single day.
So I think the first 5 millionwas like hard and brutal.
And I think the first 5 millionwas like hard and brutal.
And I think the next 5 millionis not going to be hard and
brutal.
I think it'll be like we'll bechallenged.
But, yeah, if you can hit 5million of you, but I think you
(36:37):
can hit 15 or 20 bootstrapped, Ithink you can go beyond that
too.
I just think, uh, I want toreward the team and I want to be
like well-armed going into thenext stage.
Speaker 3 (36:46):
Yeah, I mean, especially at 5 million plus.
I mean you've got some seriousfree cashflow floating around
that gives you options in termsof growing and investing and
things.
So that's pretty cool.
That's a pretty good spotyou're in.
I love your transparency andyour candor just in sharing your
journey.
So your websites you've got,obviously, your podcast owned
and operated Amazing.
(37:07):
You also have workshops.
There's a link it's owned andoperated slash workshops If
people want to check it out.
Is there anything you want toplug or mention that people
might be interested in inhearing more about you?
Speaker 1 (37:18):
No, I think owned and operated has been a fun project
.
You know, the past five yearsof my life we've been sharing
the journey.
So we started creating contentwhen I was a $3 million business
and we're still creatingcontent at 10 times that size.
So if you want to watch whatthat looks like, it is all on
(37:41):
the internet and kind of easy tofind.
And all we did was one sharedthe journey, but two we wanted
to create a resource that I wishthat I had 10 years ago when I
first bought the business.
Like it's a totally differentindustry.
There's more information,there's more people, there's
more money.
Like it is a different industrythan when I started.
And I just want to make acontribution back, cause I feel
like I've I've gotten a lot outof all the other people in the
(38:04):
industry that have shared withme.
So owned and operated is my nowvery large contribution back to
the industry.
Speaker 3 (38:09):
Yeah, very cool.
And then you just spun off it'sJackquisitions, is that correct
?
Speaker 1 (38:13):
Yep Jackquisitions.
Yeah, my cohost Jack.
Yeah, he runs a show on M&A inthe trades.
Speaker 3 (38:20):
Yeah, very cool.
I've listened to him a fewtimes.
In fact, I think I have himcoming on in the near future.
I'm excited to talk with him.
It's a great show.
Speaker 1 (38:26):
Yeah, no, he does a good job.
Yeah, people love it.
Speaker 3 (38:29):
Awesome job.
Okay, well, I really appreciateyou sharing your journey,
sharing your story, and keep upthe great work.
I love your show.
Great Thanks, take care.
So if you took one thing fromthis conversation, it's that
growth is never just aboutadding revenue.
It's about building the systems, the people and the processes
(38:58):
that can handle what's comingnext.
John's been through the messyparts of M&A, the challenges of
rapid scaling and the wins thatcome from putting sales first.
If you want to follow hisjourney, check out his podcast
Owned and Operated, and hisworkshops.
They're excellent, which we'lllink in the show notes.
John thanks for being so openabout the wins and the struggles
(39:20):
and for showing that even at$30 million, you can still be
building for the next big leap.
Now, in this episode, johnmentioned at one point
accounting and finance issuescost him dearly.
That's exactly what I helpbusinesses avoid.
If you need help in this area,go to cfomadeeasycom.
(39:41):
That's cfomadeeasycom and booka no pressure intro meeting and
let's chat, as always.
Thanks so much for listening.
The next three or four months I was sued four or
five times in like just onrepeat this lawsuits kept
showing up, kept showing up,kept showing up and we're just
like what is going on and wefind out our accounting team
misplaced around $800,000.
So that was probably the worst.
I was sued eight times beforemy birthday of 2024.
Speaker 2 (00:23):
Welcome to Profit and Grit with Tyler, where
blue-collar owners and insidersspill the real story behind
their hustle, buildingbusinesses that thrive through
sweat and smarts.
We'll dig into their journeys,from scaling chaos to growing
the bottom line, with lessonsand grit that pay off big.
Here's your host, the bluecollar CFO, tyler Martin.
Speaker 3 (00:46):
Today's guest, john Wilson, has one of the most
remarkable growth stories in thetrades.
In less than a decade he'staken his third generation
plumbing business from $1million to over $30 million in
annual revenue.
He's done it through a mix ofgritty turnarounds, strategic
(01:06):
acquisitions and relentlessfocus on sales.
We get into his lowest moment,including the time an $800,000
accounting mess nearly broughtthe business to its knees, and
how he fought through it.
We talk about hitting those.
We've made it milestones,building a leadership team that
(01:28):
runs without you, and why $100million is just the next step,
not the finish line.
Hey, john, welcome to the Profitand Grit Show.
How are you doing today?
I'm doing great.
Thanks for having me on.
Yeah, great to have you.
I hate to sound like a fan boyout the gate, but I guess I will
.
I listen to your show all thetime A lot of really great
(01:49):
wisdom that you always shareyour stories, your guests.
So I just want to start outthere with owned and operated is
how I know of you and I justhave the utmost respect for you.
Speaker 1 (01:59):
Awesome.
