September 2, 2025 • 45 mins
Most trades business buyers expect a rough start. Jack Carr got a full-on fire drill.
He bought an HVAC company across the country, packed up his life, and drove 32 hours, only to find out his entire team had quit. No techs, no support, no HVAC experience. Just a dispatcher, a wrench, and the middle of summer in Tennessee.
In this episode of Profit & Grit, Jack shares how he went from scrambling to keep the phones answered and units running, to building a $5M business with a clear plan to hit $20M by 2030. He breaks down the real math behind paying techs more, how offshoring back-office work helps him fund better talent, and why most first-time buyers badly underestimate the businesses they acquire.
You’ll hear how Jack taught himself HVAC at 4 AM with YouTube videos, why he fired the seller after two weeks, and the pillars that let him compete with $100M giants in his market.
What You Will Learn in This Episode:
• What really happened when Jack’s whole HVAC team quit before day one
• Why most home service acquisitions go wrong in the first 12 months
• How Jack uses overseas labor to pay field techs $5–$15/hour more
• The one hire that helped him double revenue and gain breathing room
• Why offshoring admin roles isn’t about cutting cost—it’s about upgrading talent
• How Jack models growth down to call volume, conversion rates, and fleet size
• What first-time buyers get wrong about “opportunity” and “low-hanging fruit”
• Why “just add marketing” is one of the most dangerous growth plans out there
More From Profit & Grit
Book your complimentary Financial Insight Session with Tyler Martin, fractional CFO for home services and the trades, here:
http://cfointrocall.com
Learn more at http://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 and Blue Collar Success Group
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Day one, every single technician quit.
I left with a dispatcher, awrench and zero HVAC experience.
Speaker 2 (00:10):
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.
Speaker 3 (00:31):
Martin, hey, hey, welcome back to Profit and Grit.
This is Tyler Martin, your host.
Today I got a great guest.
His name is Jack Carr.
He bought an HVAC companythinking he'd ease in, learn the
ropes and grow from there.
Instead, his whole team quit,and this is before day one Now.
(00:52):
He had no experience, no techs.
Middle of summer, he rolled uphis sleeves, learned HVAC from
scratch and went all in Fastforward.
He's now running a $5 millionshop, scaling through smart
acquisitions and on track to hit$20 million by 2030.
(01:13):
We get into what that firstyear really looked like, how he
uses offshore talent to pay histechs more and why so many
trades buyers get burned, andthe exact moves he's making to
keep growing without killingmargin.
If you're thinking about buyinga trades business or you're
(01:35):
trying to scale one withoutlosing your mind or your money,
this episode is a must listen.
Let's get into it with Jack.
Hey, jack, welcome to theProfiting Grit Podcast Show.
How are you doing Good?
And yourself, tyler?
I'm doing great man, thanks forbeing on the show.
I always love to start learninga little bit about you.
Can you tell us a little bitabout yourself and then maybe,
(01:57):
if you would, even a littlepersonal note about yourself.
Speaker 1 (02:00):
Yeah, I mean me.
I'm a ex winery operationsmanager.
That was where I got cut myteeth as I started off in
facilities maintenance andoperations, ended up moving my
way up the ladder runningmultiple wineries.
Always had a bug though forentrepreneurship and so started
a few businesses.
I won't kill the dead horsehere, beat the dead horse, but
(02:23):
essentially essentially a mobilemaintenance business, and then
a Bitcoin mining server farm,which I exited late 2010s at a
really good times and then tooka few years off to raise my
family, which I have afive-year-old son and two twin
year old daughters, which hasbeen amazing.
(02:44):
It was a lot, and I got to takeoff right at the point where I
had three kids under two yearsold, so my wife probably really
appreciated that, yeah, and thenI got a wild hair to buy an
HVAC business, mostly becauseHVAC was one of the things when
I was working in the winery thatwe just couldn't do in-house.
(03:04):
We did all of our plumbing, wedid all of our high level
carpentry some beautiful pieceswe did our own concrete, we did
our own wastewater treatment,but we couldn't do our own HVAC.
And I would send guys out toHVAC classes and they'd come
back and they'd be like Jack, Idon't know, and I'm like I just
spent three weeks and a ton ofmoney sending you to this and
you still can't get it.
This has to be some level ofmoat and that is a technical
(03:29):
moat that only a select fewgroup of people can do.
So I went and bought an HVACcompany, moved from Boise, idaho
, out to Nashville in 2022.
And we have just been growingthe business ever since.
Speaker 3 (03:42):
Yeah.
So let me just kind of set thisup here.
So one I mean it sounds likeyou've owned multiple businesses
.
Where did this wholeentrepreneurial spirit come from
?
Is this something from yourfamily?
Is this just something you'vealways decided to?
Speaker 1 (03:56):
tackle.
Yeah, Tyler, I just I don'tlike being told what to do, and
so that that's where it camefrom.
So when, when I was working W2,I did really well in jobs where
the managers would stay out ofmy way and I would work with,
like the GMs or the directorteam, it ended up being like
they would just let me go andsay, Jack, just here's your
(04:18):
really high level goals, go hitthem.
And even from really early on,I would do that.
And anytime that somebody wouldtry and micromanage me, it just
doesn't work for me.
And so what that led to is mesaying I'm just not going to
work in an environment whereanyone can micromanage me
anymore, and I pivoted toentrepreneurship and running
businesses.
Speaker 3 (04:38):
Okay, so autonomy is important to you.
It sounds like Just doing yourown thing is you'll get it done.
Speaker 1 (04:43):
just stay out of my way to you it sounds like just
doing your own thing is you'llget it done.
Just stay out of my way.
Yeah, and ironically right,that's the opposite.
I had to learn the hard waythat in some businesses like
HVAC that's the opposite of whatyou get from customers, right?
But let's just say I'm not thecustomer face of my business.
Speaker 3 (04:58):
Plus, when you own the business, it always feels a
little bit different, that'strue.
Then if you're not the ownerand you're getting that type of
treatment, so let's talk aboutthat HVAC.
So you didn't start as an HVACguy when you bought the HVAC
business.
Is that correct?
Like you didn't have experiencedoing HVAC, or did you Correct?
Speaker 1 (05:15):
So my I mean I was able to sell the SBA on, like
this idea that I fix electricaltroubleshooting at the wineries,
troubleshooting at the wineries.
We did a lot of that.
We have a very handy background.
We had $172 million in wineunder refrigeration at any point
in time, but A that was allcommercial wine, almost
industrial kind of coolingequipment like large glycol
(05:38):
chillers and cooling towers, andthen I went and bought a
residential HVAC service company, which is absolutely completely
different.
So the answer long way aroundis no.
I had almost no experience inactually what HVAC residential
service was.
Speaker 3 (05:54):
And Jack, can you tell me what happened on day one
after you acquired the business?
Speaker 1 (05:58):
Yeah.
So I have a real fun story.
There is I'm driving from Boiseon my big old U-Haul, the
biggest size U-Haul, with thebiggest size trailer behind the
U-Haul, pulling my truck andeverything, and it's a 32-hour
drive.
I did it straight, no sleeping,which is not the smartest move,
but I did it.
And then midway through thatSunday I got a call from the
(06:19):
owner or the ex-owner.
So the seller and he says, hey,I have some bad news for you.
And I go hey, what's going on?
He said you're going to come intomorrow and nobody's going to
be here.
And I said, what do you mean?
And he goes, yeah, everybodykind of just quit.
And I went wait, whoa, whoa,whoa, whoa.
What's going on?
He's like, yeah, everybody hasquit and it's just going to be
me and you tomorrow.
I mean, given that everybodywas a two-man HVAC service team.
(06:44):
But for me going into this withno experience, I mean that was
huge.
Right, I have no moretechnicians in the middle of
summer in Tennessee and it'sjust me.
And so I had to really quicklylearn HVAC, and not only learn
HVAC as a business, but alsolearn how to become an HVAC
technician, which usually takesquite a few years of training,
(07:06):
but I was able to pick it uppretty quick.
Speaker 3 (07:08):
I'm assuming the owner stood by you during that
transition.
Speaker 1 (07:13):
No, no, wow.
So the owner viewed himself asmore of a comfort advisor or a
salesman.
He actually hadn't been in atechnician spot in years, and
years and years.
He's only estimating andselling.
So that generated a very largeproblem for me, because that's
(07:33):
not what I needed at the time.
So we had a month and a halflong transitionary contract and
I let him out of that after twoweeks because I didn't need any
help selling.
I just needed help with thetechnician portion, and so he
was actually just getting in theway.
So I let him go really early onand I just said, hey, there's
two options Either I figure itout and we save the business, or
(07:58):
we flop before a whole month isup.
And so we just went ahead andfigured it out, do you?
Speaker 3 (08:05):
know why the two technicians quit.
What was the story behind that?
Speaker 1 (08:10):
Yeah.
So the story behind why?
A lot of speculation here, so Ican't prove any of these ideas.
But the old owner and you'llsee a trend here the seller
decided to tell the warehousetheir distribution warehouse
that he was selling before hetold the technicians.
So then when the technicianswent in to buy parts, they heard
that the business was sold andthat the new owner was starting.
(08:32):
And there's a lot of uneasyfeelings around that.
Right, absolutely.
Is our pay going to change?
What's going to happen?
This doesn't make sense.
Blah, blah, blah, blah, blah.
And it was sprung on them notby me and not by the old owner,
which didn't buy me any time.
It bought the technicians weeksof time to like figure out
where who they were going to gowork with behind the old owner's
(08:53):
back and then right before atthe maximum pain point, a
comfort advisor.
Speaker 3 (09:03):
How come you didn't feel like I guess I put myself
in this position.
I'm like man, I know nothingabout HVAC.
I really now have no staff.
I'm in a jam here.
I just bought a business.
How come you didn't need, youdidn't feel you needed his help
in terms of the comfort advisingstandpoint, the selling part.
Speaker 1 (09:19):
Yeah, because I think that, based on a really on the
model of HVAC residentialservice that works the best, is
its maintenance.
Good maintenance rolls intogood service, which then rolls
into new units.
So if you don't have the firsttwo sections done well, then
(09:40):
it's very, very difficult to dothe last section.
You can't really show up atcustomers' houses on a
two-year-old unit and offer themnew units.
It just it doesn't make sensebecause there's going to be more
service and more maintenancethan there is sales.
And so when he tried to help meand would take me and show me
here's how I do a maintenance,and I went this is, this is not
how you do a maintenance.
I'm not even an HVAC and I knowthat.
And so that I understood thatreally quickly and I said, hey,
(10:10):
I'll figure out the salesportion later, but I need to
service this customer base andkeep them happy with service and
maintenance.
And so I was able to sell a fewunits.
I was able to do a lot ofservice and pick that up quickly
.
A lot of primarily three to 4amI'd wake up every day and watch
YouTube videos.
I'm more than happy to say thatI am a YouTube university grad
and it would be like top 10things that went wrong in HVAC.
