John Wilson welcome to acquiring minds thanks for having me on this is a long time coming well I was just going to say back in 2021 John when I first got into this world yeah you were one of the very first names that I learned in the SMB Twitter sphere so you were a big deal then two and a half years later you're a bigger deal still so I am thrilled to finally get you get you in the seat yeah no this is fun I think um I sort of disappeared off Twitter and I'm sure we'll break into why and you know teaser it's because acquiring three companies in quadrupling in five and a half months while talking about it publicly on Twitter is exhausting so one of those things has to give so it was my Twitter presence well so I guess things are are slow at the Wilson companies because you've you've you've come back hard in the last what six months yeah yeah yeah it not slow um we just we got over the hump okay yeah we're hear about this hump I'm sure we're going to hear all about it well a lot of people listening will at least know you by name if not something your story um but we're gonna we're going to do your story in full you own Wilson companies a home services business uh and we're going to spend a lot of our conversation on that tonight but you're also something of a media entrepreneur podcast of your own called owned and operated a successful podcast uh and a conference hold C con which my audience will have heard of your partner in that Kelsey larck has been on the pot a couple times so if we have time we'll we'll get to those Ventures as well but let's turn our attention to the the main event Wilson companies John so just to set the stage give us a sense of when you became owner Fair way to put it yeah when you when you became owner owner how big was Wilson companies in revenue and employees today in January last day of January 2024 how big is it revenue and employes yeah so like quick hits uh when I took over in 2016 we were doing about a million dollar in Revenue with about eight team members um fast forward today uh we're seven and you know s years and 3 or 4 months in uh and I have about4 42 employees on the team and our budget is 26 million for this year incredible the the sort of um I I said this in our company slack earlier today so today was a big day it's kind of funny that that we're talking today because uh it's a big day for for a few reasons one um we set an all-time record for any month ever uh so January 2024 I'm excited to break it again but this was a record month for us and it was also uh I when you run a business long enough you you hit Milestones right you hit Milestones along the way and one of you know my one of my big Milestones was my first full year of ownership which was 2017 and in 2017 we had maybe 12 or 13 team members and I did $1.7 million which felt like such a big number uh to me and today in January of 24 we did more in Revenue this month than I did in that entire year of of my first year of ownership so that's um I don't really there's I'm feeling very nostalgic about a lot of things today because that was such a anytime we've had these like holy smokes you know I just did more Revenue in a in a week than I used to do in a month or yeah nowadays it's more Revenue in a day than we used to do in a month which is like just blow blowing my mind um but today was especially fun because it was a record month we did more in a month than we did in the entire year of 2017 and um and I'm about to make my final payment for the deal that changed my life in 2018 so like my final payment is due tomorrow and the seller is going to walk through the business and and see what's happened in the six years since I bought his company so uh a fun day a a fun day for all of us here awesome lucky us congratulations that's that's really cool on both on both fronts on the revenue uh record setting for the month and on your final payment tomorrow for the deal that changed your life which we're we we'll have to hear about that one yeah we're here to talk about it well we're not going to be able to condense seven years into this time especially also because I I want to hear you Riff on a lot of topics that are not directly your story so we're going to try to do your story uh as much of it as we can in kind of the first half and then leave the second half for topics themes thoughts yeah um so let's do so let's do your story though so yeah 2017 your first full year of ownership take us back there how did you get in what does that mean how did you get into this business give us a story yeah so um I own my family's third generation Plumbing an hpac company uh my grandfather Ralph started it in 19 58 uh that's incorporation date he had actually run it a few years prior he came back from the war and he was you know looking for some stuff to do did it for about a decade made it a company um and it started off in my grandparents house you know that I think there's a picture of my grandmother picking up the phone uh at their kitchen table and that was the plumbing company um and it ran really pretty small and it it it feels strange uh to abbreviate such a long period of time um but you the company was it ran from 1958 to 1985 when my dad bought it and it was still roughly the same size so you know one person um in the office a couple people in the field uh and you know my grandfather the owner and then uh my my dad Paul took over and he ran it from 1985 to 2016 uh when I took it over and you know it had grown from three or four people to S to eight so um there were obviously some momentous things that happened in that 50-year period but it always feels very weird to abbreviate it but it's really most of the company it grew very slowly uh we stayed in the same building we just moved out of that building six months ago uh so we've been in that building for 63 years 64 years and um and things really started moving in the early uh you know 2010 2012 uh so I I entered the business and we started moving uh forward kind of rapidly okay so do you feel like you were growing up in and around this business was it in the back you know were you working weekends summer jobs there or was it just kind of in the background yeah so I I'm I'm always fascinated to know what other people who grew up with family businesses think about their family business but the one thing I've tended to notice is no one thinks that they're that they're going to work inside the family business uh so I remember I talked to Justin reader a couple years ago and he works in his family business and he was he was embarrassed about it he's like oh my gosh I I can't believe I ended up in my family business and I'm like bro like you're you're killing it like you're you're you know this is a win like any any way you look at this this is a win and I think um I think it feels like you didn't do your own well you didn't you didn't do your own thing right uh so for most of my life growing up I I did work in the business I started working at about 10: um just in in summer my dad would pay me five bucks a day and I would you know clean up trash and put away Parts in the warehouse and uh I would go with him on estimates and was exposed to to the business um but I really never thought that I would take it over and I honestly fought it pretty hard all the way up until I was 21 or 22 uh I did take over the business very young that's a core part of the the story but um for a long time I I fought that so you know graduating high school I I went to college initially for graphic design and I ended up I ended up getting uh sick and I wasn't able to complete that program so I you know I needed to be able to work flexibly I had to be able to take care of my health so I I my father allowed me to work uh flexibly while I dealt with that which took a couple years and by that point I was very exposed to the trades so um by 16117 I was able to repipe a small home uh replace a furnace by 1718 I I I was a you know a capable uh field professional uh when I was before 20 um so I I worked flexibly for a few years I I attempted to go back to school a few more times I went for HVAC once and then I uh in my early 20s I went back to school for accounting and I did about 2 and a half years of the program um which landed me around 23 years old uh and that was that's where my college stopped uh so I I got married at 23 and I had actually taken over running the business at 23 and I was going to school full-time at night and uh I I basically thought that one of those three things had to give and it was school okay uh and so wait so you're 23 is this now 2016 this um this would have been 2014 so you kind of took it over you were you facto leader but you didn't officially buy it right so I was the service manager um sort of ops manager for a while you know it's eight people so it wasn't it wasn't that big or complicated um but uh at around 23 we started really talking about me buying into the business which um is is obviously a ridiculous conversation uh to have so like to address the elephant in the room I don't think think that I'm brilliant and I don't think that I'm impressive uh by me being young and this stuff happening I think that my dad was my dad and I have a 40 some year age Gap and he was needing to find an exit for this business that was a third generation business and I was present uh I was wanting it by that point at 23 I I had you know two years of accounting I I understood enough to be dangerous and understood what the opportunity was in front of me and um so he entertained a conversation that most people would obviously not entertain like a a 23-year-old is obviously a very uh young person so I wasn't anything special it it was a series of circumstances that I had nothing to do with that gave me an opportunity that I probably didn't deserve well on the other hand um you're his son and one of the whole one of the whole patterns in our world is that there's all these baby boomers who are selling to to we Searchers to us Searchers because they're children don't want the business so there was probably a part of him that was happy that it was going to stay in the family when you talked about other people who don't want to be don't want to stay in their family business run the other way so just to be clear you were like that and then eventually came around to it just gradually just more exposure and eventually like what was there TI point or was it just this kind of gradual thing and eventually you would said you would said I understood the opportunity in front of me did did something crystallize about the potential here or what was it so um I am a leader or I'm maybe the better way to say this is I'm in the position that I am because nobody else took it uh not because I not potentially not because I'm the right person I mean now I have a track record that shows that I probably was but um that's still new to me uh so you know I was 23 years old and I was freshly married and I was working still full-time as a technician and feeling like I was trapped is the best way to is the best way to put that so um I was a technician in a very small business there was no upward Mobility inside that business because the you know there's 8 to 10 people and um and that was sort of it um and I wasn't feeling