I'm glad you're getting somevalue out of it.
It's a fun hobby that seems tohelp a lot of people yeah.
Speaker 3 (02:04):
I think you passed up with the, with the in-person
studio.
You may have passed up the, thehobby part of it.
Speaker 1 (02:09):
I passed hobby.
Yeah, I might've, I might've.
Speaker 3 (02:13):
It sounds like those wheels are spinning man.
In terms of the opportunity,here is what I'm seeing, but
good for you.
So, hey, what I'd love to startout for.
The audience that doesn't knowabout you, which I'm sure very
few, Tell me a little bit aboutwhat you do and your story.
Speaker 1 (02:27):
Yeah, so I'm John Wilson and I'm a plumber from
Akron, so I have a plumbingcompany.
It's a third generation familybusiness called Wilson Plumbing
and Heating and we'll do around$31 million this year.
We bought it eight, nine yearsago and we were doing a million
dollars at the time, so we'vehad a tremendous growth story so
(02:50):
far.
We've used a lot of M&A inorder to get there.
We're all self-funded, so, youknow, internally owned, and
we've also, you know, justlearned how to run a great
business.
So over the past I used M&Abasically to cross into eight
figures, into the $10, $11million mark, and then from then
(03:10):
on so really the past two,three years we've been purely
organic growth Cool.
Speaker 3 (03:16):
So let's start there.
Frame this for me I'm sure youhad a really down moment as
you're going through all thisgrowth, and probably maybe even
your worst moment.
Can you share that Like did youever hit a wall?
I'm sure it wasn't all rosesand sunshine.
Speaker 1 (03:31):
Yeah, I think I mean there's a few that come to mind.
I mean, you know, there's anearlier one there's probably
like three big moments in mycareer where it's like, is this
going to work?
And one of them was actuallylike not even that long ago, it
was probably just about twoyears ago and we had an
accounting department and whenwe we bought all these
businesses uh, we bought ninebusinesses over the years and we
(03:55):
bought three of them in 2021.
And when we bought those, wegrew from 29 employees, I think,
or 30 employees, to 105 in like130 days.
So it was obviously a lot.
And during that time, we onlyhad 30 employees when we started
.
So, like, aggressively growingvery fast.
(04:18):
So what that meant was we didn'thave a good accounting team.
We didn't have a good HR team.
We didn't have a good HR team.
We didn't have a good a lot ofteams because, like, how could
we?
We had 30 people.
You know contrast that today wehave 152 people on that team.
So all of those teams are good,but but at the time, even just
(04:39):
two years ago, you know, we were, we were running a gun and
trying to figure out how to growan accounting team, and I'm not
even picking this as the worstmoment because you have CFO made
easy on your shirt.
It literally just was the worst.
So at the end of 2023, mybrother died, and so I wasn't in
a great frame of mind.
(04:59):
In the middle of while I wasworking through that, my
accounting team basically lost$800,000 worth of bills.
Wow, so I'm not in a greatframe of mind.
We had actively merged fourbusinesses together, which means
we merged four QuickBooks filestogether.
It was a very complicatedtransaction and in the process,
(05:21):
I had not upgraded my accountingstaff to be able to support
that type of transaction, and inthe process, I had not upgraded
my accounting staff to be ableto support that type of
transaction.
I did bring in external expertsto help us, but they did a very
bad job and we've had to paymultiple six figures now to fix
it.
But in that process, wedisconnected a few things and
they basically misplaced roughlyaround $800,000.
(05:44):
So, uh, it's on on one hand,it's a lot of money and on the
other hand, it's like not thatmuch money but it's a lot of
money when you're growing at thepace you are in.
The balance sheet was stilllike getting stabilized from
acquisitions.
So so my, my brother passesaway, uh surprise, uh, you know
he was a young guy, had a heartattack.
And then the next three or fourmonths I was sued four or five
(06:08):
times in like just on repeatthis lawsuits kept showing up,
kept showing up, kept showing upand we're just like what is
going on and we find out ouraccounting team misplaced around
$800,000.
So that was probably the worst.
I was sued eight times beforemy birthday of 2024.
Speaker 3 (06:26):
Wow, so you know, just to dig a little deeper, I
mean, were you really like at apoint, like man, because you
kind of seem like a fighter tome Were you really serious, like
hey, I'm not sure if I want todo this Like, is this all worth
it?
Were you, was that really astrong emotion, or was it more
like just one or two days?
Speaker 1 (06:50):
You were kind of like this sucks, and I'll wipe off
my knees and figure it out.
Well, I mean, it was a lot therewas a few moments where we
thought we thought we were goingto go bankrupt, Like for sure.
We went from a positiveearnings to a negative, a
negative, like basicallyovernight it was a total shock.
We had vendors banging down thedoor and we didn't really know
what we were supposed to do inthat moment.
Like we had vendors bangingdown the door and we didn't
really know what we weresupposed to do in that moment,
Like we had no idea.
You know, we had low moments,but that was a pretty tough one.
(07:11):
So we ended up.