But the nice part was that Ilearned that really quickly
(10:30):
through like, hey, here's whatyou see, and this is what it
causes.
It's a very causal effect.
And then I was lucky enough tosurround myself with some really
good subcontractors who, incases where there were
situations where we couldn't Icouldn't figure it out, I would
send the data to them and belike, hey, I really need your
help, can you help me?
And then, on the background,when I did sell a unit, I would
(10:54):
utilize them to do theinstallation for me so very
beneficial.
Speaker 3 (10:55):
Jack, was your strategy then?
Kind of I don't want to sayself-preservation, but you're
like, hey, I've got this base ofclientele, I'm going to just
make sure they're really coveredwell, and I can do that on my
own and I'll worry aboutbuilding new clients and
business, kind of once I get myfeet grounded.
Was that kind of your strategyonce this all happened?
Yeah, it was minimize losses.
Speaker 1 (11:16):
That was where I went into is like how do I keep the
business afloat?
The nice part about having asmall loan and a small debt
service and no team and noinfrastructure, like the one
good thing about not having abuying a good business and
buying a really bad business,which now I know.
But the good thing was likethere's really low overhead, so
all I needed to do was paymyself and pay the debt service.
(11:39):
Phones were already ringingthat he didn't really have
marketing set up, so I was ableto jump into this.
My trucks were paid off and sothe overhead to keep the
business afloat and the breakeven was very, very low.
So my goal was keep customershappy until I can hire somebody
who knows what they're doingfrom a technician side and then
I can take a breath.
(12:00):
And that's exactly whathappened.
Speaker 3 (12:01):
Awesome If you had a do-over, knowing now that it was
a bad business.
Is this a business you'd stillbuy and say, hey, I learned a
lot from it?
Or would you have selected,taken more time and maybe
selected a different business?
Oh, that's such a hard question.
I know that's such a hardquestion.
Let me add a little color tothat too.
You know, I interviewed JohnWilson and John cut his teeth by
(12:23):
basically acquiring for lack ofbetter words bad businesses.
And what he told me I said well, dude, now that you've made it,
I'm assuming you're likeselecting from the cream of the
crop.
He said to me no, I'm aturnaround expert now, and so
really, that's what he acquiredout of that.
I'm happy if that's what ittakes and it makes sense.
That's his thinking, which washonestly opposite of what I
(12:45):
expected him to say.
Speaker 1 (12:46):
Yeah.
So I get this question indifferent ways.
Sometimes it's like would youbuy or build Is a lot of times a
phrasing I get on here.
Yeah, and I will say that, eventhough that it shook down the
way it did the business and theway that everything happened
allowed me to understand mybusiness in a way that I would
never have understood it if Ibought a larger business to
(13:08):
start right, a business that did2 million in EBITDA and I'm
just the owner who you knowfloats around, has never touched
a tool in his life.
I actually understand mybusiness from a CSR perspective,
from a technician perspective,from a comfort advisor position,
because I've been all those andmuch like John has as well.
And then with that, I thinkthat there's a muscle somewhere
(13:29):
that you build it and it's not aphysical muscle but it's a
enduring pain muscle and it's afiguring out problems muscle and
it's a dealing with situationsthat aren't ideal muscle that
business owners need, especiallycoming from a W2 world, that
you need to build early on.
It's just like, hey, stuff isgoing to happen in your business
(13:49):
, there's going to be fires, andthe whole experience has put me
in a position now where I run avery successful business
multiple businesses and put mein an industry that I've really
enjoyed, and so, to answer yourquestion, I can't even say I
would have liked it to be easier.
I just it is what it is.
Speaker 3 (14:06):
Yeah, I hear you, I get it.
You rolled with the punchesbasically and and now you're in
a great spot.
Yeah, I hear you Kind ofswitching gears.
I want to talk about kind of aturning point.
When did you realize like hey,I'm actually building a real
business now, like I've overcomethe hump and I'm on my way?
Speaker 1 (14:24):
So my first feeling of that was about a year and
some change in.
So, because a lot of thebeginning was just really hustle
and like how do I get my firsttechnicians in?
And then, oh, this techniciandoesn't know what he's doing and
you know the the normal, uh,really early stage business
owner.
But I remember feeling that, uh, we rented a small shared work
(14:47):
office in in like a yeah, like ashared business park, because I
wanted somewhere to bringtechnicians that wasn't like a
home garage or, um, somethinglike that.
So I thought, hey, sharedoffice at least makes me have
some level of ethos.
And we hired who's still with ustoday, my comfort advisor, and
(15:08):
she's on track to sell over 2million this year, 2.5 million
in units.
She is an amazing person who'shelped this business grow and I
couldn't have done it withouther.
And so I remember, like,shortly after I hired her, I was
like, ooh, we got twotechnicians, we got a comfort
advisor, who's who's working,and like we're pricing correctly
now and she's generating saleswithout me having.
(15:31):
I was like this feels like agood first step.
And now that's where, like, Iattribute my good, my, my
turning point where it becamelike a good first step and
that's where, like I attributemy good, my turning point, where
it became like a really hardhustle of just me to like now me
having a partner who I couldwork with, who's also focused on
sales, and, yeah, that'sprobably the moment.
Speaker 3 (15:50):
That's awesome, just as a little tangent.
On the comfort advisor you knowthat's one of the challenges I
see a lot of times in HVAC,where it's just a sticking point
.
It's a stopping point, likepeople have a hard time finding
the right comfort advisor, theright team.
Any words of wisdom there andwhat made it work for you?
Speaker 1 (16:18):
good comfort advisor with such a small company.
But I think what I leaned intoand what I continued to lean
into, and what our business hasalways leaned into from the
early stages, is this vision,this goal, this dream that we
put forward and we're very openabout like, hey, we want to do a
fast, fast growing businesswith you know, we still we want
to hit 20 million by 2030.
Like, we have this, this dream,we have this goal, goal and
we're pushing forward.
And so I think that there'scertain individuals who see this
(16:41):
building opportunity and theysee somebody who is, you know,
competent, trying to push it andtrying to run with this vision,
and a lot of people cling on tothat.
So there's not much you canoffer very competent individuals
early on in terms of pay orpackage or whatever.
But one of the things that youcan do is you can really be
passionate about your projectand that shows through.
Speaker 3 (17:04):
Yeah, what I was thinking when you said that is
the one thing you can offer them, is you, as the owner or the
founder, the belief in you.
Because that's I know, I kindof was there in my career People
believe in you.
They see your energy, they seeyour passion and that's really
what they're signing up for.
Speaker 1 (17:19):
Yeah, exactly, they are signing up for the ability
to build something with somebodythat they think is going to go
far and who they like, and it'sbeen a very mutually beneficial
relationship since then.
Speaker 3 (17:30):
Yeah, you talked about potentially becoming a $20
million a year business in 2030and just kind of going down
this path of kind of making itas a business.
How much have you laid out thatplan?
Like, you know, I don't want toyou disclosed off the recording
your size.
Now I don't want to disclosethat unless you're comfortable,
but how like are you like, hey,I want to be at 12 million this
(17:53):
year, this, this, and I know howmany trucks I'll need and how
many technicians I'll need.
Like, how granular is that, ifat all?
Speaker 1 (17:59):
Yeah, we've we've run that extremely granular, really
.
We've run that down to the T ofhow many calls like cause.
It's all connected, right,right.
So we know how many calls weneed at what percentage of close
rate, which then turns into howmany service calls are running
and how our percent of closerate on maintenance contracts
and how many of those we need tosell as units and our average
unit sale price and how manypeople can run that at what
(18:21):
velocity, based on thepercentage of our revenue that's
generated in which months.
So, like we've, we've ran thisentire model, uh, multiple times
and so far we've grown over ahundred percent year over year,
which wasn't difficult in thebeginning because it was a seven
$800,000 business.
So seven to 1.5 is nothingcrazy.
First year, 1.5 to three was abig step, and then three to
(18:44):
five-ish, a little over fivethis year, and so we will not
hit the 100% mark this year, butwe'll still be in like the 60
to 80%.
So we're really excited aboutthat and what we are planning on
is the continuation of that.
Hey, we want to be 50 pluspercent and if we stick to that
50 plus percent of growth yearover year for the next five
(19:06):
years, we'll easily be at that20% mark or 20 million mark.
Speaker 3 (19:10):
Yeah, it gets pretty hard to be a hundred percent
when you're like a 10 millionyear company, unless there's
like some crazy dynamics goingon, exactly.
Speaker 1 (19:18):
And our market?
Once again, everybody says this, our market is particularly
difficult, more so than othermarkets, is my belief.
Easier than other markets, butharder than a lot of markets.
You know, we just have a lot ofhundred million dollar
companies that we have tocompete up against, who have
amazing purchasing power andhuge scale and big coffers.
So it doesn't make it difficultas we get bigger to actually
(19:41):
they start targeting us right.
It's no longer a you know,we're a small guy that flies
under the radar.
They're like oh, we're going tostart bidding their name now on
PPC and we're going to start,you know, actually viewing them
as competition.
So we've started to see some ofthat with some of the
medium-sized guys and eventuallywe'll have to fight off the
bigger teams here in the nearfuture.
(20:02):
You start to become a target.
Speaker 3 (20:05):
But as long as you're smaller, you probably can
service better and provide a lotbetter service.
Generally is what usuallyhappens.
Speaker 1 (20:13):
Yeah, we try.
I mean, there's some definitepillars of our business that we
lean on that, we believe, keepsus innovative as well as agile,
to be able to kind of go aroundthe big guys and what they have
to do.
View it like as a speedboatversus a cruise ship.
We can move faster and turnbetter.
Speaker 3 (20:30):
Yeah, Before we move on to the next thing I want to
talk with you about, are youopen to sharing those pillars,
the pillars of?
You said we have certainpillars that you kind of go by.
Are you open to sharing them?
Speaker 1 (20:42):
Yeah, so I mean, one of the huge pillars that we
really push on is the ability topay our employees better than
they would get paid elsewhere.
So we can't offer a lot ofthings, but what we can do is we
work really hard and this issuper granular.
So excuse, excuse me here, butlike we're able to focus on over
(21:06):
offshoring certain individualpositions in the office or that
expense dollar, and we canreallocate it, and so what we do
is reallocate a lot of thatmoney back into technician
positions, and so what we see isthat we are able to take
technicians who are reallyreally good, top tier
(21:26):
technicians, and then we're ableto take them away from their
companies, because as a smallcompany, we have recruiters who
are overseas you wouldn't knowit, but we have them and then
we're able to offshore otherpositions, like HR, generalist
or ARAP or all these kinds ofauxiliary roles, and we're able
to save a huge amount of moneyon that, and then pay the
(21:48):
technicians five, 10, $15 morean hour, and what you find is,
wow, like you pay someone $7 anhour more.
They're more likely totransition businesses, and so
that's one of the big pillarsthat we lean on to do it, and
that's another pillar kind ofhidden inside, is by offshoring
a lot of that labor we are ableto generate more positions at
(22:12):
the same rate.