particularly stretched so I I'm a curious person I uh sort of crave a challenge and in most things that I do I like to be challenged I want to be intellectually stimulated and I didn't feel that so when I was 22 and 23 um I was looking for an exit out of the family business uh and I felt even more trapped because I had yet to graduate college so I you know I went back to accounting uh school not to take over my family business but with an expectation that I would leave the family business and go be an accountant somewhere um so the opportunity in front of me was sort of like that was the only opportunity that made sense to me at that time was I felt trapped by the choices that were in and out of my control you know I had some medical stuff that wasn't totally in my control but the other decisions that came after that were and I didn't feel challenged and we started I started uh going to school and and understanding hey maybe I can do some of what I'm learning about and reading about here in this business uh so that is when it started to crystallize as maybe this could work but it it sort of came from a point of desperation honestly well how interesting that um yeah you kind of saw it as the only path to do something that you thought checked the boxes that you wanted to check was to actually rather than run away from the business run toward it that ended up being the the solving for the things you wanted was that I thought that I was on my way out and by moving in that direction I found my way in well it's also it's also I think um probably people in family businesses who do stay in family businesses eventually uh learn this or whatever the way you quote Do Your Own Thing within a family business is you make it your own so now this business today sure you weren't the founder but you for what it is today is a completely different animal which we're about to hear about than it was before so you probably I imagine feel like you sure as hell have done your own thing yes I I I feel a lot more confident now than I do than I did you know seven years ago in uh in in what I could do I and I was young very young yeah did you have any hesitation now kind of putting on our Searcher hats here did you have any hesitation that the business um had grown so little you know it it it it was basically the same size for 30 years under Ralph your grandfather's tenure and then it had doubled but just to seven or eight people under your under your father were you did you think it would you maybe you'd get it to 16 people if you were lucky sort of thing or were you like did you see the potential to do what you've done with it that that early did you see that um I went into it my dad and I were texting about this actually earlier because I I informed him of the win today that hey you know we we we did more Revenue this month than 2017 dad that's crazy uh so we were texting about that and we were reflecting back on those conversations in in text tonight and I was I was very deliberate at the time uh so you had two questions one was I cautious that it hadn't grown no because I knew why it hadn't grown and it's it's not a mystery I'm very happy to break it down um that really didn't bother me at all cuz I just assumed that was going to be able to do it and I ended up being right but obviously that could have gone the other way um and two I went into it with the intention of making the largest licensed Home Service Company in Northeast Ohio which in those past seven years I I have done we have succeeded at that goal but um I went into it with that goal like that that was what I was going to do so he and I were texting about that tonight and and it was just sort of like wow I what what a journey um like we did it you know when I was 24 or 25 and we were talking about acquiring this business like that was it I I said I would do it and I did it and that's crazy yeah I love it I love it I love your humility it's it's it's it's great um by the way were you so family business graphic design uh Dian in graphic design then in accounting were you a natural entrepreneur was that something that was ever written in the stars no not in any way I am uh fiercely independent and I have been like that for a very long time um so I saw I've really never trusted anyone's Authority besides my own is the best way to put that like I I called my teachers by their first name because I felt that if they were calling me by their first name then that's how that should work um I you know bought my own first car with my own money at 15 I made sure I had my own cell phone planed at 14 or 15 I I wanted to be in control of my own stuff MH and money was the conduit to do that so I don't think that I was uh you I wasn't like launching pinball businesses or lemonade stands or any of those stories that you hear I just really did not trust anybody else to take care of me other than me and that seems to have worked uh but it it was much more of a I need to be independent and need to be self-sufficient than I need to launch a business interesting I've never heard that quality uh kind of before I'm not sure if it has a name I guess the need to control stubborness um well you can be stubborn and not have be so indep I mean it's a combination of yeah I think Independence is the best way for because it's not it's not control like I run um you I have to delegate a lot that's a core part of my responsibilities and I have no issue doing that um I would have a big issue if someone owned a majority of the company and I had to listen to them yep like I I want to be in the driver's seat and I wanted to be in the driver's seat since I was probably born so like I I I struggle with the authority piece and like who's making who's calling the shots cuz I ultimately believe that I'm going to call the best shots mhm did I say humility earlier you know it's I'm a mix I'm a mix of both I'm confident where I can be uh but I also realized that so much of this was luck and it just was okay John well like I said we're not going to be able to go year by year here um so I'm going to need you to guide me at the important big hits we can do the big hit the big hits sounds like this first acquisition well well you I'll let you tell us so what's the first big hit yeah so there's there's probably five big hits career defining hits uh for me so um not counting acquiring uh my family's business so uh the second one was in February of 2018 we're on the eve of that anniversary tonight as we record uh so that business was a um in in late 2017 I was frustrated by the lack of growth inside the company we had achieved $1.7 million of Revenue and that is very tough to feed two owners on and again uh I was deliberate that if I was going to join and do this like we were going to grow a large company so who was the second owner still your dad or my father uh maintained an interest yeah yep um so I started sending letters uh someone someone in my industry locally bought another business uh competitor and um obviously I kind of knew that was possible cuz I just had bought my family's company so it wasn't like a foreign concept to me it was a foreign concept to me that you could grow by Smashing them together brand new I I had never heard of that before so um I was interested I sought to figure it out and I just sent a bunch of letters uh I'm sure I read a book or a Blog I wasn't very informed about how to do it uh we basically figured it out um but I sent about a 100 letters to uh companies that I roughly knew that I could acquire because they were very small uh so we were 1.7 in sales at the end of 2017 and we had four or five companies respond to those letters and one of those companies was a business that we had made contact with a few years prior that reached out saying that they would like to be acquired we didn't close the deal and I don't know why um but after six or S months we we closed that deal in early 2018 uh so they had you know we had 13 14 people at the time they had maybe 10 um they were doing 750,000 of Revenue and dropping and they had lost money every year since 2009 uh they went bankrupt in 2009 and they had been surviving off of a line of credit as they attempted to turn the business around into a service organization because it used to be new construction so uh that was a that was a pivotal moment for me for a few reasons one I was 26 and I had obviously no idea what I was doing um the business doubled overnight like stroke of a check and the business doubled uh which was I just remember that feeling of like oh my God like this is crazy you you can just do you can just do this and acquire your way to growth um the team size doubled so I went from 14 people that I'd like basically grown up with uh they'd all been there for a very long time they knew me they they got it to maning an outside party of 10 people that were all twice my age and uh on top of that the business was going bankrupt so we had to figure out how to turn it around so it didn't sync the whole ship um so What followed was uh a difficult year John why did you buy that business versus a couple of the others that had responded to your letters because I could afford it I could afford it so it was it was given it's that it was distressed it was cheap cheap yeah it was $110,000 so I changed my life for $110,000 so um we ended up signing a six-year seller note uh the final payment is tomorrow and uh I gave 20 or 30 grand down which was probably 80% of the cash that I had on hand so we doubled the business overnight learned how to manage a team of 27 people or so uh off the rip the business instead of being 1.7 uh ended up closing 2018 at 2.9 which was a pretty big jump and we were excited about it so uh that was our it was a big exposure cuz we I got two managers out of it so suddenly I had managers that had never been a thing before and I had to figure out how to work with managers um we jumped on service Titan shortly before that so we had to figure out how to actually measure things how like what the heck are we actually doing here um about a day or two into the acquisition we the schedule was empty like there was nothing on the board so we had to figure out how to mark it so I didn't go bankrupt uh so we had to figure that out in February of 2018 and um we figured out how to turn a new construction company around which was a skill that we've now used several times uh but all of that was learned in that second acquisition so it it was a pivotal moment of my career like when I think about the the moment that took me from the small business owner to the I can this can become something real it was that acquis position yeah yeah Prof it was our first but it also professionalized it it added managers we had to figure out how to build teams we had to figure out how to Market we had to suddenly figure out entirely new capabilities that we had never had and uh it forced us to level up so in you know 2017 we did 1.7 and 2018 we did 2.9 and in uh 2020 we did 3.8 or 3.9 so we added another million two years back to back um as we learned those new skills and how to run a larger company and through the pain of that year that your first acquisition and all the things that you described that came with it um were there it was hard but were there low