I mean, obviously we ended upgetting through it, but in a
fight or flight I tend to fight,yeah, so we did do it, but I
mean it was dirty.
Speaker 3 (07:22):
Yeah.
What was your takeaway fromthat?
Did you just try to bite toomuch at once?
Is that the takeaway?
Speaker 1 (07:27):
No, it was clean accounting, like that was the
takeaway I had.
It was really just like, pureand simple, there should have
been more eyeballs on this.
So, like the way that we thinkabout this now because, like the
downside, it ended up being atwofold problem.
So, on the one hand, like hey,we have a, this is a balance
sheet issue, right, like we havean undisclosed liability of
(07:51):
nearly seven figures that we nowhave to handle and it's a
surprise.
So that's the balance sheetproblem, and that is a big
enough problem in and of itself.
The more complicated problem isit was also a P&L problem
because suddenly we had $800,000of expenses that we didn't know
(08:12):
existed.
So we thought we were runningat X gross margin and we weren't
.
We thought we were running atthis material and we weren't.
So all of this expense came outof nowhere.
So we had to reformat thebusiness to run it basically 20
points higher, because we didn'tknow that was happening.
So it was a P&L and a balancesheet turnaround, which is hard.
Speaker 3 (08:34):
John, were you all like did this event of you know,
having this unrecordedliability and dealing with the
financial changes did?
Were you always comfortablewith the balance sheet and
financial and the incomestatement at that point?
Or was it like, oh man, I'vegot to immerse myself in this
now and become a higher level Idon't know about an expert, but
a higher level where you reallyunderstood it?
(08:55):
Because what I see a lot oftimes business owners.
As we're growing and building abusiness, financials are an
afterthought.
We're looking at cash, cash andbank and you mentioned balance
sheet and probably 50% ofbusiness owners don't even
really know what that is, maybeeven higher than that.
Speaker 1 (09:09):
Yeah, I would maybe call myself an expert now, but
before then I was strong Likethat was.
I didn't finish college, butthe college that I did attend
was for accounting, so I wasvery comfortable around all that
.
What made it complicated wasthe merging the four different
QuickBooks files into onesingular file and things getting
(09:32):
basically disconnected in theprocess and us just not catching
that disconnect.
Speaker 3 (09:37):
Plus, I would assume now you go from 30 to 100 people
.
That's a lot of moving parts,like that's a lot of culture
change.
Speaker 1 (09:44):
Yeah, when there's always a bigger fire like that,
that ended up being what it was.
You know, like HR is a fire,accountings, you know, and you
sort of just like band-aid thosetogether because, much more
importantly, like hey, sales isa fire, this trade's a fire.
Like I got to recruit over here, I got to fill this team, so
there was always just a biggerfire.
So the way that we think aboutlike our support teams now to
(10:06):
sort of like what the lessonlearned was a lot of eyeballs, a
lot of redundancy, includingexternal.
So I'm not intentionallyplugging again the shirt you've
got on, but like we are a bigfan of, like who's watching the
watchers?
I've most friends, that of minethat run a big business have
been taken for a million dollarsor more.
Wow, so what's your auditprocess?
(10:28):
Like what's your close process?
Like how tight is it?
And that's for accounting.
But also like HR, like who'swho's confirming that you're
compliant, because HR is becomesa whole situation after a
hundred and I think we had noidea what we had built.
Like we didn't know if we wereand nobody does, and everyone
thinks they're compliant, andthen you find out you are not in
(10:51):
the ballpark.
Speaker 3 (10:52):
Wow, Wow, hey, one, one question I've always been
curious about since you acquiredthis business through I believe
it was your grandparents haveyou always had the support,
Because I'm sure that yourfamily was kind of maybe set in
a certain way in terms of seeingthe business for a long time
and being at a certain size havethey always been very
supportive of all this growthand ambition and changes?
(11:15):
I mean, I'm sure it's easiernow than it was maybe when you
were going through the mergersand things weren't going your
way have they always been reallysupportive or they've been like
man?
Why are you taking all thisrisk?
Speaker 1 (11:25):
Yeah, the latter.
My family preferred thebusiness small, so it ended up
my dad.
We did the transaction in twodifferent steps.
So the first one, I bought 49%in 2016 and in 2019 I bought
another 49%, and it was becauseof that exact issue.
I was ready to take on morerisk, I was ready to scale the
business a little bit moreaggressively and he was not, so
(11:46):
I bought out sort of the rest.
Speaker 3 (11:52):
Got it Cause you see that so many times, even in my
own life.
When I went out to business formyself, you know my dad, long
time blue collar worker, waslike dude, you're crazy, you're
making X, y, z at this company.
You're going to leave it and gomake nothing.
You're insane.
And so it wasn't.
It's interesting how, you know,different generations have
different perspectives and it'ssometimes hard to get those to
connect.
Speaker 1 (12:10):
Yeah, I think, uh, you know it's easy now, yeah,
it's easy now to look at it andpeople be like, oh yeah, like
you did it, you're successful,you're uh, whatever.
But like sure, yeah, there's150 people, it's a big freaking
business.