So we can hire out of LatinAmerica, for example, at you
know three times their you knowmonthly wages there, or what it
would be their average monthlywages.
We can pay them three times asmuch of that.
They're living really reallywell and comfortably and so they
care a ton and they're comingout of their country with like
(22:33):
biomedical engineering degrees,coming out of their country with
like biomedical engineeringdegrees, looking for these roles
and they're picking up, youknow, systems project roles and
HR roles.
They're coming with HR master'sdegrees, they speak amazing
English, they're wonderfulpeople and long story short is
we can have those HR generalists, we can have ARAP, we can have
call center managers.
(22:54):
We can have all these positionswe wouldn't normally be able to
have.
But because we've gotten reallygood at being scrappy and
finding the right individualsoverseas, we're able to create
win-win situations for thebusiness, for our team and then
for those overseas individuals.
Speaker 3 (23:09):
So it sounds like you're in terms of the positions
you're using.
It sounds like maybe likeaccounting, back office
recruiting, did you say?
Speaker 1 (23:17):
HR Positions in HR.
Yeah, so like we keep our HRperson local, so we have one
local HR individual who managesthe team and then she gets
assistance from two HRgeneralists who work on
different projects, eitherrecruiting or payroll, or
in-house stuff like that.
Speaker 3 (23:35):
What about like CSR type roles?
I imagine those are.
Our entire CSR team is overseas.
Speaker 1 (23:39):
Yes, we have five individuals in inbound CSR
overseas.
We have one inside salespersonthat's overseas.
We have one outbounder who'soverseas, our install
coordinator who works with ourcomfort advisor he's overseas.
And so, like we can have thesepositions that we normally would
cost us, you know, an absolutearm and a leg.
(24:01):
But we can reduce that laboroverhead by going overseas, and
we've learned to do it really,really well.
Speaker 3 (24:07):
Oh, that's very cool.
I wanted to shift gears hereand talk about, like, good
advice and bad advice, and Ididn't talk about this too much,
so let me set it up.
You've now gotten into thewhole acquisition world where
and in fact, your podcastJackquisitions which I love, by
the way early, early stage ofyour podcast just starting out,
I think you're like 13 publishedepisodes and it's already a
(24:29):
great podcast.
Talk to me a little bit aboutfirst, talk about just how you
got into this acquisition space,and then I want to.
I've got a couple of questionsrelated to that.
Yeah, so it was a mix.
Speaker 1 (24:38):
There's a mix of reasons why.
The first and probably the mostimportant reason is when I
bought my business, it was aterrible deal, as you can
probably guess from the earlyside of this podcast.
If you've listened to the wholething, you'd see why it was a
bad deal.
Like I paid way too much.
I due diligences, you know Ididn't put in provisions I
(24:58):
should have put in, and it was amess, and so that's a big
portion of it.
The second portion is like goingthrough the acquisition process
is a very confusing process forsomeone who's never gone
through it.
When do I do LOI?
When do I do this?
How do I do this?
Who's my team?
And all of this I mean luckilyfor me, because the business I
(25:19):
purchased was so small, which isterrible, but because it was so
small it actually mitigated alot of my life risk, right.
So my payment is somethingwhere, if I really wanted to go
out and get a job, I probablycould have gotten a job and
covered that payment and mylifestyle.
So point being is that therewas a lot of things that I did
(25:39):
wrong that I want to help peoplenot do wrong.
That's the first part, and thenthe second part is there's a lot
of bad information out there,with other gurus and people who
are pushing this, and I mean Iwas on the other day and some
guy was like it takes 90 days tobuy a business, 30 days to find
the business and 60 days toclose.
I'm going, yeah, there is noway you're finding a good
(26:00):
business, especially local toyou, in 30 days, like especially
if you don't know anythingabout business buying, and so
there's just a lot of badinformation out there.
If you listen to the podcast,it might not make you happy,
because I'm really real aboutwhat the situation is.
You're personally guaranteeingyour financial livelihood on
(26:20):
this.
If you own a house, you'reputting that up on the market or
under a guarantee, but we getreally granular and it's a lot
of fun to be able to do that.
I bought four businesses now inthe last three years, so you
know I'm in the space.
I really enjoy acquisition,business acquisition, and so
that's a lot of the reason whywe started this.
(26:41):
We saw the huge need, mixedwith some issues with what's
currently out there, mixed with.
I have a personal passion forhelping people get this right,
because the difference betweenone or two items will make your
life significantly easier.
Post-close.
Speaker 3 (26:56):
Yeah, one of the things I see so much.
Jack prospects will reach outto me.
I'll have a meeting with themand I tell you this is 80% of
the time it's true.
Let's say they bought abusiness with $800K EBITDA or
cashflow or whatever you want tocall it, and they now have
owned the business for a yearand it's down to $300K or $200K
and they barely can service thedebt.
(27:17):
On the SBA loan, I had one cometo me about a couple of years
back.
They were worried about notbeing able to make the covenants
because they had a credit lineand they were kind of upside
down in terms of debt and theywere probably gonna get their
credit line pulled because theircovenants didn't work.
And I just get this a lot andit actually makes me really sad
because I feel like you know, ifthey had a little more help on
(27:41):
the front end someone like you,maybe someone like me and just
kind of running through thescenarios.
And another thing I see a lotis they want to make changes
right away, which I think is alittle bit dangerous because
they don't even reallyunderstand the business yet.
Like I had one come to me hewanted to add he added a service
department and on the surfaceit sounded good.
But he added several staff.
He didn't know how to run theservice department.
It ate up a bunch of his profitand cashflow and he was just
(28:05):
like he was in a bind.
He was like dude, I feel likeI'm going to go out of business
and so it's sad.
So I'm curious like what's yourthoughts around that?
Speaker 1 (28:12):
as you hear that, so my thoughts around that are
exactly what you're saying is Isee it all the time is a lot of
people are making really badchoices on the businesses that
they're buying with debt.
So that's the first big redflag.
It's like somebody comes to mesays, hey, jack, I got this
great hvac business that I'mbuying.
I've heard hvac is an amazingbusiness to buy.
(28:32):
I don't haven't listened to youyet, but I just heard your
story and you know I'm excited.
Said, well, how much of that'snew construction.
Because what a lot of peopledon't understand is there's
these subsects inside the tradesof like, yes, it's HVAC but
it's industrial, or yes, it'sHVAC but it's commercial, or yes
, it's commercial multifamily,or it's commercial new
construction, and so there's allthese little sub areas.
(28:59):
They hear that HVAC is great,which it is, but they don't
understand kind of the nuance ofthe business itself.
And so what it ends upgenerating is somebody who goes
in and buys a new constructionbusiness realizes, oh, in a
small downturn, now I can'tafford this debt.
And then, like you said, theytry to start up a service line
because, oh, now they understand.
But the problem is that whenyou start that service line they
(29:21):
don't understand that, hey,service people and installers
are not the same.
They don't understand the salesprocess and the sales cycle,
and so a lot of that, to get offmy soapbox is driving it back
to like, hey, let's talk aboutbuying a business and what you
need to be looking for and fullyunderstanding home service
(29:43):
business, acquisitions and whatthat looks like on the whole.
Let's look at their marketing.
Let's look at you know what istheir gross margin?
Who's their customer, theirservice, is it B2B, b2c, is a
B2B B2C?
And then, lastly, what?
The biggest one that I find toanswer your question in a long
roundabout way, tyler, is whatis your specialty as the buyer?
So, are you a CFO coming into abusiness or are you like me and
(30:10):
you have operational experienceunderstanding?
Hey, I can do electricaltroubleshooting.
So when I started, wheneverybody quit, I realized that
half of an HVAC unit issues areall electrical troubleshooting.
A capacitor is a capacitor,contactor is a contactor.
You know you have to checkincoming voltage and that'll
solve 50% of your problems.
(30:31):
Now I just need to learnrefrigeration theory.
But that's me, and so buying asmall business for me, where
that specific thing happened,wasn't a deal killer, whereas if
somebody who had a, you know, amarketing background, bought
that same business.
They would have never been ableto to do that.
And vice versa.
(30:52):
Like if I bought a giantbusiness, I don't know if I
would have been able tounderstand the CFO role or the
finance role or the marketingrole or all these different
differential roles kind of onthe bigger businesses as quickly
as I needed to actually keepthat business running steady
state.
So that's where, you see, thedrop is because people don't
understand their skill set needsto fit exactly into the
(31:15):
business and the size thatthey're buying.
Speaker 3 (31:17):
Yeah, and this leads into my next question what do
you think is, like, the biggestmyth when it comes to
acquisitions?
Is there something commonly outthere that's just a myth.
It's just not true.
Speaker 1 (31:28):
Yeah, it's exactly that and I've talked about that
quite a bit.
It's that there is a specificsize business that you need to
buy.
So a lot of times what we seeis like people are cosplaying
private equity, like they seethe private equity model and
they go private equity is onlybuying $1 million EBITDA
business isn't up.
So I must need to do that.
(31:48):
But the answer is maybe Like,if your skill set is private
equity and you understandmanagement, leadership, those
kind of items and you have thatmoney to do it, yeah, that's
probably where you should go.
You should not buy a very smallbusiness under 3 million where
the owner goes into the fieldregularly, Like you're not going
(32:09):
to be able to do anything there.
And then vice versa, the samething.
Like if you understand, youknow operations, you should
focus on a business that needsoperations and not go buy
something bigger that alreadyhas some because your, your
skill set is not going to do asmuch value while you're still
learning the industry and thebusiness itself.
Speaker 3 (32:28):
That's where you see, like the people who make
decisions because they thinkthat they need to make decisions
, and it's like no, you don't,you need to just operate steady
state Right, I think there'salso kind of a myth and feel
free to correct me if you see itdifferently where I think
people buy a business and theygo oh well, I'll just hire an
operator, or I'll just hire a GMor whatever, and you know, I
(32:49):
don't really need to know thedetails.
Or you know, there's someonethat works there that has a
license, I don't really need it,or whatever the case is, I
think that's kind of a littlebit of a myth too.
How do you feel about that?
Speaker 1 (33:00):
100% a myth.
Yeah, there's very, very rareinstances where putting in an
operator at any point in yourbusiness, even as a successful
business owner, generates abetter business.
And that's just because, hey,nobody's going to care about
your debt and your PG and yourbusiness like you will, Because
if they get fired they can goget another job really pretty
(33:21):
fairly easily, especially in thetrades right now.
But if they do that, that meansthat they've sunk your business
into a giant hole that now youneed to crawl out of.
So that's a huge myth.
That's a big one that I preacha lot.
The only other myths that I seegenerally are.
One of my favorites is there'sno marketing.
It's a huge opportunity which,yes, technically big opportunity
(33:42):
to add marketing to yourbusiness, but you're
undervaluing the amount of timeand energy and capital it takes
to actually get a marketingsystem and program running.