moments were there fetal position moments or did it not get that bad oh yeah no no Panic yes oh yes um so a year it was a year after and um I thought we were going to go bankrupt in early 2019 so the the first year of an acquisition is like a you know a lot and now you know I know the steps so I I I know the stages of grief as as you'd think of them now um you know the those first three months are like honeymoon where you're like you're getting to know everybody you're figing out the systems figing out the customers training all that stuff second six months you start to work on performance uh which we did um but we never we never killed the new construction side of the business and this was my first exposure to new construction I didn't understand it uh all I saw was really big tickets so like wow I I we just did $100,000 month uh in just Plumbing install like that's a big deal that's crazy and um I didn't understand what that looked like for cash flow that was a brand new thing for me um and by the way it's bad um I didn't understand what happens when somebody doesn't want to pay you 100 Grand we found out but um that was new so we learned a lot about the other side of the industry this low margin uh highly cyclical section of the industry so a year into our acquisition the business was floundering as we tried to deal with the new construction so we had merged the locations by that point we had prepped to merge the brands and we were stuck with this new construction team and it was the first time not the last time but the first time that I've ever had to do Mass layoffs uh so early 2019 fetal position Mass layoffs we laid about 20 or 30% of the team go oh W yep okay um well that that first hit ended badly but but but was transformative uh as you said your your first taste of acquisition open your eyes professionalize the business okay what's the next milestone in this journey yeah next Milestone was late 2019 so 2019 became a recovery year um which should I think happen if you're you know if you're an operator and you are acquiring to grow um you can run too fast and you need to digest like the organization has to figure itself out so 2019 was that year for us so we figured ourselves out and at the end of 2019 we joined a group called it was SGI it now it's called certain path and that was the next big thing uh for us so we you know 3.8 $3.9 million of total revenue uh Team size was maybe 30 27 somewhere in there and um what that gave to us was a model uh I still wasn't educated um I I had like somewhat of an idea of what I was doing during my day-to-day life but uh it really felt like I was grasping it straws and some things worked and some things didn't uh so what certain path did was it gave us a a model to follow like hey here's an or chart that your business should roughly look like at this size this size and this size here's a rough idea of what pricing can and should look like here's a here's a few examples of how to structure your company here's how to do your handbook um so this was the next level of professionalization uh but instead of like here's how to work with managers it's here's how to run your business so it gave us a sort of a business in a box without it being a franchise um and John so certain path is it like a a nextar in some of these that basically give you the Playbook it's a industry tell people in 30 seconds what what it is you pay it's a membership they give you Playbook yeah that I mean you just did it in three seconds I mean that is what it is it it's the Playbook uh now at certain path does it for smaller companies certain path uh was started with this concept of let's get the owner out of the truck um so their average company size is small uh whereas nextar their average company size is much larger I I believe you have have I think they've relaxed the rules at nextar but you used to have to be 5 or 7 million at a minimum to even apply to being nextar uh whereas SGI would take someone at 200,000 um and and these are industry what industries do these Plumbing HC electric and Roofing I believe they both do Roofing okay all right yep but yeah so that changed our business and that figured that helped us figure ourselves out and in that time the owner uh who came from the business I bought in 2018 he was our ops manager so I actually kept him on for a year and a half and he was getting ready to retire and I had to hire someone to implement this business in a box so I hired my uh then ops manager now coo and president uh Brandon nairo and uh he he came in and helped me Implement certain path or SGI into our business so that we could take the company to the next level um so that was sort of a two-fold big hit because one Brandon joined the team uh which obviously has been instrumental in in what we've done and two we put a lot more process and uh systems in place the um certain path in like um like an EOS is it kind of like an industry specific EOS or am I comparing apples oranges apples and oranges so EOS is a way you meet it's a way you talk it's a way you communicate organization wide uh we we are on EOS uh this is really A playbook the best way to think about nextstar or uh certain path is this is a franchise without a franchise like that's it so when you sign up for a group like this which most Industries have one and I highly recommend everyone do it CU it really it gives you it gives you The Next Step which like um that is really hard to figure out what the next step is uh because there's not like a the I haven't found one but there's not like a playbook out there on how to do what I've done uh like there's not like here's how you go from a million to 100 million in 10 years like I haven't found one yet um if you if you know of one please send in my way um but it helps you figure out what's next and it gives you something to constantly work on and improve and iterate and Implement into your business uh so that's what we liked about it and it also uh one of the reasons I liked it so much is I was working with managers and I have I think I'm better now than I was 5 years ago but communicating vision and communicating the why and giving people a clear set of guidelines on how to go do the thing was a real challenge at that time and those business in a box systems make it easier or at least made it easier for me like hey here's what we're going to implement here's this thing that's already pre-made I don't have to reinvent the wheel here you go now we can just focus on the the most important things so best way to think about it is like a franchise that you don't have to pay royalties on now granted you have to pay money uh it was 30 or 40 Grand a year but you don't have to pay royalties right it's not like it's not a percentage of Revenue yeah it's a it's a membership that you're part of great well that was a compelling pitch for certain path given that it was yeah I mean I have U we actually we actually just left certain path and I talked to Rebecca the the president CEO and she she was asking why we left and I explained to her that you know we we' sort of run out of things to implement and there was no more road map which okay and I'm just nothing I have nothing but great things to say about the program because when we when we started that PR program we're $3.8 million and when I'm leaving like we're going to do 26 million this year mhm like I have nothing but good things to say like yes we ran out of things to work on inside that program but that just means we have to go to the next one but uh it's a great program um if you're really under five million that's like a awesome program great yep next hit next hit um we had been uh and so we're based we used to be based out of akan which weird to say but uh we had been based out of the same building for 60 years and um akan is a small town uh 200,000 people in the Metro and about 500,000 in the county itself uh now with the addition of that other business in 2018 our total service area was 800,000 people in population the downside uh of that is uh the Metro was uh shrinking so population was going down and some of the legislation and and some of the politics in uh those two towns uh scared me for the future of akan which is tough if that is the only place that you were doing work um so the next big hit was understanding that and uh seeing that as a very tangible risk to our business and figuring out what to do about it now fortunately we are only 30 or 40 minutes south of Cleveland Cleveland's population is 3 and A5 million despite being only 30 or 40 minutes south we had never done work in Cleveland one time ever in the history of the company so it was a very uh sort of shocking change for everyone that we would suddenly start driving up to Cleveland that was a a big deal um but the population to serve was just so much larger and uh if it was shrinking it certainly wasn't shrinking at the sort of same Pace that akan and and uh Canton were shrinking so uh so that was the next big move was expanding our market so we bought a very small company uh up there like 500,000 a year um which I guess was 12% of annual revenue so maybe not that small at the time and we signed a lease uh for a spot up there probably too soon like now I would do that differently um and we set up a Google my business and we launched a little Cleveland location uh we did basically everything wrong when launching that location so it wasn't really the launch like launching the location was more like a list of things to never do when launching a location but I don't know I was 278 sorry John why was it a launch if if you bought a brand that was already up there cuz you got rid of their yeah they didn't one they one we did get rid of their brand and two they didn't have a location they ran out of the guy garage okay yeah yep uh so the next big hit was expanding into a new market within proximity uh of us so we tried for a few years a few different you know we tried to run this location and that location and like hey let's launch this location um and ultimately it didn't really work out the way that we thought it would or wanted it to um and really that's only been like cleaned up in the past year uh but you know people were dispatched differently um what we should have done is just built a mega location but we didn't but the important part was we expanded our available Market uh and that gave us just Millions more customers to serve and so despite all of the wrong things that you did you did tripped forward yeah and and so you you did pretty immediately feel the pull of a much larger market the the the the Tailwind of a much larger market we it worked um now it wasn't clean it wasn't neat it didn't grow the way we wanted it to but in our very first year which was 2020 uh up in Cleveland we did 400,000 in an area that we had never done you know anything so we considered that to be a success M okay great yep but still still Bas in arran go ahead NE next hit yeah so the next big hit was 2021 I was feeling antsy so the way we used to distribute roles yeah the way we used to distribute roles has changed a lot over the years uh as you can likely imagine uh the business is very different uh and has gone through a lot of iterations even just in the four years that Brandon and