Like, yeah, totally makes sense.
But on the way up, I saw it, mywife saw it.
Speaker 3 (12:29):
Yeah, yeah, that's cool.
Okay, I want to flip the scriptnow.
So we talked about kind of thebad.
Let's talk about where did youhit that point where you go oh
my gosh, I'm not a plumbingcompany anymore, I am like a
real operation that's got realscalability.
When did that?
When did that hit?
Speaker 1 (12:44):
you.
I think that hits me often.
I think, an important thing tonote.
So I bought the business.
I was very young and I was 25.
And my original goal for thebusiness was, by the I want I
had five years.
I said, hey, I want to have theoption to sell this business
when I'm 30.
At the time, like the fat thiswas nine, 10 years ago the fat
(13:08):
fire movement was like a thingand like everyone was like
what's the least amount you canretire with?
And I was like, well, if I sellthis business in five years, I
think that I can be amillionaire by the time that I'm
30.
So it was really likeeverything was designed to
personally make me a millionaireby the time I was 30.
So I started, which I think is areally important distinction,
(13:30):
because a big part of the reasonthat we grew and the reason
that all this happened is I madesure to never make myself that
important of a piece, because asaleable business can't have an
integrally tied owner.
That's just like one-on-one.
So from the beginning I alwaysthought it was a scalable thing
and that was always the plan.
(13:51):
So we did it and it's easy nowto look back and be like nice
job.
And I was like, yeah, that wasyou know, that was we.
I did what we said we weregoing to do.
So I always thought that Ithink, as the business grew
bigger and bigger, like there'sbeen different moments of that.
So sometimes it's a revenuegoal like oh man, we did a
million dollars in a month.
That's crazy, that's cool.
(14:11):
We've started doing like morerevenue in a month than I used
to do in a year and like that'scool.
Like last month we did more inrevenue than I did in 2018,
which like that's like all right, that's pretty sweet.
Uh, I think October I hope wedo more than I did in 2019.
So it you know that those winsstart to stack up and that feels
(14:31):
pretty real.
I'd say the.
The biggest like we made itagain has been watching our
senior leadership team likereally, uh, take on like real
responsibility anddecision-making power, and
that's been something At everystage of your business.
You have to be this differentversion of you and hopefully a
(14:54):
better version of you that theteam needs in that moment and in
that time period for thebusiness, and I've always been
hyper aware of that.
I'm not saying I've done itperfectly or well, most of the
time I probably haven't, but Ido think I've tended to get the
biggest things right and forthis current stage and I've been
in it for like six months nowis, hey, what the team needs.
(15:14):
If the team needs to like thesenior leadership team,
specifically like six, sevenpeople, they need to be able to
fully competently run theirdepartment without me in any way
at all.
Like this needs to be afunctioning senior leadership
team that, like I can coach, Ican mentor, I can give input,
but then I also need to be ableto go on vacation for two weeks
(15:36):
and the business be better thanit was, which is what just
happened.
I just got back, actuallyMonday, so yeah, so I think like
that's been our most recent,like my president Brandon and I,
my partner, he and I have beenworking together, for this is
our sixth year and like we talkabout it a lot, like we just
like we built this business.
You know I've owned it forlonger.
I did have three years withouthim, but he and I built this
(15:59):
business and we like we watchleaders come and go, we watch
people grow and figure stuff out, and like this current stage
for both him and I is just sosurreal because, like two years
ago, like we were functionallyrunning teams and like we were
standing up the accounting teamfrom scratch, we were for the
(16:20):
third time, we were standing upHR for the third time or fourth
time we were building amarketing.
For the third time, we werestanding up HR for the third
time or fourth time we werebuilding a marketing team.
We like we were like reallylike ingrained and now we're
just not, which is good, like itmeans that we're doing our jobs
and we're doing the things thatI should be doing.
I, you know how are we drivingorganic or inorganic expansion?
What's next for the wholeorganization?
(16:42):
So that's been our most recentlike holy shit, I think.
I think we made like anenterprise here.
There's 150 people here andthey're driving, which is
awesome.
Speaker 3 (16:52):
Wow, do you guys follow any type of methodology,
like an EOS methodology oranything that allows you to
bring your teams together, yourleadership team in particular?
Speaker 1 (17:02):
Yeah, yeah, we've been on eos for probably four
years.
I think it's helpful.
It's a good way to communicate,good way to report.
We like early stages.
We're probably going to move toscaling up here shortly.
Like eos seems to struggle, thebigger you get like, yeah, we
we've tried to roll it more andmore and it's just like it
breaks every time.
So we just we stopped and we'relike all right.
(17:24):
So we only have four teams likefunctionally using EOS, and
every time we've tried fulldeployment it's it's just so
cumbersome to the business, itjust doesn't make a lot of sense
.
Speaker 3 (17:36):
But yeah, eos, to your point, scaling up does have
more bandwidth, I think, for alarger model that it can support
.
I think you know EOS is awesome.
I would say.
In my opinion I'd say $10million and under.