It takes I was talking toSweetwater Plumbing out in North
Carolina and he estimated thathe spent $230,000 on trying to
get his marketing so that itactually ROI'd, and that's I
(34:05):
mean I'd say probably I'm in thehundreds of thousands of
dollars in marketing spend tofind channels that work properly
, and so it's not just like thislever you pull and then
marketing come, you put up awebsite and all of a sudden your
business skyrockets.
It's like hey, there's about athousand steps you could take
and a lot of them are missteps.
So, making sure that you buysomething with the systems in
(34:27):
place already that are alreadyworking and already have showing
fruit, that's a much betterbusiness than not, Right, right.
Speaker 3 (34:35):
Good stuff Another big one.
Speaker 1 (34:36):
Yeah, that's a huge one.
Well, I think I'm not saying Iknow I'm going to keep going on
this soapbox, but like I thinkthat also applies to everything.
Right, and that applies to hey,their trucks are all you know,
they don't have a maintenanceprogram for their fleet vehicles
.
We just need to do that,they'll have less downtime and
boom, it's easy.
Well, none of it is easy.
So every system that you thinkis an opportunity, probably
(34:59):
technically is an opportunity,but not without a huge cost
expenditure to get there.
So that's like I want that toextrapolate to every portion of
the small business that you'rebuying is understanding that
anything that you think is a lowhanging fruit probably not.
So don't go changing thingsbecause you're going to have a
huge expenditure and then, likeyou said, tyler, they're going
(35:21):
to then see a huge dip inrevenue and or net just because
they thought that something wasan opportunity and they could
tackle it and it was a muchbigger fish.
Speaker 3 (35:31):
Yeah, that's one of my biggest challenges is I get
people come to me and I don'twant to be the negative finance
guy, but I want to keep itpractical.
And you know people, whenthey're buying something,
they're really excited, they'rethe marketing one is the classic
one, it's all.
I just need a little bit ofmarketing budget and you know I
can grow this by 25% and I wishit were that easy, like you know
, I wish you know it's just likeyou and me both.
(35:57):
It's a fuss.
You can just turn it on and and, oh my gosh, all this water
comes out.
It just it never works out Likewe.
You know I always just try tocoach people, like you know.
You know it sounds good,everything you're saying is
right, but it never works outlike we think it does.
And if you don't havecontingency building, there's a
high probability you're going toget caught off guard.
Yeah, yeah, that's a brilliantway to put it.
Yeah, okay, I want to talk aboutand I think this is appropriate
(36:18):
with what we were just talkingabout.
You know, a lot of times,business owners the first thing
they want is hey, I want to growfast, and what's my first step?
Like, how do I grow fast.
So when I say something like toyou, what comes to mind in
terms of what are some steps youshould take and it doesn't
necessarily have to be aroundfast growth, but that's what I
hear often what do you think aresteps that?
Is it CSR related, or what doyou think they should be doing
(36:38):
as first steps?
Speaker 1 (36:40):
So if you wanted to grow fast.
There's really two keys that Ilook at, and the first one is no
matter what type of businessyou're running, it's to hire a
sales individual.
Like I said, my turning pointwas a CA and I think that's
because when you have somebodyfocused directly on generating
revenue and high amounts ofrevenue, then that's their goal,
is they're going to generatehigh amounts of revenue,
(37:02):
especially if they're oncommission structure.
So they have two options.
A is that they don't work out,which we had somebody like that.
He ran for two months, didn'twork out, got rid of him because
he was a terrible CA, and thenwe hired Elena, who's now our CA
, and she's amazing.
She was able to drive hugeamounts of revenue really
quickly.
But when you have a salesdedicated person, you're going
(37:24):
to see your dedicated salesstream increase just because
there's somebody solely focusedon that.
So that's the first high growthmetric is like I don't know if
it's a comfort advisor or asalesperson in plumbing or a B2B
person who's gonna go and knockdoors at plumbing companies to
find some kind of business, buthaving a dedicated salesperson
(37:46):
focused solely on generatingsales is sounds silly, but
that's one of the huge ways.
It's a huge one.
The second one is, as we spokeabout earlier, is acquisitions.
So we've done four in the lastthree years.
Acquisitions are a great butextremely, extremely risky and
dirty way for quick growth.
So we've gotten very good at it.
(38:07):
But it can be very difficult andcan be chaotic, right, because
you are slamming togethersystems, you're slamming
together teams and people and atthe end of the day, if you're
able to do it well or you getlucky enough and you're adding,
you know, a million, 2 million,3 million, 5 million to your top
(38:27):
line, and we always say, hey,you know the easy way we do the
breaking $5 million workshop,the easiest way and the way we
do the breaking $5 millionworkshop.
The easiest way and the fastestway to get to $5 million in
revenue is to buy it.
Like, if you can go outtomorrow and buy a $5 million
business, you avoid all theheadaches of the one to $5
million and now you have a $5million shop.
So that's going to be one ofthe quickest ways to growth.
(38:50):
It is not easy, it is notnecessarily fun and it can cause
lots of chaos in your businessand it can actually hurt your
business more than it helps itif you don't do it correctly.
But if you're able to do itcorrectly, I mean easily, the
fastest way.
Speaker 3 (39:05):
Yeah, the other thing that I love about acquisitions
is it's so common for us to getstuck at a certain level,
whether that be 3 million, 5million, 7 million, it just
happens.
I mean, I'll never forget wewere stuck at 15 million and it
was so frustrating because youtake a step forward and then you
take two steps back and there'slike, oh, we're back at 15
million again and acquisitionsare one way to your point.
(39:27):
Like you just get to 5 million,like it catapults you and you
acquire talent.
If, let's say, you don't havethat comfort advisor and you're
looking at an acquisition ofsomeone that does have a really
stable, long-term person, thatcould be a way to infuse talent
in addition to sales 100%.
Speaker 1 (39:45):
Yeah, I mean, you hit the nail on the head.
We call them step changes.
There's a step change at three.
There's a step change at five.
There's a step change at three.
There's a step change at five.
There's a step change between10 and 20, depending on your
business and it's just like youhave to reinvest so much into
your business to grow past acertain point, whether that be
managers, upper upper levelservice managers, c-suite team,
whatever the case may be, to getthere.
(40:06):
There's so much investment thatit is very difficult at certain
points to blast through thosestep changes, and one of the
easy and quick ways to do it isto just buy your way through.
Speaker 3 (40:16):
Yeah, that's good stuff.
Hey, and just wrapping up here,I've got one last thing I want
to go over with you.
What is your looking ahead?
Look like Like, where do youwant to be?
I mean, you mentioned the 20million.
That's what are we?
It's really not that far outactually.
It's really not that far outactually 2030.
Four years, yeah, that's not acrazy amount of time.
So that's kind of your real biglooking ahead.
Is there anything else you'reworking on or you're thinking
(40:37):
about?
Speaker 1 (40:37):
I mean, we are always working on that and we have
been doing an amazing job thisyear, so I'm super proud of my
team.
This is the first year where weare not hindered by leads, so
we have an abundance of leads,too much work.
We are hindered by talent, andso we are taking those changes
(41:01):
in our business to hirerecruiters and make sure that
next year we don't have talentissues and then we will have
lead issues again because we'llhave too many people.
So we'll go back and forth, butat least in the upward
direction.
And so that be all being saidis, yeah, 20 million by 2030.
That's the goal.
We're on track.
I think we have a valid path toget there.
We have some acquisitions in ourpipeline that we are always
(41:22):
working on trying to close, tobuy our way quicker to there.
And then, you know, on the side, we just continuing to network
and meet people and runacquisitions and help people
with acquisitions as a passionproject, continue working with
owned and operated to helppeople operate.
We have a workshop in two weeks, so that's always fun.
(41:44):
We get to go up and talk tobusiness owners and that's a
great time.
And then quick staffers wetalked about staffing a lot.
I run a staffing agency on theside because I was able to take
all my SOPs and scripts and wetalked about John.
I could take a lot of John'sSOPs and scripts and I get to
steal them, rebuild them forquick staffers and then create
(42:04):
some really nice frameworks forpeople and help people out with
exactly what I'm doing and whathe's doing, which is overseas
talent.
Speaker 3 (42:10):
That's really cool.
You had mentioned kind of alittle bit in terms of like your
growth plan and potentiallyacquiring.
To get to that, Do you have anyintensive like intentions of
adding like an apprenticeprogram?
A lot of times people I'll talkoff here, especially when they
start getting into that $20million range they'll create an
in-house type of techniciantraining plan where they'll just
(42:31):
hire, you know, apprentices andgrow them right up.
Speaker 1 (42:34):
Yeah, we have a pseudo version of that.
Okay, so, like we do generally,we hire one green hand at a
time and then we train them forabout a year.
So we have two of our graduatesthat run in our service
department right now.
It's one of the best ways thatwe find to get really high
skilled technicians.
So it's one of the best waysthat we find to get really high
skilled technicians, but wedon't run it anywhere near some
(42:54):
of the big companies that havelike full 60 day, you know,
apprentice courses.
We just we understand thatthat's a great way to bring on
great talent, and so we look fora very specific thing when we
are going through that processand when we find it, we'll bring
them on if we have an opening.
Speaker 3 (43:10):
Yeah, that's awesome, that's cool.
Okay, so I just want to wrap uphere.
A lot of really good stuff youjust shared, I think, a lot of
takeaways for me.
I would say one was just yourwhole story of like having your
staff quit and starting fromground zero.
It sounded like you kept yourcomposure and it was pretty cool
how you were able to translateyour electrical background to
(43:31):
really be able to service 50% ofthe type of things you were
going to run across anyway,which I think is a great
contingency plan, even thoughyou didn't necessarily plan for
that.
So there was just a lot of goldnuggets.
I loved your practicalness interms of acquiring and myths.
A lot of good stuff In terms oflinks if people wanted to reach
out to you.
You've got the HVAC Jack.
(43:52):
Is your Twitter handle Ownedand operated?
We mentioned John Wilson'spodcast.
You got it.
Are you still co-hosting onthat?
I haven't listened to a recentone.
Speaker 1 (44:01):
Yeah.
So I mean I still jump in fromtime to time.
Less direct co-hosting on aweekly basis and more, you know,
like a monthly basis, got it so?
So Jackquisitions takes up mostof my time, which is
jackquisitionscom, yeahjackquisitionscom, and then
Jackson L Carr with two R's.
Speaker 3 (44:16):
Jackson L Carr is your LinkedIn.
If anybody wants to reach out,I'll put these in the show notes
at Profit and Grit.
Awesome podcast, awesome wisdom.
I can't thank you enough forbeing on here.
Speaker 1 (44:26):
Yeah, of course.
Thanks, tyler, I reallyappreciate it.
It's been fun.
Thanks, jack.
Speaker 3 (44:31):
Huge shout out to Jack and a thanks for sharing
the kind of lessons that you canonly learn the hard way.
From losing his whole teambefore day one to building a
multi-million dollar shop withsmart hiring and sharper
decision making.
This was literally amasterclass in staying in the
fight.