I have worked together um lot of different like levels there um so I felt like I didn't have anything to do which I didn't but it that's sort of the wrong way to look at it at that size of a company and so I was feeling antsy and I was sort of like hey I need the next big thing of growth because all I could think about I I even like I had it written in my gym at at home 10 million like that that's all that I could think about was like breaking 10 million and how to get across that magical number uh mind you and where were you at the end of 2020 uh 4 two or three okay um so yeah so we you know we hadn't we hadn't even crossed five uh just like now I'm obsessed with hitting 100 and I haven't crossed and I haven't cross 50 uh but you know I think that's just how I work so that's all I could think about out and the it's really difficult to grow when you're under $5 million uh and now I like looking back I understand it a lot more than I did um but I mean mainly just resource constraint and whether that resource is time or money or talent but there is a massive resource constraint when you're under five like you're a small business and I just couldn't we weren't moving fast enough we just weren't moving fast enough so the next big hit was in 2021 I started looking for Acquisitions again John let me let me ask you why since two 2018 way back now three years ago at the time had opened your eyes to acquisition um I why had that not I I kind of had the impression that that was going to that that immediately became your playbook for growth but it sounds like it wasn't it sounds like you just did strategically going to Cleveland but but it wasn't you didn't treat it as the incred unlock to get to 10 million and 100 million quite yet no um I think I said this earlier but the the digestion phase matters a lot so if like if you grow 50% or 100% in a year that has Ripple effects like a lot of them so you know this January uh we did 72% more Revenue than I did last January uh that was not neat or clean or process driven that was messy as hell we almost doubled like that's ridiculous in a 12month time period we almost doubled um so you just need to digest and you have to figure out who you are and and um Trish uh Higgins from chenmark has talked about this a couple times once at at holco comp and she's written about it in her Weekly Newsletter which I recommend everyone to read it's one of my favorites um and she talks about when they first launched chenmark they bought uh us was either 12 or 14 landscape companies in an 18-month period and then they then they stopped and they sat on their hands for 3 years and they figured out who the heck they were as organization um and they digested and that's what we did in 2019 we're like Yeah I wanted to go do more deals but even though it was only 2.7 million I still had no clue what I was doing we had a team that didn't really know what they were doing I was working in the largest business I'd ever worked in i' I've I've never worked at anywhere else like this is it um so I didn't have a Playbook on like how do you build an accounting team or how do you build a call center or how do you hire managers or do any of it so we had to figure that out and throwing more deals on top of that wasn't wasn't going to be the right play yeah that's the only thing I did know so um we've basically bought a company every year for the past five or six years uh we've never not done a deal this year will probably be the first year I don't do a deal which is kind of funny um but also going to grow 70 or 80% year-over-year organically so like we I just got too much going on to go to a deal and make a mess um so dig 2021 you're antsy and you feel like there's been enough digestion there's been enough digestion hey you know we've got we've got some process we're a year a little over a year into SGI like we know how pricing Works our gross profits in the right spot we know what a higher teex like we we get it we we know the model I'm ready to move to the next stage cuz I feel like I've been solving the same problems for four years I'm I'm ready to move on to more interesting problems um so we started looking for Acquisitions uh followed a similar Playbook that I had done a few times now cuz by this point we bought two or three other companies so I was maybe up to four total uh but the other ones were very small like names and phone numbers so not not worth mentioning in the quick hits um and we ended up getting a lot of bites in 21 on companies that were open to having a conversation uh I had just found out earlier in 2021 what the SBA was uh so I was for Acquisitions in I had never heard of the SBA and every deal that I had ever done up to that point was cash and seller notes so that was the only way that I knew how to buy companies was cash and seller notes so a lot of people make fun of me because every deal that we have has a large seller note component um many of them even the last my two most fre most recent deals were both still mostly seller note because that's how I know how to you know that's how I learned how to buy companies um so I learned what SBA was which was really interesting and which and it opened up my uh my ability to buy because I had previously been buying very very small companies and now I'm like oh hey maybe I can buy some bigger ones so um we talked to hundreds of companies in 2021 it was it was fascinating uh I really like got under the hood of just so many different businesses in in my area and we bought three of them so 2021 was a fascinating year for us because we were still pretty small and uh I had mostly run the business debt-free up to this point and this is um you asked me before we recorded like why do I advocate for buying small and that's why I advocate for buying small because you can figure out the business you can figure out yourself and when you are actually ready to go do something interesting you probably have a really nice balance sheet so we had taken the business up to four some million dollars of Revenue we had a strong balance sheet a very lendable balance sheet so we bought the first company in um July of 2021 we bought the second company 90 days later in September of 2021 and we bought the third company 90 days after that in December of 2021 so in 2021 we went from 32 employees to 105 and we went from the 4 million of Revenue to a run rate in the 134 range and that happed to The Dig happened in about that well I spent two and a half years digesting after that so that's where I disappeared off Twitter for a while but um yeah so we it was a Sprint and I was really uh I mean maybe it was stupid but it worked um so I you know I'm saying this and I'm like I don't know that I advise people to do that you know the next two years were kind of hell but it did work so if you're ready you know if you're ready uh put your big boy big boy pants on um but yeah so we we uh quadrupled or uh revenue and we tripled headcount in 150 days uh which as you can imagine broke everything uh no process that we had at 30 people worked at 105 people uh we had roles that we had never imagined having like full-time payroll clerks we had our first HR person uh we had to bring on marketing people we had we went from two managers to like 15 or something overnight and I I had no idea how to run a leadership team let alone a senior leadership team which is what we had to turn into um the whole company uh it I mean it just exploded in in growth and and process breaking but it was a w it was wild and exciting 5 and a half months uh and that was the next quick hit I mean that put us roughly where we are today right so 2021 was a uh an an absolutely ridiculous growth here where in 5 and a half months we uh quadrupled Topline Revenue wow in 20 and so since from then through 2022 you were really digesting oh yeah through through all the way through 2023 it was two 2023 very full years of digestion yeah and so things finally stabilize and you come back on Roaring back onto Twitter and about six months ago or whatever it was five months ago basically yeah basically so um yeah like look you got to figure yourself out and and there was all this you know everyone listening is is likely much smarter than I am uh so they probably don't need to be told this but like the the processes and the way you run a business at 3 4 million is is obviously very different than how you run it at 15 to 20 and um we had to learn it uh you know I'm still going back to this was every day I'm in the largest business I've ever worked in like every day that's my reality every single day I have to hire smart people I have to you know do everything that you would expect and want to do uh but still my job to lead them and drive the bus so we had to figure out all these things um that I never had to figure out and it it took took a long time uh the first few that we had to figure out was pricing next was recruitment software was a big one um and it really it it broke every part of our business leadership and how we trans uh transition leadership and succession so it it broke every aspect of our business over over the course of uh a year and a half and then um which sort of leads us to the I think the fifth one or the well the fourth one yeah it would lead us to the fourth uh career altering hit Oh Oh I thought we were done what what and what is that well it it's we move so the businesses when we bought them we ran them in separate locations with separate brands for 18 months to help the integration be smooth so over the last 6 months what's happened and why I've become a little bit more active is they all merged legally and they all merged physically so the business um last June we put them all into one facility and ever since then it's been a J curve of growth as all of our you know two some years of effort uh that we' sort of compounded started taking root and moving the business forward great yeah well John one of the one of the thank you for that it's like it's entertaining like re um I don't know like it I'm probably not giving myself enough credit like I you know obviously there was some thought behind it and some strategy and I'm sure that I'm like beating up on myself a little bit uh but like looking back it was ridiculous like this was insane I can't believe it worked well maybe it it wasn't it wasn't ridiculous going into it it was only ridiculous you know reflecting back yeah but John I mean look going through your Twitter thread as I did uh to prepare for this interview yeah uh you're not you know licking your finger and checking the wind I mean you you you have real deep expertise very strategically yeah come on come on just like looking back it's such a it's such a ridiculous series of decisions that have led me to be here today and like and that that's really all all it is I I think it's like it's wild and when you look back over a long enough period of time you're like wow like I I can't believe like obviously we did things right obviously you know we're uh I don't even know like aund like a thousand some percent in growth when I took it over we have I've hired hundreds of people like I like it's sort of like I don't don't feel the need to boast about it because like the track record's there and it's more like