I mean, obviously businessesare different, but generally
when it's kind of like a smallone leadership team, I think,
(17:57):
with a handful of main players,maybe five to ten, I think it
works really good.
Once you get more complex thanthat and it sounds like what
you're experiencing it does geta little bit cumbersome.
Speaker 1 (18:07):
I mean we're a, we're a six layer org chart.
So yeah, it's a bit much Wow.
Speaker 3 (18:19):
So it sounds like, in terms of your maturation, you
guys have gotten to a pointwhere you're hands off, you're
in a visionary role, which isawesome.
Your president it sounds likeprobably his leadership team is
reporting into him.
He's even gotten each littlepod doing its own thing, so it
sounds like you guys are at apretty cool place, what you know
.
One question I want to ask you,I think we're just to clarify.
Speaker 1 (18:36):
I think we're at the like platform stage.
So, like, now that we're here,I understand why this is an
attractive stage for like for PE.
For because it's okay.
We have a.
We have a leadership teamthat's capable of MNA and
organic growth.
We have a robust team.
We like this is now a machine.
This is not one person drivingthis Like.
(18:57):
This is a machine.
The stage that we're in thisyear, like the year that we're
having, is are we prepared forwhat comes next?
Are our standard operatingprocesses dialed?
Is our accounting team likehigh performing?
Is our recruitment teamfunctioning and driving the type
of recruits at the pace that weneed?
Are we capable of getting allthe leads we can?
(19:18):
Can we sell at a high levelacross a hundred people?
So we're in this like.
Are all of our processesdesigned to work at three times
our size?
That's the stage we're at thisyear.
Speaker 3 (19:32):
Okay, it's time for Service Scalers Marketing Tip.
Your biggest growth killermight be invisible to your
customers, but obvious in yourmarketing metrics.
John Wilson shared how hetripled his average ticket by
building a repeatable salesprocess.
But here's the part manybusinesses miss your marketing
(19:57):
has to feed that process withthe right leads, that process
with the right leads.
If your ads website or callcenter bring in low-quality,
low-margin jobs, your team willwaste time closing work that
barely covers costs and, worse,it can drag down your average
(20:17):
ticket and hide the fact thatyour margins are slipping the
fact that your margins areslipping.
So here's an action step Trackthe lead source for every job
and compare it to the ticketsize and gross margin.
Cut ad spend that produces lowvalue work and double down on
channels that bring inprofitable customers.
(20:38):
This tip is brought to you byService Scalers, helping home
service businesses attracthigh-level leads that turn into
real profit.
The link to Service Scalers isin the show notes and do me a
favor, tell them.
Tyler from Profit Grit sent you.
Thanks a lot.
Speaker 1 (20:58):
All of our process is designed to work at three times
our size.
That's the stage we're at thisyear.
Speaker 3 (21:05):
Got it.
One question I have for youthat would be applicable to a
lot of the people out in theaudience.
They probably have businessessomewhere between one to 10
million.
Is M&A like?
Is that for everybody?
Like, if someone wants to grow,is that what you would say, hey
, be looking at M&A.
Or what would you recommend ifsomeone's like kind of stuck in
that three to five million range?
Speaker 1 (21:26):
Yeah, I think M&A is a tool.
So like when you're this is ananswer that I don't think will
satisfy a lot of people but likewhen you're between three and
five million, really when you'reunder 10 million but most like
felt most acutely under five.
In order to grow the business,you have to reinvest Right and
(21:49):
like what reinvestment lookslike for me today?
Like we have five some milliondollars of EBITDA, like yeah, we
can reinvest, like we're goodto go, like let's go buy 20
trucks.
Let's like let's go, we do whatwe need to do.
That is obviously totallydifferent when we're not dealing
with millions of dollars andwe're dealing with $50,000 of
like reinvestable free cash.
(22:10):
So if I'm a $3 million businessand like I had a 10% year and I
pay myself a hundred grand,like I have 200 grand and
there's probably some vehicledebt, I probably bought a van.
So really I probably probablyhave $100,000 to $50,000.
And the benefit of M&A is itexpands your pool of resources
very quickly and you can do iton someone else's balance sheet.
(22:31):
You can go get a SBA loan forlittle to no money.
It increases your riskexponentially, but you quickly
gain access to more resources ata time when resources are slim.
So I think it does make a lotof sense.
I think you just have to becautious.
(22:52):
Like M&A is really messy andthis is like survivor bias,
right, like hey, we did it.
So like I guess I can.
You know how I would thinkabout it now is different.
But we're about to turn on ourM&A engine again and we haven't
bought in years now and I ammuch more cautious about who and
(23:15):
what I buy than I was when Iwas smaller.
But I also needed to grow whenI was smaller, so I was more
willing to like take on anythingyou know, more willing to put
in elbow grease, but now, like,if we bring on the wrong deal,
it's just like distracting.
So like that's a super longanswer.
But basically, yes, because youdon't have a ton of resources
(23:37):
and you the only way to grow isyou need more resources.
So are you going to sell equityin the business?
Are you going to go take outdebt?