So if your business is growingbut the numbers don't make sense
(44:56):
or maybe the cash isn't showingup the way it should, that's
exactly what I do.
I help trade business ownersget their arms around the
financial side so they can scalewithout stress, so they can
scale confidently, so they canscale without thinking like, hey
, am I doing the right things?
If that sounds like where you'reat, please grab a free intro
(45:17):
session with me atcfomadeeasycom.
Once again, that'scfomadeeasycom.
No pressure in intro meeting.
We just have a cool chat topeople talking about what's
working, what needs fixing, andjust see where that takes us.
Talking about what's working,what needs fixing, and just see
where that takes us.
As always.
Thanks so much for listeningand I'm excited about the future
(45:38):
episodes here.
I've got so many killer guestslined up.
I just can't wait for you tohear them.
I'll catch you next week, takecare, thank you.
Day one, every single technician quit.
I left with a dispatcher, awrench and zero HVAC experience.
Speaker 2 (00:10):
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.
Speaker 3 (00:31):
Martin, hey, hey, welcome back to Profit and Grit.
This is Tyler Martin, your host.
Today I got a great guest.
His name is Jack Carr.
He bought an HVAC companythinking he'd ease in, learn the
ropes and grow from there.
Instead, his whole team quit,and this is before day one Now.
(00:52):
He had no experience, no techs.
Middle of summer, he rolled uphis sleeves, learned HVAC from
scratch and went all in Fastforward.
He's now running a $5 millionshop, scaling through smart
acquisitions and on track to hit$20 million by 2030.
(01:13):
We get into what that firstyear really looked like, how he
uses offshore talent to pay histechs more and why so many
trades buyers get burned, andthe exact moves he's making to
keep growing without killingmargin.
If you're thinking about buyinga trades business or you're
(01:35):
trying to scale one withoutlosing your mind or your money,
this episode is a must listen.
Let's get into it with Jack.
Hey, jack, welcome to theProfiting Grit Podcast Show.
How are you doing Good?
And yourself, tyler?
I'm doing great man, thanks forbeing on the show.
I always love to start learninga little bit about you.
Can you tell us a little bitabout yourself and then maybe,
(01:57):
if you would, even a littlepersonal note about yourself.
Speaker 1 (02:00):
Yeah, I mean me.
I'm a ex winery operationsmanager.
That was where I got cut myteeth as I started off in
facilities maintenance andoperations, ended up moving my
way up the ladder runningmultiple wineries.
Always had a bug though forentrepreneurship and so started
a few businesses.
I won't kill the dead horsehere, beat the dead horse, but
(02:23):
essentially essentially a mobilemaintenance business, and then
a Bitcoin mining server farm,which I exited late 2010s at a
really good times and then tooka few years off to raise my
family, which I have afive-year-old son and two twin
year old daughters, which hasbeen amazing.
(02:44):
It was a lot, and I got to takeoff right at the point where I
had three kids under two yearsold, so my wife probably really
appreciated that, yeah, and thenI got a wild hair to buy an
HVAC business, mostly becauseHVAC was one of the things when
I was working in the winery thatwe just couldn't do in-house.
(03:04):
We did all of our plumbing, wedid all of our high level
carpentry some beautiful pieceswe did our own concrete, we did
our own wastewater treatment,but we couldn't do our own HVAC.
And I would send guys out toHVAC classes and they'd come
back and they'd be like Jack, Idon't know, and I'm like I just
spent three weeks and a ton ofmoney sending you to this and
you still can't get it.
This has to be some level ofmoat and that is a technical
(03:29):
moat that only a select fewgroup of people can do.
So I went and bought an HVACcompany, moved from Boise, idaho
, out to Nashville in 2022.
And we have just been growingthe business ever since.
Speaker 3 (03:42):
Yeah.
So let me just kind of set thisup here.
So one I mean it sounds likeyou've owned multiple businesses
.
Where did this wholeentrepreneurial spirit come from
?
Is this something from yourfamily?
Is this just something you'vealways decided to?
Speaker 1 (03:56):
tackle.
Yeah, Tyler, I just I don'tlike being told what to do, and
so that that's where it camefrom.
So when, when I was working W2,I did really well in jobs where
the managers would stay out ofmy way and I would work with,
like the GMs or the directorteam, it ended up being like
they would just let me go andsay, Jack, just here's your
(04:18):
really high level goals, go hitthem.
And even from really early on,I would do that.
And anytime that somebody wouldtry and micromanage me, it just
doesn't work for me.
And so what that led to is mesaying I'm just not going to
work in an environment whereanyone can micromanage me
anymore, and I pivoted toentrepreneurship and running
businesses.
Speaker 3 (04:38):
Okay, so autonomy is important to you.
It sounds like Just doing yourown thing is you'll get it done.
Speaker 1 (04:43):
just stay out of my way to you it sounds like just
doing your own thing is you'llget it done.
Just stay out of my way.
Yeah, and ironically right,that's the opposite.
I had to learn the hard waythat in some businesses like
HVAC that's the opposite of whatyou get from customers, right?
But let's just say I'm not thecustomer face of my business.
Speaker 3 (04:58):
Plus, when you own the business, it always feels a
little bit different, that'strue.
Then if you're not the ownerand you're getting that type of
treatment, so let's talk aboutthat HVAC.
So you didn't start as an HVACguy when you bought the HVAC
business.
Is that correct?
Like you didn't have experiencedoing HVAC, or did you Correct?
Speaker 1 (05:15):
So my I mean I was able to sell the SBA on, like
this idea that I fix electricaltroubleshooting at the wineries,
troubleshooting at the wineries.
We did a lot of that.
We have a very handy background.
We had $172 million in wineunder refrigeration at any point
in time, but A that was allcommercial wine, almost
industrial kind of coolingequipment like large glycol
(05:38):
chillers and cooling towers, andthen I went and bought a
residential HVAC service company, which is absolutely completely
different.
So the answer long way aroundis no.
I had almost no experience inactually what HVAC residential
service was.
Speaker 3 (05:54):
And Jack, can you tell me what happened on day one
after you acquired the business?
Speaker 1 (05:58):
Yeah.
So I have a real fun story.
There is I'm driving from Boiseon my big old U-Haul, the
biggest size U-Haul, with thebiggest size trailer behind the
U-Haul, pulling my truck andeverything, and it's a 32-hour
drive.
I did it straight, no sleeping,which is not the smartest move,
but I did it.
And then midway through thatSunday I got a call from the
(06:19):
owner or the ex-owner.
So the seller and he says, hey,I have some bad news for you.
And I go hey, what's going on?
He said you're going to come intomorrow and nobody's going to
be here.
And I said, what do you mean?
And he goes, yeah, everybodykind of just quit.
And I went wait, whoa, whoa,whoa, whoa.
What's going on?
He's like, yeah, everybody hasquit and it's just going to be
me and you tomorrow.
I mean, given that everybodywas a two-man HVAC service team.
(06:44):
But for me going into this withno experience, I mean that was
huge.
Right, I have no moretechnicians in the middle of
summer in Tennessee and it'sjust me.
And so I had to really quicklylearn HVAC, and not only learn
HVAC as a business, but alsolearn how to become an HVAC
technician, which usually takesquite a few years of training,
(07:06):
but I was able to pick it uppretty quick.
Speaker 3 (07:08):
I'm assuming the owner stood by you during that
transition.
Speaker 1 (07:13):
No, no, wow.
So the owner viewed himself asmore of a comfort advisor or a
salesman.
He actually hadn't been in atechnician spot in years, and
years and years.
He's only estimating andselling.
So that generated a very largeproblem for me, because that's
(07:33):
not what I needed at the time.
So we had a month and a halflong transitionary contract and
I let him out of that after twoweeks because I didn't need any
help selling.
I just needed help with thetechnician portion, and so he
was actually just getting in theway.
So I let him go really early onand I just said, hey, there's
two options Either I figure itout and we save the business, or
(07:58):
we flop before a whole month isup.
And so we just went ahead andfigured it out, do you?
Speaker 3 (08:05):
know why the two technicians quit.
What was the story behind that?
Speaker 1 (08:10):
Yeah.
So the story behind why?
A lot of speculation here, so Ican't prove any of these ideas.
But the old owner and you'llsee a trend here the seller
decided to tell the warehousetheir distribution warehouse
that he was selling before hetold the technicians.
So then when the technicianswent in to buy parts, they heard
that the business was sold andthat the new owner was starting.
(08:32):
And there's a lot of uneasyfeelings around that.
Right, absolutely.
Is our pay going to change?
What's going to happen?
This doesn't make sense.
Blah, blah, blah, blah, blah.
And it was sprung on them notby me and not by the old owner,
which didn't buy me any time.
It bought the technicians weeksof time to like figure out
where who they were going to gowork with behind the old owner's
(08:53):
back and then right before atthe maximum pain point, a
comfort advisor.
Speaker 3 (09:03):
How come you didn't feel like I guess I put myself
in this position.
I'm like man, I know nothingabout HVAC.
I really now have no staff.
I'm in a jam here.
I just bought a business.
How come you didn't need, youdidn't feel you needed his help
in terms of the comfort advisingstandpoint, the selling part.
Speaker 1 (09:19):
Yeah, because I think that, based on a really on the
model of HVAC residentialservice that works the best, is
its maintenance.
Good maintenance rolls intogood service, which then rolls
into new units.
So if you don't have the firsttwo sections done well, then
(09:40):
it's very, very difficult to dothe last section.
You can't really show up atcustomers' houses on a
two-year-old unit and offer themnew units.
It just it doesn't make sensebecause there's going to be more
service and more maintenancethan there is sales.
And so when he tried to help meand would take me and show me
here's how I do a maintenance,and I went this is, this is not
how you do a maintenance.
I'm not even an HVAC and I knowthat.
And so that I understood thatreally quickly and I said, hey,
(10:10):
I'll figure out the salesportion later, but I need to
service this customer base andkeep them happy with service and
maintenance.
And so I was able to sell a fewunits.
I was able to do a lot ofservice and pick that up quickly
.
A lot of primarily three to 4amI'd wake up every day and watch
YouTube videos.
I'm more than happy to say thatI am a YouTube university grad
and it would be like top 10things that went wrong in HVAC.
But the nice part was that Ilearned that really quickly
(10:30):
through like, hey, here's whatyou see, and this is what it
causes.
It's a very causal effect.
And then I was lucky enough tosurround myself with some really
good subcontractors who, incases where there were
situations where we couldn't Icouldn't figure it out, I would
send the data to them and belike, hey, I really need your
help, can you help me?
And then, on the background,when I did sell a unit, I would
(10:54):
utilize them to do theinstallation for me so very
beneficial.
Speaker 3 (10:55):
Jack, was your strategy then?
Kind of I don't want to sayself-preservation, but you're
like, hey, I've got this base ofclientele, I'm going to just
make sure they're really coveredwell, and I can do that on my
own and I'll worry aboutbuilding new clients and
business, kind of once I get myfeet grounded.
Was that kind of your strategyonce this all happened?