it's comical that it worked cuz it it's it's just crazy like it's been a journey well I guess you know you had referred earlier to you getting into the business as there was a lot of luck in that cuz you was you had access to it because of your it was your family business and but so but now talking more about the growth and like particularly those three Acquisitions like two years ago the and and you kind of laughing like how ridiculous it was and it worked yeah you know but but almost like it was almost like you're kind of implying that it was poor judgment going into it so did you get lucky that it worked like you know I I would say it it worked almost exactly as intended uh and I think that I think that that's the thing that's ridiculous is at 2 3 years old I was like Hey I'm going to build the largest licensed Home Service Company in Northeast Ohio and 32 I did it and roughly every major strategy that I put into place worked which is ridiculous for a person who just earlier in this podcast like like I I dropped out of college three times and I took over the business at 25 and I've I've you know I'm sure I could list off thousand of mistakes and anybody that works with me could probably list off more but like we still did it which is crazy yeah um I don't know that there's really a lesson there other than uh I like it's fun like I just can't believe it worked I can't believe work the way I thought it would let me ask you this John is is maybe it worked because a lot of the businesses in that you're competing with are kind of like what your business was before you got in there with young you know hungry aggressive blood that there's just it's just still sleepy now I I doubt that's the answer because all we hear about is how hot home services and HVAC and plumbing is so there's got to be a lot of hungry sharks and PE folks and people like you out there I see them on Twitter I know them but but still you know maybe some of that is is a little bit a little bit biased where you know I I know the people who are doing this stuff so it seems like everybody's doing it but in fact when you look at the universe of businesses across Plumbing Andross HVAC licensed Home Services as you said um it's really just a tiny sliver of people who are actually being aggressive yeah I I think I I think that's a part of it um what It ultimately would boil down to in my mind is we got the big things right we bought a small business and we figured out how to run it debt-free so we had a good balance sheet and good cash management skills we learned how to acquire and we bought companies at the right time we used the right softwares we figur out how to Market at the right time which there definitely was a right time and it was seven years ago and um I I think we just got the big stuff right and when I look at companies that have FL founded in the same time period that we have exploded you know if if if there's 10 core decisions that put us where we are they missed half of them and for whatever reason I I don't know but like service Titan is a core decision and I talk about it often I don't get paid by service Titan but like that was a core decision cuz there are just very few softwares out there um as far as I'm concerned only one that allows you to run a licensed home service business at scale that's a core decision and if you mess that decision up you are preventing yourself from getting to scale so that you can save a few dollars on software fees like you're you're not spending you're saving 10 grand to lose Millions like that's the that's the actual decision that's being made um that's one example I've seen you tweet about like I think I think in your local market there's like a PE roll up and they're just and it's just going terribly like the wheels are coming off like so for example you probably have some some Intel there like what's going wrong in their case for example I mean the big thing that they're getting wrong is two big things uh how you treat your people that's that's not complicated um and marketing so this company they they rolled up uh 10 groups and they cut all their marketing spend in half like what how is that a good decision uh in in any way uh any anytime not an exaggeration anytime the economy looks like it's taking a break it looks like we're in for a rough patch it looks like anything rough is on the horizon we have always doubled or tripled down on Advertising always like consistently like the world shuts down in covid I tripled my ad spend overnight and we grew well but can you explain that John because that is pretty counterintuitive I mean is it just advertising becomes cheaper everybody don't understand how it's counterintuitive like to me that is intuitive I don't under I really can't understand how someone that's like cutting off your hand like it it just doesn't make sense to me like if you're trying to run a marathon and you chop a leg off under the knee like I I really I I I can't understand how people do that well I I I guess they become cash conscious they become conservative because they're Shoring up their own balance sheets because they're preparing for winter yeah but that like I know it's shortsighted perhaps but but it seems you know for the same reason consumers everybody belt Titans in a down the downward like if you look at the secondary it's like okay hey we have less leads so I'm going to spend less money which means we're going to have less leads right which means I'm going to make less money which means I'm going to lose my talent like that's a perilous Road and it's really hard to come back from it um so it's never really been a Temptation I I really don't understand um like I I can't even get my brain wrapped around that idea but some companies obviously do that a lot of a lot of companies probably do um so they cut their ad Spen in half and uh big surprise um they lost all their talent many of them to me so thank you guys I appreciate that and um and then the other one was how they treated their people so uh you want to know a great way to piss off a high producer is to change his commission structure to the company's benefit uh just don't do it and if you do expect to lose them uh to me who won't do that so um yeah so you know two core decisions how you going to treat your people how you going to treat your highest performers the people that drive you dollars and are you going to cut revenue or are you going to cut ad spend the moment you feel a breeze great I don't think either one's very complicated John we're already getting into kind of theme stuff here which I want to spend a lot of time on but before we pivot hard to that let me just get to wrap up your story kind of the forward looking bit of your story you've been um kind of vocal and putting out a lot of content around the big plan to get to $100 million now so give us just a couple minutes on how you how you g to do that yeah uh so um you know moving from the the I don't know what I'm doing John too uh I do have an idea of what I'm doing John totally different parts of my personality by the way uh different stages of a company requires a different leader and when you break past uh these very specific plateaus or Milestones or however you want to think about them um it requires a sometimes often a different person and I am fiercely independent and determined to always just be able to be that person so what that has uh and I'm I'm getting to the answer I I think it's just relevant to walk people through the Journey uh I've had to reinvent my myself uh six or seven times now and I'm prepping for the next one because each Plateau requires a totally different person at the hel and I'm determined to be that totally different person uh because I was given an opportunity that I did not deserve at an age that no one should have given it to me and I'm determined to earn that seat for the rest of my life uh just like any Outsider or anyone else inside the company would earn their seat I'm determined to earn mine so the 100 million um I stopped needing money uh relatively early in my life like the business outgrew my personal consumption uh I live a simple life I drive a Ford Ranger um I don't know two kids a dog I love my wife love my kids uh I don't I don't need a lot of money personally um so I struggled for a few years there when the when the I I had more money than I know what to do with uh the business was like large is and I had no um really just no idea what I what I would do with the extra money because I have no desire to go buy a Lamborghini or something so um took about two years I was 28 when that first started and I realized that the thing that excites me is I want to build something big and meaningful I want to really build something and and I want to be a force of good in the lives of people around me and and that's why I get up every day and that's why I do the thing I do and that's why I get to show up to work with a smile every day is because that is what juices me up is those two things so um when I think about 100 million even when I think about 20 I have been able to impact thousands of lives which is just you know like I was a plumber who dropped out of College a couple times a decade ago and I've been able to impact thousands of lives uh 140 of which are under my direct employee so I get to very very positively impact them but because of the size of our business we've we've created a real Ripple in our community uh We've created real economic Advantage for our vendors uh and we've created value for our customers um so my impact to the community is measurable which is cool and I love that and why watching people on my team like we have people on our team who started two three four five years ago and in that time their income has quadrupled wow because of the opportunity that we have inside our business I didn't do that we created something that gave people the opportunity to go earn what they what they want and and what they deserve um which has been incredible and so we we've been able to really directly change lives and it's it's exciting to think like wow like we've changed so many people's lives for the better and I I sincerely believe that I'm a positive part of people's lives like what type of impact could we have if we were at 100 million compared to 20 like I could impact tens of thousands of lives in my community like we could create something that would really help people cuz I don't need the money like it is not about uh me anymore so I I think that the business moving beyond me and my personal consumption habits to hey this can be about more and that's cool that it's about more and other people are deeply impacted by the decisions that we make is um I don't know it's intoxicating it's fun so 100 million means that I get to make a huge impact on my community and I get to build something meaningful which I determined a few years ago was why I get out of bed so that excites me so so that was the inspiration for it um yeah but it it it's still cool like someone approached me uh two weeks ago and uh you know we transitioned him from one Department to the other and and he it was like Thursday at like 400 p.m. or something like that and he walked up and he's like dude I just got to thank you like my