Like, how are you going toexpand your balance sheet so
that you can keep growing?
Speaker 3 (23:48):
So a lot of times you'll hear people will say hey,
if you're going to go acquire abusiness, you're better off
acquiring a really good businessat a good price than an okay
business at a lower price.
What do you think of thatphilosophy?
Is that born true for you?
Speaker 1 (24:05):
No, I think, like margin is inside the dog shit.
So if you who's on the captable, right?
Like if I was a plumber and Iwas 25, so there was some
resources but like not a lot, soI couldn't afford the beautiful
business.
What I could do is like figureit out.
(24:28):
So that's what we did.
Like I don't know that webought.
We've done nine deals and Idon't think a single one has
been good, like a good, a goodbusiness.
And I guess like if it was agood business, they would have
been bigger, right.
Like I think we're goodbusiness.
Like I think we're a greatbusiness, we run a great gross
margin, we have high, like we'regood.
(24:49):
But I think a better way to putthis is all of our deals were
turnarounds.
So we have become turnaroundexperts.
So, yeah, that's that's theonly deal we know how to do.
At this point I don't actuallyknow how to do a well put
together business.
Speaker 3 (25:07):
One thing I see a fair amount of time is I'll have
prospects come to me for myservices and they'll have
acquired a business and one evenjust a couple of weeks ago had
I think it was about $800,000 ofEBITDA when he purchased it and
now, two years later, he'srunning at about 200, I think it
was 250 to 300K of EBITDA.
(25:27):
So he's running at about Ithink it was $250,000 to
$300,000 of EBITDA.
So he's using almost all of theEBITDA to service the SBA loan
and he literally is barelystaying afloat.
What do you see, because youhave so much experience in these
turnarounds and justacquisitions, where do you think
things are going wrong?
When people do acquire a companyand, assuming the numbers are
(25:47):
real, what I see is they try todo too much too soon.
So I'll kind of feed.
What I often see is they'll tryto hire people that are new
positions or whatever andthey'll start to eat up a lot of
that profit when they're alsotrying to service debt and
they're also trying to make aliving.
Is there any common themes thatyou see where those
acquisitions go wrong?
Speaker 1 (26:09):
where those acquisitions go wrong.
Yeah, I mean what I tend to seeand this is from like a very
small sphere of like SMBX, smb,twitter but the people that have
tended to struggle like don'tput the first things first.
So it's really, you know, it'sit's different operating a
business than theorizing aboutoperating a business, and you'll
see a lot of people come in andjust not pick on the main
(26:30):
levers because they came from acorporate background that, like
they were an analyst or theywere a consultant.
I had actually I did a.
I did an interview yesterdaywith a guy named Ethan and he's
running a power washing companyand they just launched it like
four months ago and uh, he X, x,not consulting, he was like
(26:52):
doing, uh, he was in PE, kind ofP adjacent, and he is like
personally cold calling andknocking doors and he's
personally doing the sales.
And that is first things first.
Like that guy's going to kill,like he's going to win, like he
understands, like what actuallymatters in these things is first
things first.
We have to get the lead andsomebody has to sell something.
(27:14):
And before we recorded, yourquestion ended up being about M
and a, but you you said like hey, I want to talk a little bit
about like what's your bestadvice for like three to 5
million?
Like the best advice fromliterally any size to any size
is like you need to sell.
Like sales is almost the onlything that matters is like what
(27:34):
is your sales process?
How good are you at sales?
And every time I see someonefailing in this process it's
almost always tied to like wedon't have a dialed in sales
process and I was focusing onsomething else.
So I'm not a sales person thatwasn't my background but like I
understand its value and push ithard and prioritize it because
(27:57):
that's what it is.
That's the important thing.
Speaker 3 (28:00):
I was watching a clip recently from you I think it
was even this week and youtalked about having technicians
on your own staff that are doingseven figures in terms of yeah
we have a lot of yeah, we have alot of field professionals that
are doing over a milliondollars.
How do you do that, like I mean, because that that's pretty
darn good production, like whatdo you have an?
Speaker 1 (28:19):
internal training.
Well, you know, you know it'seven crazier is I have people
crossing a million year to datethis month?
Speaker 3 (28:26):
Wow, we're only barely at the halfway point.
Speaker 1 (28:29):
Yeah, yeah, we're just into July.
No, it's great, someone, uh, wehave, we have a.
We already have one or twoacross a million, and then we
have a few that are going tocross a million, I think, next
week.
So I mean, that's sales.
Like that's exact, that'sexactly it.
Like I designed a sales andfulfillment process six years
ago that worked, and now it's aproduction machine.
(28:53):
It's new for the industry.
It was new for the industry.
A lot of people have copycattedit, which is great.
I think if more people do it,the industry will be better, and
so people have taken a lot fromour show, which is awesome.
So, yeah, we started this, webuilt this process in order to
sell more and we have an aboveaverage ticket.
It's shocking for most peoplein the industry when they hear
(29:16):
it, and our production peremployee is very high because of
it.
In the two trades that we dothis sales process in but yeah,
that was it Three years agowe're like how do we sell more?