Yeah, it was minimize losses.
Speaker 1 (11:16):
That was where I went into is like how do I keep the
business afloat?
The nice part about having asmall loan and a small debt
service and no team and noinfrastructure, like the one
good thing about not having abuying a good business and
buying a really bad business,which now I know.
But the good thing was likethere's really low overhead, so
all I needed to do was paymyself and pay the debt service.
(11:39):
Phones were already ringingthat he didn't really have
marketing set up, so I was ableto jump into this.
My trucks were paid off and sothe overhead to keep the
business afloat and the breakeven was very, very low.
So my goal was keep customershappy until I can hire somebody
who knows what they're doingfrom a technician side and then
I can take a breath.
(12:00):
And that's exactly whathappened.
Speaker 3 (12:01):
Awesome If you had a do-over, knowing now that it was
a bad business.
Is this a business you'd stillbuy and say, hey, I learned a
lot from it?
Or would you have selected,taken more time and maybe
selected a different business?
Oh, that's such a hard question.
I know that's such a hardquestion.
Let me add a little color tothat too.
You know, I interviewed JohnWilson and John cut his teeth by
(12:23):
basically acquiring for lack ofbetter words bad businesses.
And what he told me I said well, dude, now that you've made it,
I'm assuming you're likeselecting from the cream of the
crop.
He said to me no, I'm aturnaround expert now, and so
really, that's what he acquiredout of that.
I'm happy if that's what ittakes and it makes sense.
That's his thinking, which washonestly opposite of what I
(12:45):
expected him to say.
Speaker 1 (12:46):
Yeah.
So I get this question indifferent ways.
Sometimes it's like would youbuy or build Is a lot of times a
phrasing I get on here.
Yeah, and I will say that, eventhough that it shook down the
way it did the business and theway that everything happened
allowed me to understand mybusiness in a way that I would
never have understood it if Ibought a larger business to
(13:08):
start right, a business that did2 million in EBITDA and I'm
just the owner who you knowfloats around, has never touched
a tool in his life.
I actually understand mybusiness from a CSR perspective,
from a technician perspective,from a comfort advisor position,
because I've been all those andmuch like John has as well.
And then with that, I thinkthat there's a muscle somewhere
(13:29):
that you build it and it's not aphysical muscle but it's a
enduring pain muscle and it's afiguring out problems muscle and
it's a dealing with situationsthat aren't ideal muscle that
business owners need, especiallycoming from a W2 world, that
you need to build early on.
It's just like, hey, stuff isgoing to happen in your business
(13:49):
, there's going to be fires, andthe whole experience has put me
in a position now where I run avery successful business
multiple businesses and put mein an industry that I've really
enjoyed, and so, to answer yourquestion, I can't even say I
would have liked it to be easier.
I just it is what it is.
Speaker 3 (14:06):
Yeah, I hear you, I get it.
You rolled with the punchesbasically and and now you're in
a great spot.
Yeah, I hear you Kind ofswitching gears.
I want to talk about kind of aturning point.
When did you realize like hey,I'm actually building a real
business now, like I've overcomethe hump and I'm on my way?
Speaker 1 (14:24):
So my first feeling of that was about a year and
some change in.
So, because a lot of thebeginning was just really hustle
and like how do I get my firsttechnicians in?
And then, oh, this techniciandoesn't know what he's doing and
you know the the normal, uh,really early stage business
owner.
But I remember feeling that, uh, we rented a small shared work
(14:47):
office in in like a yeah, like ashared business park, because I
wanted somewhere to bringtechnicians that wasn't like a
home garage or, um, somethinglike that.
So I thought, hey, sharedoffice at least makes me have
some level of ethos.
And we hired who's still with ustoday, my comfort advisor, and
(15:08):
she's on track to sell over 2million this year, 2.5 million
in units.
She is an amazing person who'shelped this business grow and I
couldn't have done it withouther.
And so I remember, like,shortly after I hired her, I was
like, ooh, we got twotechnicians, we got a comfort
advisor, who's who's working,and like we're pricing correctly
now and she's generating saleswithout me having.
(15:31):
I was like this feels like agood first step.
And now that's where, like, Iattribute my good, my, my
turning point where it becamelike a good first step and
that's where, like I attributemy good, my turning point, where
it became like a really hardhustle of just me to like now me
having a partner who I couldwork with, who's also focused on
sales, and, yeah, that'sprobably the moment.
Speaker 3 (15:50):
That's awesome, just as a little tangent.
On the comfort advisor you knowthat's one of the challenges I
see a lot of times in HVAC,where it's just a sticking point
.
It's a stopping point, likepeople have a hard time finding
the right comfort advisor, theright team.
Any words of wisdom there andwhat made it work for you?
Speaker 1 (16:18):
good comfort advisor with such a small company.
But I think what I leaned intoand what I continued to lean
into, and what our business hasalways leaned into from the
early stages, is this vision,this goal, this dream that we
put forward and we're very openabout like, hey, we want to do a
fast, fast growing businesswith you know, we still we want
to hit 20 million by 2030.
Like, we have this, this dream,we have this goal, goal and
we're pushing forward.
And so I think that there'scertain individuals who see this
(16:41):
building opportunity and theysee somebody who is, you know,
competent, trying to push it andtrying to run with this vision,
and a lot of people cling on tothat.
So there's not much you canoffer very competent individuals
early on in terms of pay orpackage or whatever.
But one of the things that youcan do is you can really be
passionate about your projectand that shows through.
Speaker 3 (17:04):
Yeah, what I was thinking when you said that is
the one thing you can offer them, is you, as the owner or the
founder, the belief in you.
Because that's I know, I kindof was there in my career People
believe in you.
They see your energy, they seeyour passion and that's really
what they're signing up for.
Speaker 1 (17:19):
Yeah, exactly, they are signing up for the ability
to build something with somebodythat they think is going to go
far and who they like, and it'sbeen a very mutually beneficial
relationship since then.
Speaker 3 (17:30):
Yeah, you talked about potentially becoming a $20
million a year business in 2030and just kind of going down
this path of kind of making itas a business.
How much have you laid out thatplan?
Like, you know, I don't want toyou disclosed off the recording
your size.
Now I don't want to disclosethat unless you're comfortable,
but how like are you like, hey,I want to be at 12 million this
(17:53):
year, this, this, and I know howmany trucks I'll need and how
many technicians I'll need.
Like, how granular is that, ifat all?
Speaker 1 (17:59):
Yeah, we've we've run that extremely granular, really
.
We've run that down to the T ofhow many calls like cause.
It's all connected, right,right.
So we know how many calls weneed at what percentage of close
rate, which then turns into howmany service calls are running
and how our percent of closerate on maintenance contracts
and how many of those we need tosell as units and our average
unit sale price and how manypeople can run that at what
(18:21):
velocity, based on thepercentage of our revenue that's
generated in which months.
So, like we've, we've ran thisentire model, uh, multiple times
and so far we've grown over ahundred percent year over year,
which wasn't difficult in thebeginning because it was a seven
$800,000 business.
So seven to 1.5 is nothingcrazy.
First year, 1.5 to three was abig step, and then three to
(18:44):
five-ish, a little over fivethis year, and so we will not
hit the 100% mark this year, butwe'll still be in like the 60
to 80%.
So we're really excited aboutthat and what we are planning on
is the continuation of that.
Hey, we want to be 50 pluspercent and if we stick to that
50 plus percent of growth yearover year for the next five
(19:06):
years, we'll easily be at that20% mark or 20 million mark.
Speaker 3 (19:10):
Yeah, it gets pretty hard to be a hundred percent
when you're like a 10 millionyear company, unless there's
like some crazy dynamics goingon, exactly.
Speaker 1 (19:18):
And our market?
Once again, everybody says this, our market is particularly
difficult, more so than othermarkets, is my belief.
Easier than other markets, butharder than a lot of markets.
You know, we just have a lot ofhundred million dollar
companies that we have tocompete up against, who have
amazing purchasing power andhuge scale and big coffers.
So it doesn't make it difficultas we get bigger to actually
(19:41):
they start targeting us right.
It's no longer a you know,we're a small guy that flies
under the radar.
They're like oh, we're going tostart bidding their name now on
PPC and we're going to start,you know, actually viewing them
as competition.
So we've started to see some ofthat with some of the
medium-sized guys and eventuallywe'll have to fight off the
bigger teams here in the nearfuture.
(20:02):
You start to become a target.
Speaker 3 (20:05):
But as long as you're smaller, you probably can
service better and provide a lotbetter service.
Generally is what usuallyhappens.
Speaker 1 (20:13):
Yeah, we try.
I mean, there's some definitepillars of our business that we
lean on that, we believe, keepsus innovative as well as agile,
to be able to kind of go aroundthe big guys and what they have
to do.
View it like as a speedboatversus a cruise ship.
We can move faster and turnbetter.
Speaker 3 (20:30):
Yeah, Before we move on to the next thing I want to
talk with you about, are youopen to sharing those pillars,
the pillars of?
You said we have certainpillars that you kind of go by.
Are you open to sharing them?
Speaker 1 (20:42):
Yeah, so I mean, one of the huge pillars that we
really push on is the ability topay our employees better than
they would get paid elsewhere.
So we can't offer a lot ofthings, but what we can do is we
work really hard and this issuper granular.
So excuse, excuse me here, butlike we're able to focus on over
(21:06):
offshoring certain individualpositions in the office or that
expense dollar, and we canreallocate it, and so what we do
is reallocate a lot of thatmoney back into technician
positions, and so what we see isthat we are able to take
technicians who are reallyreally good, top tier
(21:26):
technicians, and then we're ableto take them away from their
companies, because as a smallcompany, we have recruiters who
are overseas you wouldn't knowit, but we have them and then
we're able to offshore otherpositions, like HR, generalist
or ARAP or all these kinds ofauxiliary roles, and we're able
to save a huge amount of moneyon that, and then pay the
(21:48):
technicians five, 10, $15 morean hour, and what you find is,
wow, like you pay someone $7 anhour more.
They're more likely totransition businesses, and so
that's one of the big pillarsthat we lean on to do it, and
that's another pillar kind ofhidden inside, is by offshoring
a lot of that labor we are ableto generate more positions at
(22:12):
the same rate.
So we can hire out of LatinAmerica, for example, at you
know three times their you knowmonthly wages there, or what it
would be their average monthlywages.
We can pay them three times asmuch of that.
They're living really reallywell and comfortably and so they
care a ton and they're comingout of their country with like
(22:33):
biomedical engineering degrees,coming out of their country with
like biomedical engineeringdegrees, looking for these roles
and they're picking up, youknow, systems project roles and
HR roles.
They're coming with HR master'sdegrees, they speak amazing
English, they're wonderfulpeople and long story short is
we can have those HR generalists, we can have ARAP, we can have
call center managers.
(22:54):
We can have all these positionswe wouldn't normally be able to
have.
But because we've gotten reallygood at being scrappy and
finding the right individualsoverseas, we're able to create
win-win situations for thebusiness, for our team and then
for those overseas individuals.