income doubled in in the last months like I can't believe this opportunity was available I can't believe like you helped me get there and like did did the stuff and it was just like one like I I didn't like he did that right like he he earned that but two like hell yeah like like that's cool uh that's cool and like I want to be able to do that with a thousand people that sounds like fun that's amazing the the reason's not that deep uh I want to build something meaningful and I want to a force of good in the lives of the people around me because I built something meaningful that was beautiful John and I used that word I I used that word carefully um the the but just give us a little just a little bit because we got still some stuff I want to make sure we have time to cover uh a little bit of the mechanics the mechanics of of of quadrupling a $26 million business to to 100 so I I started the story of how a CEO needs a different leader and and there was actually a point to that before I started my TED Talk um so uh when you break past these plateaus and we are just breaking out of the next the the most recent one and so you sort of like you you hit your head against the wall for a couple years until you finally get it um and maybe for us it was like 6 months I don't know felt like felt like 5 years uh and we're we're in the next stage of professionalism so we are currently moving from a three tier work chart to a four tier work chart moving up one probably doesn't sound like a lot uh but it changes quite a bit about my life how I think about my role how the team interacts with me and how the business grows and um so the way that looks is that is now I I am separated by uh you know there's mult multiple tiers of managers between me and 90% of the organization so so how I think about communication every day has to change how I think about promotions has to change career path has to change uh driving our values and driving what we're all about like all of that has to change and be better so that we can continue to build something meaningful and be a force of good in everyone's life so we we we got there and we finalized the move from a three tier to a four tier work chart and and the tiers are you know executive senior leadership Frontline leadership individual contributors um and that took a while and it happened between 15 and 20 million for us obviously depends on the industry but Home Service it tends to happen around that size um and all I can think about is I'm ready for the next one like I'm ready for the next big challenging plateau uh because this new structure will roughly take us to $40 to $50 million uh rapidly um so you know we expect like yeah it took a while to get to 26 we think 40 is at the end of uh 2020 six so two years away two and a half years away uh so it sort of starts to jcurve rapidly as you approach the next big plateau and the next big Plateau is uh as I see it um the next line of leadership team leads uh a VP line and a seite so those those have to be resolved somewhere between $40 and $50 million but um I'm I can't back down from a challenge I don't know I I like it I think I can do it uh I I'm dumb enough to believe that I'm capable of taking this business to $100 million um and every time we break through a plateau and every time I reinvent myself into whatever the business needs next uh I become more and more confident that I am the person to do it so that's where it's at now so the mechanics of getting there is uh we think we have a mostly smooth Road uh it's sort of like more of the same up to 40 or 50 million in the next few years we do have a big challenge coming up between 40 and 50 million um and we're going to we see get far enough out that we're going to try to prepare for it as best we can we're going to bring on the right people um we're probably going to struggle it's going to be challenging we I've never had to do that just like almost everything else I've ever done in my career uh but I think I can do that too so um and sorry what is the challenge SE Suite A line of VPS and team leads so uh we expect the that's going to go from a four a four tier or chart to either a five or a six which is uh you know every tier you add uh communication is what breaks and communication is what's going to break a company and every tier is just a massive new complication of organization and not even to mention just money just just plain money uh you know $20 million business I had to invest 2.2 million new dollars into payroll in order to break our most recent plateau that's a lot of money that's 10% of our Revenue uh and that's what that took in order to get the right people on the team to keep pushing so massive reinvestment and learning great okay John well thank you for uh the history of the Wilson companies in a nutshell it's very impressive and very inspiring um I want to now pivot to a couple of these topics that you've tweeted about and just have you Riff on them um because you know even though you're pretty far away now from you know the Searcher out there who doesn't even own a business you're you're in the community you're seeing it on Twitter you know a lot of folks like that uh people who have already bought a business or you probably know a lot of of Searchers who have yet to um so you got you got opinions and and you got a and then of course from your perch you just have a lot of experience on starting with let's do hiring an operator What you know that's the idea of buying a business putting in an operator is this kind of like you know thing that's dangled out there but wiser heads will say it's a terrible idea at the same time I have had guests on who have done exactly that and those episodes are very popular Pro it because they demonstrate that there is a way of doing this so what what what what do you say um I would say I've mostly gotten this wrong and I believe that if I had to do it again with my current knowledge I would be able to do it well so the Core lesson there is it's possible but it's difficult um I think the important stuff here is what are you looking for uh what are you looking for what strengths are they going to bring to the table and how do you get them to know what you're all about and uh those are the big complicated pieces that you have to solve when you're bringing out someone to run a business in your name so uh experience um that's not really just management like management is um it's not very complicated to find someone who's had the title manager uh somewhere but what it what knowledge or core competency are they bringing to the table that you just don't have uh most of my mistakes that I've had uh have been around this idea of bringing on out of Industry operators uh so that was something that we worked on for a while we generally believed hey if we can find a culture fit or someone that we believe is a culture fit we can train the trade and that was dumber than I thought it was um very low success rate doing that uh so what we have what we now do uh still to this day is like if I'm hiring HVAC manager I'm looking for hvc manager experience um which most of the books say the opposite uh but our hit our hit rate on following conventional wisdom is like one out of 10 and our con our hit rate for following common sense is like 10 out of 10 so following common sense definitely wins for like background have they done what you're expecting them to do before not a complicated thing but have they done exactly what you're expecting them to do before uh so when we're interviewing for that position we ask granular things so uh we're interviewing for an hbac service manager right now hey what are your Tex average tickets like that's the measurement of how well you're going to do here cuz like what are you currently doing what's your track record um so that was something that we got wrong do a lot better at that now uh the next one is what strengths do they bring uh that's a personality thing um what what do they bring that you don't have personally uh so Brandon is my best example of that he and I work very well together and I'm just so blessed to have him and I hope that he would say the same about me and we we just have very different strengths um we don't use the Visionary uh operator thing um but ultimately like yeah I bring a lot of ideas and energy to the table uh and he helps put them in place it's more complicated than that but that's the general concept is that we are opposites and that works very well for us and I would say that that probably works best with most people uh have somebody that has the inverse strengths that that you do um and then how are they going to figure out the company that that's a it's a big one and this is why we've started leaning at as the organization is grown and our talent pool is deeper like we would much rather promote from within um because they know they get the company they get the culture they get what we're all about and this is this does not mean you can't do it if you're buying a company some of our most successful promotions have been people from acquired companies like they know the company uh and just cuz you're acquiring it doesn't mean that you change the company um at all and what we have found consistently is that promotions inside an acquired company like taking someone from their team that you believe has greater Talent than is currently being utilized and moving them up into the organization to take over the owner's role is the very best thing that you can do when you're acquiring a company uh We've like five or six times we we've proved that right um they know the company they get the culture they understand the staff they know the customers uh and it's a much smoother transition so I don't think you can't do it I just think have those things in mind and it's possible uh nowadays we do hire people all the time to basically run uh either new things or like you know the way our business works is we have verticals uh in teams and each team at this point is a seven figure p&l so I don't know what size of company the average Searcher is buying but every manager that we're bringing in is going to run a million or multi-million dollar business uh sometimes up to 10 to15 million so uh like Plumbing is going to do 12 this year um and when we're bringing out managers like we just hired a plumbing service manager and he's going to oversee like five million maybe of sales and um I I see that as very similar to hiring an operator because it is it is hiring an operator it's just that you have we have a little bit more of a base than somebody brand new um great and yeah so I I think it's possible I think it's hard and those are the three things that I would look out for possible and hard I feel like that's a theme of basically your everything that you've done in your story John uh great I mean you can do anything if you set your mind to it just like you know buckle up yeah buying small so I won't belabor this I think everybody in the audience knows you know well maybe I'll give I'll give 10 seconds you know the bigger the company you buy the better the more room there is the safer it is can be a little bit counterintuitive to one's emotions because it feels like it's riskier to you know be a somebody goes and