Okay, well, let's do this,let's experiment, let's try this
, and then we just built on theback of that.
But that was putting salesfirst.
Speaker 3 (29:34):
John, do you, do you mind sharing that average ticket
?
It's kind of a teaser there.
Yeah, yeah, not know it.
Speaker 1 (29:39):
Yeah Well, yeah, so for plumbing and electric
plumbing tends to be more likewhat the hell electric's crazy.
Like electric we have over a$3,000 average ticket.
Industry average is like athousand, maybe 900 bucks.
So we're about three times theindustry average.
Uh, plumbing it fluctuatesobviously, but mid to high to
two thousands.
So an industry average there islike 800.
(30:02):
So three times the average, theindustry average ticket there.
So really high average ticketin both.
And it was designed from puttingfirst things first and you know
this is a bit of a like I won'tgo deep into this, but we take
putting leads and we take thislike putting first things first
so seriously that we've reorgedthe whole company around this
(30:25):
concept because we kept trippingover ourselves to like create
these administrative processesthat like none of it fucking
mattered.
If you're not selling something,like you, somebody has to sell
something and you have to do ita lot and you have to make that
a machine.
So we ended up breaking thecompany out into these three
quadrants of a lead, which ismarketing, call center, like how
(30:47):
do we get the lead, how do wehandle the lead, how do we book
it, how do we dispatch it?
Sale, which is going to be ourfield pros on the sales side.
Our sales training, ouronboarding, our packaging what
does that look like?
And then fulfillment how do weactually complete the thing that
we sold?
So the whole company.
We did that about a year ago.
We reorg the whole company.
We had to let some leaders goand we got ourselves fully
(31:07):
aligned on like first thingsfirst.
Speaker 3 (31:10):
Very cool.
Hey, going back to thistechnician thing, is there
anything you could give theaudience just in terms of like
one or two things?
This is what your technicianshould be doing as it relates to
sales, or some little words ofwisdom there?
Speaker 1 (31:22):
I mean, the biggest mistake I usually see is
incentive comp is not aligned.
Like if you, this is not acomplicated thing, like I don't
think I'm a very smart person.
I actually think because I'mnot hyper-intelligent we've been
able to like move faster CauseI don't overthink stuff.
So, like early on, like the oneof the first decisions that I
(31:45):
made nine years ago was aligningperformance with compensation.
Like that was a first two orthree decision.
The other ones were like flatrate pricing and I was going to
move to QuickBooks online.
Like and I don't remember whichorder they came in, but like
first few decisions in Octoberof 2016.
And that was what grew thebusiness.
(32:06):
The idea wasn't complicated howdo I get people to grow this
business for me?
Well, I bet if they make a tonof money, then they will.
They will be more inclined todo that.
So let's just create a programwhere this person can make as
much money as they want and Iwill be super excited to cut
those checks.
And that was not a challengingconcept.
(32:29):
And people really don't getthis right.
I'll talk to people that havesalespeople with no commission.
It's full salary.
It's like why would that guyever sell more?
Why would he move to the nextpackage?
What incentive is there for himto do an excellent job?
And the answer is there isn'tone other than like, maybe a
(32:49):
high five.
So yeah, I think that's likethe easiest win.
That's what I see most peopledo.
Wrong is they just haven'taligned incentives.
Speaker 3 (32:57):
Yeah, that's good stuff.
Okay, I got one one last littletopic here I want to get into.
I want to talk about, like,what's next.
I've heard you say, hey, youwant to be a hundred100 million
company someday.
Talk to me a little bit aboutthat.
And I also just wanted todangle one other part two of
this.
You know you mentioned aboutgetting geared up for M&A again.
Is there any part of you thatyou're thinking about maybe
(33:19):
being your own private equitycompany where, like because you
know I think of like KelsoIndustries I'm having them on my
show in a couple of weeks theybasically created where they
went out and acquired I think itwas, 27 companies in a couple
of years, and they looked for acertain profile of an owner,
probably a guy or girl that'sabout 40 years old, very
(33:40):
ambitious, but wants to be partof something bigger and make
more money.
Is that potentially part ofyour evolution?
Or how do you get to thathundred million, I guess, is my
question.
Speaker 1 (33:45):
Yeah, a 100 million.
It's a big, hairy, audaciousgoal.
It's easy to put on a wall andtalk about frequently.
Our reality is that I see thatas not the end.
I see it as sort of like a nextstep, like 100 million is going
to be super fun when we hit itand I'm really looking forward
to that.
We're a couple of years away,like looking forward to it.
I think 250 would be a lot morefun, I think 500 would be even
(34:08):
more fun than that, and abillion sure would be sweet.
So I think a hundred million isan easy number for people to get
buy-in about, and I've alwaysbeen cautious on when I share,
like and this is just like mywhole adult life, what I think I
can do and what I think I canhelp other people do is is
(34:28):
almost limitless and I don't seea reason that we can't build a
business with a billion dollarsof enterprise value Like.
I don't actually see a reasonLike.