Speaker 3 (23:09):
So it sounds like you're in terms of the positions
you're using.
It sounds like maybe likeaccounting, back office
recruiting, did you say?
Speaker 1 (23:17):
HR Positions in HR.
Yeah, so like we keep our HRperson local, so we have one
local HR individual who managesthe team and then she gets
assistance from two HRgeneralists who work on
different projects, eitherrecruiting or payroll, or
in-house stuff like that.
Speaker 3 (23:35):
What about like CSR type roles?
I imagine those are.
Our entire CSR team is overseas.
Speaker 1 (23:39):
Yes, we have five individuals in inbound CSR
overseas.
We have one inside salespersonthat's overseas.
We have one outbounder who'soverseas, our install
coordinator who works with ourcomfort advisor he's overseas.
And so, like we can have thesepositions that we normally would
cost us, you know, an absolutearm and a leg.
(24:01):
But we can reduce that laboroverhead by going overseas, and
we've learned to do it really,really well.
Speaker 3 (24:07):
Oh, that's very cool.
I wanted to shift gears hereand talk about, like, good
advice and bad advice, and Ididn't talk about this too much,
so let me set it up.
You've now gotten into thewhole acquisition world where
and in fact, your podcastJackquisitions which I love, by
the way early, early stage ofyour podcast just starting out,
I think you're like 13 publishedepisodes and it's already a
(24:29):
great podcast.
Talk to me a little bit aboutfirst, talk about just how you
got into this acquisition space,and then I want to.
I've got a couple of questionsrelated to that.
Yeah, so it was a mix.
Speaker 1 (24:38):
There's a mix of reasons why.
The first and probably the mostimportant reason is when I
bought my business, it was aterrible deal, as you can
probably guess from the earlyside of this podcast.
If you've listened to the wholething, you'd see why it was a
bad deal.
Like I paid way too much.
I due diligences, you know Ididn't put in provisions I
(24:58):
should have put in, and it was amess, and so that's a big
portion of it.
The second portion is like goingthrough the acquisition process
is a very confusing process forsomeone who's never gone
through it.
When do I do LOI?
When do I do this?
How do I do this?
Who's my team?
And all of this I mean luckilyfor me, because the business I
(25:19):
purchased was so small, which isterrible, but because it was so
small it actually mitigated alot of my life risk, right.
So my payment is somethingwhere, if I really wanted to go
out and get a job, I probablycould have gotten a job and
covered that payment and mylifestyle.
So point being is that therewas a lot of things that I did
(25:39):
wrong that I want to help peoplenot do wrong.
That's the first part, and thenthe second part is there's a lot
of bad information out there,with other gurus and people who
are pushing this, and I mean Iwas on the other day and some
guy was like it takes 90 days tobuy a business, 30 days to find
the business and 60 days toclose.
I'm going, yeah, there is noway you're finding a good
(26:00):
business, especially local toyou, in 30 days, like especially
if you don't know anythingabout business buying, and so
there's just a lot of badinformation out there.
If you listen to the podcast,it might not make you happy,
because I'm really real aboutwhat the situation is.
You're personally guaranteeingyour financial livelihood on
(26:20):
this.
If you own a house, you'reputting that up on the market or
under a guarantee, but we getreally granular and it's a lot
of fun to be able to do that.
I bought four businesses now inthe last three years, so you
know I'm in the space.
I really enjoy acquisition,business acquisition, and so
that's a lot of the reason whywe started this.
(26:41):
We saw the huge need, mixedwith some issues with what's
currently out there, mixed with.
I have a personal passion forhelping people get this right,
because the difference betweenone or two items will make your
life significantly easier.
Post-close.
Speaker 3 (26:56):
Yeah, one of the things I see so much.
Jack prospects will reach outto me.
I'll have a meeting with themand I tell you this is 80% of
the time it's true.
Let's say they bought abusiness with $800K EBITDA or
cashflow or whatever you want tocall it, and they now have
owned the business for a yearand it's down to $300K or $200K
and they barely can service thedebt.
(27:17):
On the SBA loan, I had one cometo me about a couple of years
back.
They were worried about notbeing able to make the covenants
because they had a credit lineand they were kind of upside
down in terms of debt and theywere probably gonna get their
credit line pulled because theircovenants didn't work.
And I just get this a lot andit actually makes me really sad
because I feel like you know, ifthey had a little more help on
(27:41):
the front end someone like you,maybe someone like me and just
kind of running through thescenarios.
And another thing I see a lotis they want to make changes
right away, which I think is alittle bit dangerous because
they don't even reallyunderstand the business yet.
Like I had one come to me hewanted to add he added a service
department and on the surfaceit sounded good.
But he added several staff.
He didn't know how to run theservice department.
It ate up a bunch of his profitand cashflow and he was just
(28:05):
like he was in a bind.
He was like dude, I feel likeI'm going to go out of business
and so it's sad.
So I'm curious like what's yourthoughts around that?
Speaker 1 (28:12):
as you hear that, so my thoughts around that are
exactly what you're saying is Isee it all the time is a lot of
people are making really badchoices on the businesses that
they're buying with debt.
So that's the first big redflag.
It's like somebody comes to mesays, hey, jack, I got this
great hvac business that I'mbuying.
I've heard hvac is an amazingbusiness to buy.
(28:32):
I don't haven't listened to youyet, but I just heard your
story and you know I'm excited.
Said, well, how much of that'snew construction.
Because what a lot of peopledon't understand is there's
these subsects inside the tradesof like, yes, it's HVAC but
it's industrial, or yes, it'sHVAC but it's commercial, or yes
, it's commercial multifamily,or it's commercial new
construction, and so there's allthese little sub areas.
(28:59):
They hear that HVAC is great,which it is, but they don't
understand kind of the nuance ofthe business itself.
And so what it ends upgenerating is somebody who goes
in and buys a new constructionbusiness realizes, oh, in a
small downturn, now I can'tafford this debt.
And then, like you said, theytry to start up a service line
because, oh, now they understand.
But the problem is that whenyou start that service line they
(29:21):
don't understand that, hey,service people and installers
are not the same.
They don't understand the salesprocess and the sales cycle,
and so a lot of that, to get offmy soapbox is driving it back
to like, hey, let's talk aboutbuying a business and what you
need to be looking for and fullyunderstanding home service
(29:43):
business, acquisitions and whatthat looks like on the whole.
Let's look at their marketing.
Let's look at you know what istheir gross margin?
Who's their customer, theirservice, is it B2B, b2c, is a
B2B B2C?
And then, lastly, what?
The biggest one that I find toanswer your question in a long
roundabout way, tyler, is whatis your specialty as the buyer?
So, are you a CFO coming into abusiness or are you like me and
(30:10):
you have operational experienceunderstanding?
Hey, I can do electricaltroubleshooting.
So when I started, wheneverybody quit, I realized that
half of an HVAC unit issues areall electrical troubleshooting.
A capacitor is a capacitor,contactor is a contactor.
You know you have to checkincoming voltage and that'll
solve 50% of your problems.
(30:31):
Now I just need to learnrefrigeration theory.
But that's me, and so buying asmall business for me, where
that specific thing happened,wasn't a deal killer, whereas if
somebody who had a, you know, amarketing background, bought
that same business.
They would have never been ableto to do that.
And vice versa.
(30:52):
Like if I bought a giantbusiness, I don't know if I
would have been able tounderstand the CFO role or the
finance role or the marketingrole or all these different
differential roles kind of onthe bigger businesses as quickly
as I needed to actually keepthat business running steady
state.
So that's where, you see, thedrop is because people don't
understand their skill set needsto fit exactly into the
(31:15):
business and the size thatthey're buying.
Speaker 3 (31:17):
Yeah, and this leads into my next question what do
you think is, like, the biggestmyth when it comes to
acquisitions?
Is there something commonly outthere that's just a myth.
It's just not true.
Speaker 1 (31:28):
Yeah, it's exactly that and I've talked about that
quite a bit.
It's that there is a specificsize business that you need to
buy.
So a lot of times what we seeis like people are cosplaying
private equity, like they seethe private equity model and
they go private equity is onlybuying $1 million EBITDA
business isn't up.
So I must need to do that.
(31:48):
But the answer is maybe Like,if your skill set is private
equity and you understandmanagement, leadership, those
kind of items and you have thatmoney to do it, yeah, that's
probably where you should go.
You should not buy a very smallbusiness under 3 million where
the owner goes into the fieldregularly, Like you're not going
(32:09):
to be able to do anything there.
And then vice versa, the samething.
Like if you understand, youknow operations, you should
focus on a business that needsoperations and not go buy
something bigger that alreadyhas some because your, your
skill set is not going to do asmuch value while you're still
learning the industry and thebusiness itself.
Speaker 3 (32:28):
That's where you see, like the people who make
decisions because they thinkthat they need to make decisions
, and it's like no, you don't,you need to just operate steady
state Right, I think there'salso kind of a myth and feel
free to correct me if you see itdifferently where I think
people buy a business and theygo oh well, I'll just hire an
operator, or I'll just hire a GMor whatever, and you know, I
(32:49):
don't really need to know thedetails.
Or you know, there's someonethat works there that has a
license, I don't really need it,or whatever the case is, I
think that's kind of a littlebit of a myth too.
How do you feel about that?
Speaker 1 (33:00):
100% a myth.
Yeah, there's very, very rareinstances where putting in an
operator at any point in yourbusiness, even as a successful
business owner, generates abetter business.
And that's just because, hey,nobody's going to care about
your debt and your PG and yourbusiness like you will, Because
if they get fired they can goget another job really pretty
(33:21):
fairly easily, especially in thetrades right now.
But if they do that, that meansthat they've sunk your business
into a giant hole that now youneed to crawl out of.
So that's a huge myth.
That's a big one that I preacha lot.
The only other myths that I seegenerally are.
One of my favorites is there'sno marketing.
It's a huge opportunity which,yes, technically big opportunity
(33:42):
to add marketing to yourbusiness, but you're
undervaluing the amount of timeand energy and capital it takes
to actually get a marketingsystem and program running.
It takes I was talking toSweetwater Plumbing out in North
Carolina and he estimated thathe spent $230,000 on trying to
get his marketing so that itactually ROI'd, and that's I
(34:05):
mean I'd say probably I'm in thehundreds of thousands of
dollars in marketing spend tofind channels that work properly
, and so it's not just like thislever you pull and then
marketing come, you put up awebsite and all of a sudden your
business skyrockets.
It's like hey, there's about athousand steps you could take
and a lot of them are missteps.
So, making sure that you buysomething with the systems in
(34:27):
place already that are alreadyworking and already have showing
fruit, that's a much betterbusiness than not, Right, right.
Speaker 3 (34:35):
Good stuff Another big one.
Speaker 1 (34:36):
Yeah, that's a huge one.
Well, I think I'm not saying Iknow I'm going to keep going on
this soapbox, but like I thinkthat also applies to everything.