buys a a business doing a million dollars in SD so people are tempted to buy smaller but a smaller business is a more fragile business and in fact the risk goes up you uh tweeted at some point this tweet might be a little bit stale now so you can correct me or correct it um actually said you know go buy a company that's doing 500 to a 500,000 to a million in Revenue so that's a that's a 200 to 400 SD business pretty small um why did you say that do you still agree with your former self uh yeah in this conversation we talked about my journey from a million dollar in Revenue to 26 million mhm you can build something big from something small and obviously you can build something big from something big um my reasons behind thinking that that's the right move is uh I have to say it but I am fiercely independent so if I'm going to buy something I have to be able to buy it like just me uh I don't want outside investors I don't want to deal with anybody I want to call the shots that I think are right I want advisers um but I ultimately believe that I make the best decisions with the help of people that are smarter than me um so uh that's one two I think you can get your arms around it like there there is a tangible risk when you buy a small business and I'm not trying to downplay that you know I don't want anybody to be like ah you said it was perfect it's not going to be perfect if you have five employees and you lose one you lost 20% of your team right like I get it like that is a tangible risk but um I like that you can build everything the whole way it is a safer approach to growth I've seen plenty of people bu larger companies and go bankrupt in the process and you can say you can say anything about that that you want you can say it was their fault you can say it was economy you can say it was whatever um and maybe they weren't even the right person to buy it and I really think that a lot of Searchers uh smart folks they have no idea what is the right like they don't even know what the job is going to look like they have a they have a conception of what the job's going to look like but you you don't know until you get punched in the face a few times on your first day and I I think that's it it's it is a safer bet to me despite the tangible risk like you can replace uh a staff member um it's hard to move your family out of your house so the P the pgs are real I've seen a lot of bankruptcies from people that just had no clue what they were doing uh the business was too big to get their arms around they didn't understand how to lead teams they didn't understand how to talk to people um which honestly talking to people is a um that's like that's important uh like if the only Blue Collar person that you have ever talked to in your life is the guy changing your oil in your car like you shouldn't buy a blue collar business like you're not going to talk to them well like they will quit uh and they probably should because like you will likely approach them wrong um and I think people just don't get that so I I think that starting small lets you get your arms around the business lets you build it the way that you want it and safer and you can always go buy a ton of companies after you buy that first one mhm so one I think it's safer two you want to know how to get deal flow already exist like even if you fake the company but I get so many DMS or or did when we were actively talking about our search more often of like man how do you get so many deals like how how do you get so much deal flow and I'm like I'm I'm me like it is a it is a very different conversation of like hey I'm John from Wilson you see my trucks on the road I would like to buy you then hey I'm you know Billy from ever Pine capital I will respect your legacy like it's it's a different conversation and I'm going to get way more of a hit rate than you are so uh if you want deal flow buy something tiny Mike botkin proved this point perfectly like he bought a tiny little Landscaping Company then he bought like 20 more and then he sold the whole thing uh you just get more deals as an active part participant in the market so you can always go and buy you can always go buy bigger ones later and it frankly get a lot easier Ju Just to be clear on your point about deal flow the point is like if you buy a there are more of these small companies to buy so you can get in the game faster rather one one you can get in the game faster instead of two and a half years of search and two once you get in the game you get more deal flow like more owners will just reach out to you I we get a phone call a week week like unsolicited I'm not looking for companies right now we get a phone call a week asking if we'll buy them they just call into our main office line uh you get just a ridiculous amount of deal flow just because you exist as a as an active participant I think it's kind of a hack to end up buying more companies later so I think it's safer you can get your arms around it uh it gets you started faster and it's a hack to get more deal flow okay John uh one other topic and then we're going toose close with a kind of a longer segment on have you break down the entire universe of Home Services businesses uh based on a tweet a great thread that you did okay buying businesses overall so um this is acquiring mines you have grown through acquisition so maybe this one seems too obvious like why are we talking about this but the reason I have this on my list to talk about is because I've seen you in your tweets say both you know this is so hard you know you guys out here the fact that this ETA thing is fashionable now and buying boring businesses is you know the next way to get rich yeah is ridiculous you you have no idea what you're up against and what this really feels like and looks like and then I've also heard you say seen you say it is a cheat code it is amazing it did unlock and you've told us tonight it did completely unlock our path so I've seen you and I'm not saying those things are contradictory I I just it's that you're you you go hard on both kind of the optimism and the pessimism piece of this I I believe I believe they're both true uh I I could probably spend a lot of time on this um and I'm going to start with the I'm going to start with the obvious one which is I did it so yeah like it worked right uh took a$1 million company and we turned it into a $26 million company and we have a path to 100 uh that's that's ridiculous um and in no other scenario in my life would something like that be able to happen so obviously it does work and it is real um that's the first one great let's let's stop the episode there let's let's end on that yeah and and like I'm I'm and I'm just going to say this that sort of the get-rich thing like I already said it earlier in this episode but money became not a concern for my family when I was in my 20s now granted I started early in my life but um so so you can do it you can achieve your Financial and Professional goals using ETA as a path absolutely possible uh the big butt that I have is um I I think there's a few so uh one is timing uh depending on the business so you know I've referenced luck a few times I was lucky that my uh dad owned a plumbing company uh obviously I was lucky that he was willing to sell his plumbing company to a 25-year-old those were obviously very big pieces of luck uh the other big piece of luck was timing like I walked into Home Service uh at the this like perfect window to walk into Home Service the internet was just becoming a thing in home service Google reviews weren't quite established you know like the biggest competitor in our Market when I started uh like the biggest like think about the biggest competitor in your market right now in their Google reviews it's probably like 10 20 30,000 Google reviews the biggest comp competitor in our Market which was $30 million a year a decade ago so big company uh had hundred and we had nine um so service Titan was just coming out there was no other software that allowed a company to run at scale uh you want to know how many companies in the US had over a 100 trucks before 2010 was probably count on one hand you want to know how many now couple hundred I mean granted thanks to Serv Titan you're saying thanks to technology in general but service Titan did have a big piece to play but thanks to technology in general like Home Services went through an uberization we just don't call it that but it was hugely disrupted where incumbent players that had had a dominant place in your Market were suddenly exposed to guys like me like in the past 7 years we have been able to take meaningful market share from people multiples of our size Because the Internet leveled the playing field but the playing field is no longer level so now hey now you do have to compete with 10,000 Google reviews that's really challenging to compete against because Google will give them more leads like that's just how it's going to work they're going to serve them up more uh so for this window of time call it two or 3 years the the rules of the internet and Lead gen weren't quite established and the Legacy players were not as strong in this new form of lead gen as they are now or they used to be 10 years ago and PE wasn't yet buying so you didn't have these massive uh rollups coming in so there there was this two or threee window and and that's why I'm saying I was lucky and I would say and I believe Chris Hoffman would also agree he bought his company the same year I did and he benefited benefited from the same uh Tailwinds that I did so this perfect moment uh of 2016 17 18 and 19 where you could establish dominance in an incumbent Market uh so timing plays a big role is I think my is is I think the big thing there um and pick your poison like pick your opportunity wisely don't buy a plumbing an HVAC company just because you think it's sexy the right buy to Plum the right time to buy a plumbing an HVAC company was 5 years ago uh it it's a much different game now um and so so what would you tell people about getting into Home Services today too saturated or just harder than it was still doable I would say harder than it was for a search budget I don't think that plumbing hvc electric is going to be the right move um maybe Roofing uh water treatments kind of interesting uh I think you can back into Plumbing HPC and electric um but you know it's hard to compete with PE with multiples so I I would personally not do it but you know I don't know well but this just reinforce if you really want to get into Home Services Plumbing HSC this just reinforces your earlier point of buying small it's the only way you could get in because a PE company is not going to buy a $500,000 Revenue bus ORS let alone Revenue there was a I talked to a company the other day and they were doing like 2 million bucks in plumbing and they had 800 Google reviews like that's outrageous that's amazing so like you can play the game like you can get there um it's just you you have a harder time than you did five years ago that's not saying it's not worth doing I do think it would be very difficult today to pay 10 times uh on a you know 1520 million business and then have to compete against somebody that knows what they're doing in this