I know people that have done it, I see what they've done to do
it and I understand how we canget there.
So when I?
But the problem is that's liketoo big for most people to get a
(34:50):
hold of.
But a hundred millions, notwhen you're growing at 30% year
over year and you're in thethirties.
So a hundred is a digestiblegoal to get the team bought into
so that we can progress furthertowards the real goal, which is
a lot better than a hundred.
So that was the answer to thefirst one.
The second one is like how wouldwe think about getting there?
(35:11):
Probably a lot of organic,probably some M&A.
We have a backbone for this,we're capable of it.
We do hope to raise at somepoint in the next few years.
It's something we're supertransparent about with our
leadership team.
I think it'd be fun.
Right now we're bootstrappingand like it's still fully
internally owned, we run a goodbusiness and we're going to
(35:33):
continue to do that.
I think somewhere between the15 and 20 million EBITDA mark,
which is hopefully less thanthree years away, we'll be
thinking about raising and thenwe would be the platform and we
would go acquire a bunch ofother businesses.
But yeah, that's that's sort ofthe current plan is.
It'd be fun to bootstrap to 15million of you, but I I think
the first 5 million is like thefirst million is crazy hard
(35:54):
Right, but we went from like thefirst million to the first 5
million in a year.
And I have friends that havegone on the same journey and
they're like a few years aheadof me and and they had the same
thing.
It was like a million and ahalf to four and a half million
to 7 million, to 12 to 17,.
Because you know, once thecompany gets big enough and
you're just like you're, you'renot pulling levers anymore,
(36:15):
you're turning dials, and ifyour company's aligned around
EBITDA, like we get better everyday at this, like we get better
at driving more EBITDA, we getbetter and enhancing margins
every single day.
So I think the first 5 millionwas like hard and brutal.
And I think the first 5 millionwas like hard and brutal.
And I think the next 5 millionis not going to be hard and
brutal.
I think it'll be like we'll bechallenged.
But, yeah, if you can hit 5million of you, but I think you
(36:37):
can hit 15 or 20 bootstrapped, Ithink you can go beyond that
too.
I just think, uh, I want toreward the team and I want to be
like well-armed going into thenext stage.
Speaker 3 (36:46):
Yeah, I mean, especially at 5 million plus.
I mean you've got some seriousfree cashflow floating around
that gives you options in termsof growing and investing and
things.
So that's pretty cool.
That's a pretty good spotyou're in.
I love your transparency andyour candor just in sharing your
journey.
So your websites you've got,obviously, your podcast owned
and operated Amazing.
(37:07):
You also have workshops.
There's a link it's owned andoperated slash workshops If
people want to check it out.
Is there anything you want toplug or mention that people
might be interested in inhearing more about you?
Speaker 1 (37:18):
No, I think owned and operated has been a fun project
.
You know, the past five yearsof my life we've been sharing
the journey.
So we started creating contentwhen I was a $3 million business
and we're still creatingcontent at 10 times that size.
So if you want to watch whatthat looks like, it is all on
(37:41):
the internet and kind of easy tofind.
And all we did was one sharedthe journey, but two we wanted
to create a resource that I wishthat I had 10 years ago when I
first bought the business.
Like it's a totally differentindustry.
There's more information,there's more people, there's
more money.
Like it is a different industrythan when I started.
And I just want to make acontribution back, cause I feel
like I've I've gotten a lot outof all the other people in the
(38:04):
industry that have shared withme.
So owned and operated is my nowvery large contribution back to
the industry.
Speaker 3 (38:09):
Yeah, very cool.
And then you just spun off it'sJackquisitions, is that correct
?
Speaker 1 (38:13):
Yep Jackquisitions.
Yeah, my cohost Jack.
Yeah, he runs a show on M&A inthe trades.
Speaker 3 (38:20):
Yeah, very cool.
I've listened to him a fewtimes.
In fact, I think I have himcoming on in the near future.
I'm excited to talk with him.
It's a great show.
Speaker 1 (38:26):
Yeah, no, he does a good job.
Yeah, people love it.
Speaker 3 (38:29):
Awesome job.
Okay, well, I really appreciateyou sharing your journey,
sharing your story, and keep upthe great work.
I love your show.
Great Thanks, take care.
So if you took one thing fromthis conversation, it's that
growth is never just aboutadding revenue.
It's about building the systems, the people and the processes
(38:58):
that can handle what's comingnext.
John's been through the messyparts of M&A, the challenges of
rapid scaling and the wins thatcome from putting sales first.
If you want to follow hisjourney, check out his podcast
Owned and Operated, and hisworkshops.
They're excellent, which we'lllink in the show notes.
John thanks for being so openabout the wins and the struggles
(39:20):
and for showing that even at$30 million, you can still be
building for the next big leap.
Now, in this episode, johnmentioned at one point
accounting and finance issuescost him dearly.
That's exactly what I helpbusinesses avoid.
If you need help in this area,go to cfomadeeasycom.
(39:41):
That's cfomadeeasycom and booka no pressure intro meeting and
let's chat, as always.
Thanks so much for listening.
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