Right, and that applies to hey,their trucks are all you know,
they don't have a maintenanceprogram for their fleet vehicles
.
We just need to do that,they'll have less downtime and
boom, it's easy.
Well, none of it is easy.
So every system that you thinkis an opportunity, probably
(34:59):
technically is an opportunity,but not without a huge cost
expenditure to get there.
So that's like I want that toextrapolate to every portion of
the small business that you'rebuying is understanding that
anything that you think is a lowhanging fruit probably not.
So don't go changing thingsbecause you're going to have a
huge expenditure and then, likeyou said, tyler, they're going
(35:21):
to then see a huge dip inrevenue and or net just because
they thought that something wasan opportunity and they could
tackle it and it was a muchbigger fish.
Speaker 3 (35:31):
Yeah, that's one of my biggest challenges is I get
people come to me and I don'twant to be the negative finance
guy, but I want to keep itpractical.
And you know people, whenthey're buying something,
they're really excited, they'rethe marketing one is the classic
one, it's all.
I just need a little bit ofmarketing budget and you know I
can grow this by 25% and I wishit were that easy, like you know
, I wish you know it's just likeyou and me both.
(35:57):
It's a fuss.
You can just turn it on and and, oh my gosh, all this water
comes out.
It just it never works out Likewe.
You know I always just try tocoach people, like you know.
You know it sounds good,everything you're saying is
right, but it never works outlike we think it does.
And if you don't havecontingency building, there's a
high probability you're going toget caught off guard.
Yeah, yeah, that's a brilliantway to put it.
Yeah, okay, I want to talk aboutand I think this is appropriate
(36:18):
with what we were just talkingabout.
You know, a lot of times,business owners the first thing
they want is hey, I want to growfast, and what's my first step?
Like, how do I grow fast.
So when I say something like toyou, what comes to mind in
terms of what are some steps youshould take and it doesn't
necessarily have to be aroundfast growth, but that's what I
hear often what do you think aresteps that?
Is it CSR related, or what doyou think they should be doing
(36:38):
as first steps?
Speaker 1 (36:40):
So if you wanted to grow fast.
There's really two keys that Ilook at, and the first one is no
matter what type of businessyou're running, it's to hire a
sales individual.
Like I said, my turning pointwas a CA and I think that's
because when you have somebodyfocused directly on generating
revenue and high amounts ofrevenue, then that's their goal,
is they're going to generatehigh amounts of revenue,
(37:02):
especially if they're oncommission structure.
So they have two options.
A is that they don't work out,which we had somebody like that.
He ran for two months, didn'twork out, got rid of him because
he was a terrible CA, and thenwe hired Elena, who's now our CA
, and she's amazing.
She was able to drive hugeamounts of revenue really
quickly.
But when you have a salesdedicated person, you're going
(37:24):
to see your dedicated salesstream increase just because
there's somebody solely focusedon that.
So that's the first high growthmetric is like I don't know if
it's a comfort advisor or asalesperson in plumbing or a B2B
person who's gonna go and knockdoors at plumbing companies to
find some kind of business, buthaving a dedicated salesperson
(37:46):
focused solely on generatingsales is sounds silly, but
that's one of the huge ways.
It's a huge one.
The second one is, as we spokeabout earlier, is acquisitions.
So we've done four in the lastthree years.
Acquisitions are a great butextremely, extremely risky and
dirty way for quick growth.
So we've gotten very good at it.
(38:07):
But it can be very difficult andcan be chaotic, right, because
you are slamming togethersystems, you're slamming
together teams and people and atthe end of the day, if you're
able to do it well or you getlucky enough and you're adding,
you know, a million, 2 million,3 million, 5 million to your top
(38:27):
line, and we always say, hey,you know the easy way we do the
breaking $5 million workshop,the easiest way and the way we
do the breaking $5 millionworkshop.
The easiest way and the fastestway to get to $5 million in
revenue is to buy it.
Like, if you can go outtomorrow and buy a $5 million
business, you avoid all theheadaches of the one to $5
million and now you have a $5million shop.
So that's going to be one ofthe quickest ways to growth.
(38:50):
It is not easy, it is notnecessarily fun and it can cause
lots of chaos in your businessand it can actually hurt your
business more than it helps itif you don't do it correctly.
But if you're able to do itcorrectly, I mean easily, the
fastest way.
Speaker 3 (39:05):
Yeah, the other thing that I love about acquisitions
is it's so common for us to getstuck at a certain level,
whether that be 3 million, 5million, 7 million, it just
happens.
I mean, I'll never forget wewere stuck at 15 million and it
was so frustrating because youtake a step forward and then you
take two steps back and there'slike, oh, we're back at 15
million again and acquisitionsare one way to your point.
(39:27):
Like you just get to 5 million,like it catapults you and you
acquire talent.
If, let's say, you don't havethat comfort advisor and you're
looking at an acquisition ofsomeone that does have a really
stable, long-term person, thatcould be a way to infuse talent
in addition to sales 100%.
Speaker 1 (39:45):
Yeah, I mean, you hit the nail on the head.
We call them step changes.
There's a step change at three.
There's a step change at five.
There's a step change at three.
There's a step change at five.
There's a step change between10 and 20, depending on your
business and it's just like youhave to reinvest so much into
your business to grow past acertain point, whether that be
managers, upper upper levelservice managers, c-suite team,
whatever the case may be, to getthere.
(40:06):
There's so much investment thatit is very difficult at certain
points to blast through thosestep changes, and one of the
easy and quick ways to do it isto just buy your way through.
Speaker 3 (40:16):
Yeah, that's good stuff.
Hey, and just wrapping up here,I've got one last thing I want
to go over with you.
What is your looking ahead?
Look like Like, where do youwant to be?
I mean, you mentioned the 20million.
That's what are we?
It's really not that far outactually.
It's really not that far outactually 2030.
Four years, yeah, that's not acrazy amount of time.
So that's kind of your real biglooking ahead.
Is there anything else you'reworking on or you're thinking
(40:37):
about?
Speaker 1 (40:37):
I mean, we are always working on that and we have
been doing an amazing job thisyear, so I'm super proud of my
team.
This is the first year where weare not hindered by leads, so
we have an abundance of leads,too much work.
We are hindered by talent, andso we are taking those changes
(41:01):
in our business to hirerecruiters and make sure that
next year we don't have talentissues and then we will have
lead issues again because we'llhave too many people.
So we'll go back and forth, butat least in the upward
direction.
And so that be all being saidis, yeah, 20 million by 2030.
That's the goal.
We're on track.
I think we have a valid path toget there.
We have some acquisitions in ourpipeline that we are always
(41:22):
working on trying to close, tobuy our way quicker to there.
And then, you know, on the side, we just continuing to network
and meet people and runacquisitions and help people
with acquisitions as a passionproject, continue working with
owned and operated to helppeople operate.
We have a workshop in two weeks, so that's always fun.
(41:44):
We get to go up and talk tobusiness owners and that's a
great time.
And then quick staffers wetalked about staffing a lot.
I run a staffing agency on theside because I was able to take
all my SOPs and scripts and wetalked about John.
I could take a lot of John'sSOPs and scripts and I get to
steal them, rebuild them forquick staffers and then create
(42:04):
some really nice frameworks forpeople and help people out with
exactly what I'm doing and whathe's doing, which is overseas
talent.
Speaker 3 (42:10):
That's really cool.
You had mentioned kind of alittle bit in terms of like your
growth plan and potentiallyacquiring.
To get to that, Do you have anyintensive like intentions of
adding like an apprenticeprogram?
A lot of times people I'll talkoff here, especially when they
start getting into that $20million range they'll create an
in-house type of techniciantraining plan where they'll just
(42:31):
hire, you know, apprentices andgrow them right up.
Speaker 1 (42:34):
Yeah, we have a pseudo version of that.
Okay, so, like we do generally,we hire one green hand at a
time and then we train them forabout a year.
So we have two of our graduatesthat run in our service
department right now.
It's one of the best ways thatwe find to get really high
skilled technicians.
So it's one of the best waysthat we find to get really high
skilled technicians, but wedon't run it anywhere near some
(42:54):
of the big companies that havelike full 60 day, you know,
apprentice courses.
We just we understand thatthat's a great way to bring on
great talent, and so we look fora very specific thing when we
are going through that processand when we find it, we'll bring
them on if we have an opening.
Speaker 3 (43:10):
Yeah, that's awesome, that's cool.
Okay, so I just want to wrap uphere.
A lot of really good stuff youjust shared, I think, a lot of
takeaways for me.
I would say one was just yourwhole story of like having your
staff quit and starting fromground zero.
It sounded like you kept yourcomposure and it was pretty cool
how you were able to translateyour electrical background to
(43:31):
really be able to service 50% ofthe type of things you were
going to run across anyway,which I think is a great
contingency plan, even thoughyou didn't necessarily plan for
that.
So there was just a lot of goldnuggets.
I loved your practicalness interms of acquiring and myths.
A lot of good stuff In terms oflinks if people wanted to reach
out to you.
You've got the HVAC Jack.
(43:52):
Is your Twitter handle Ownedand operated?
We mentioned John Wilson'spodcast.
You got it.
Are you still co-hosting onthat?
I haven't listened to a recentone.
Speaker 1 (44:01):
Yeah.
So I mean I still jump in fromtime to time.
Less direct co-hosting on aweekly basis and more, you know,
like a monthly basis, got it so?
So Jackquisitions takes up mostof my time, which is
jackquisitionscom, yeahjackquisitionscom, and then
Jackson L Carr with two R's.
Speaker 3 (44:16):
Jackson L Carr is your LinkedIn.
If anybody wants to reach out,I'll put these in the show notes
at Profit and Grit.
Awesome podcast, awesome wisdom.
I can't thank you enough forbeing on here.
Speaker 1 (44:26):
Yeah, of course.
Thanks, tyler, I reallyappreciate it.
It's been fun.
Thanks, jack.
Speaker 3 (44:31):
Huge shout out to Jack and a thanks for sharing
the kind of lessons that you canonly learn the hard way.
From losing his whole teambefore day one to building a
multi-million dollar shop withsmart hiring and sharper
decision making.
This was literally amasterclass in staying in the
fight.
So if your business is growingbut the numbers don't make sense
(44:56):
or maybe the cash isn't showingup the way it should, that's
exactly what I do.
I help trade business ownersget their arms around the
financial side so they can scalewithout stress, so they can
scale confidently, so they canscale without thinking like, hey
, am I doing the right things?
If that sounds like where you'reat, please grab a free intro
(45:17):
session with me atcfomadeeasycom.
Once again, that'scfomadeeasycom.
No pressure in intro meeting.
We just have a cool chat topeople talking about what's
working, what needs fixing, andjust see where that takes us.
Talking about what's working,what needs fixing, and just see
where that takes us.
As always.
Thanks so much for listeningand I'm excited about the future
(45:38):
episodes here.
I've got so many killer guestslined up.
I just can't wait for you tohear them.
I'll catch you next week, takecare, thank you.
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