industry so I I I think that that would be a tough game like you have a lot less of a ramp to figure stuff out uh but Roofing um I I think there's tangential and I I like the idea of buying something and backing into an industry big fan of that uh cheaper multiples and you can get a little bit more creative so if you want to get into Plumbing then buy a septic pumping company that's going to trade at hardly anything add drains then you add Plumbing or go buy a duck cleaning company that you can buy for like one and a half times uh earnings at HVAC go buy a chimney sweep company at HVAC so like you can end up there you just have to be ready to build but like buying a straight Plumbing HS C Electric compy company right now probably not a great idea mhm okay John let's now that we're you're starting to talk about different verticals within Home Services broadly let's close out with this great Twitter thread that you did which is really was really like a primer on home services and so uh it's long maybe we won't get to all of it but I'm going to walk you through a piece or two of it you start out by talking about the kind of four tiers of Home Services businesses yeah and so I'll I'll kind of give you bullet points and then you you fill it in for us yep so the four tiers the first one was what you called The White Collar of blue collar big Tams licensed moates because it's requires licensing and those are the ones you just keep that you've been referring to HVAC Plumbing electricians what did you mean by that is and by tier one does that mean the best or what yeah so when you're thinking about home service or service companies in general there's a bunch of differentiators I think we're probably going to talk about all of them but Staffing is one of the biggest ones uh like who is the type of person that you're about to work with um blue collar I don't ever really use the word blue collar except for if I'm talking to someone on Twitter like it's not like this is I don't know they're just people but um like some that's going to climb up on a roof in 100° weather in Texas is probably not having a lot of great options in their life um you see a lot of excon a lot of drug addicts a lot of lot of uh alcohol addictions and a variety of other problems and that's sort of one end of the labor spectrum is like fresh out of prison uh he doesn't have an option so he's going to do your roof work uh the other side is a highly experienced 20-year Craftsman um that is paid multiple six figures and that is where you find plumbing hvc and electric so these are two you know very different people very different skill sets very different backgrounds uh and very different perspectives so I think people come into these businesses and they're like ah blue collar and it's like not at all you know these are completely different ends of the labor pool and you have to decide which one you want to work with um so I that that was the point that I was trying to make with the white collar Blue Collar is this is this isn't some guy who's you know fresh out of prison I mean maybe for some companies uh but this is likely a highly experienced very highly compensated Craftsman and and so is another way of thinking about that basically the spect of skill from unskilled to Skilled spectrum of skill uh how big is the labor pool like it's probably not very complicated to find xcon that need a job so you can find more people but your turnover is going to be high you're going to have to you're going to deal with a lot of stuff uh and I think that was the other side is who do you want to work with um most people that I know that have run a roofing company have had a gun or knife pulled on them at some point by their own employees um I I actually can't think of anyone that's never had that happen so and yeah I really can't I I can think of like 10 or 12 roofing company owners like that's and theyve all had a knife or gun pulled by an employee yes physically threatened with a weapon yes so that is one end of the labor pool and personally that's not really an end of the labor pool that I want to deal with like I'm good I'm all set uh what I do like doing is I like like working with smart people that care about their craft uh but the downside of that is it is very hard to find them and the labor Market's tight and compensation is ridiculous so uh it's just much more competitive uh so that that was the difference I was attempting to make so that that's one of the things that sets these tiers apart is like who are you going to be working with how much is your turnover going to be what's recruitment look like uh will you be physically threatened with a weapon you know that stuff matters when you're think when you're thinking about buying a business well another thing that matters which is brings us to tier two is the the the Tam the size of the market opportunity so tier two you have is low Tam as opposed to tier one was high tamam low Tam no license and some service SL install and so your examples here were Pool Service Garage Door damage remediation so elaborate there Tam is total addressable Market uh how many how many people are willing to pay you money uh for example um in Chicago and in Phoenix uh those are currently the only two cities that have this but in each of those cities there is a 250 million or higher Plumbing H and electric home service business uh that's huge that's like a very obviously a very large um business um so everyone every house has Heat every house uh you know needs hot water everybody needs AC and everyone needs power um and you need those visits frequently so two visits a year from HVAC one every two years for electric and one a year for Plumbing that's like average and uh garage doors obviously Tommy Melo has built a really big company uh but how many times do you have your garage door guy out probably not many uh um Market's just the the Market's just smaller like you have less need for that service um damage remediation uh like that's a big addressable Market um so I'm not sure what I was thinking with that exact one and then what was the other one well Pool Service pool pool yeah again yeah that's a small Tam who has a pool and uh the ticket tends to be low with pools as well yeah well and pool is regional cuz in in Phoenix you know in Florida you can Texas you can have a big so my my point here is when you're thinking about a business um what's the biggest they can get like how how big can you take it and if there's not an example in one market like Tommy Melo is not in one market 200 million and they have like 100 some locations uh precision and all these other garage door companies they're big so like you know as I say this someone's going to be like no there's a billion dollar garage door company I bet and I bet they also have like a thousand or 2,000 locations how big can you get in one market um so that's how I see the opportunity well and the other thing that was a difference between tier one and tier two was license versus unlicensed anything more to say on that is that just go back to the kind of how hard it is to General Mo yep General Moe uh labor and also what you're able to pay like it is uh there will always be a a neighbor kid down the road that will mow your lawn for 20 bucks and probably until the end of time that kid will always exist because it doesn't take any lure to do that uh so you have to distinguish yourself in different ways whereas with licenses that sets a bar for the total number of competitors that you can have uh so it it's a mo as far as who can compete great tier three you have described as kind of all service no install mhm uh always small tough labor so here is the lawn cutting here is window washing power washing yep um so so talk to a little bit talk to us a little bit about when you say all service no install what are you getting at there yeah and I'm going to start with this is a personal preference so my personal preference of a business that I like to run is a business that has a service and install component I think that that allows for a smoother path to growth um and the reason I like that is uh two different things leads are cheaper so if all I was ever doing was replacing HVAC equipment or water heaters my cost per lead would be high a lot higher and um and I would have big Peaks and valleys depending on demand for that service uh service install allows you to get leads significantly cheaper like 10 to 20 times cheaper uh as well as create a new profit Center and feed the install departments so that is my personal preference is I like that I think that that is a sustainable way to scale a business is you have a lowcost feeder into a value ladder where eventually you get the big ticket uh and low cost feeder into a value ladder for the uninitiated what do you mean give us more on those track is the best example um second best is drain cleaning but so HVAC hey we're going to do a $98 tuneup that's the lowcost feeder so we're going to come in we're going to do this uh tuneup toy on your home for 98 bucks when we're there we're going to offer you options so now we're inside the value ladder of things that add incremental value to us as well as to the homeowner and the bottom of that ladder is or the top of that ladder however you want to look at it is the system replacement itself the large ticket so we get in there for 98 bucks uh let's say our conversion rate is 60% into something higher uh so maybe that's an air scrubber or humidifier or filter change or something small so instead of $98 maybe the average ticket is $1,000 um and one in five becomes a piece of equipment MH so which is you know $9,000 average ticket or $10,000 average ticket so it starts off at $98 could become $1,000 and one and five becomes 10 MH so that's the that's the value ladder so I like that style of business um I think it's sustainable I think it reduces Peaks and valleys and if you look at the growth of our business over the last uh two years three years it roughly agrees so despite HVAC being very known as seasonal uh my my growth like literally looks like this like it's ridiculous regardless of season uh I think I posted a picture of it on Twitter because people don't believe me um and it's that service always feeding install that makes that possible because we will always have fresh leads even when uh the weather is not conducive to what we're trying to do and so just to be clear when you say in you mean install is the Big Ticket the big tickets install is a new system basically okay or replacement so I like businesses that have both I think that that is uh a sustainable way to grow a massive business and when I see businesses that have both I get really pumped up because I'm like that can be huge as long as the Tam is big enough like are there are there enough people to serve that to garage doors is a great example they have a value ladder the same as Plumbing h AC uh I just think there's a smaller market for garage doors um okay so that's the type of business I like so the next two tiers tiers three and four are either side of that Spectrum so one is all service so that means you know that $98 thing that's all they get there's no value ladder or maybe the value ladder only gets you down to like 500 bucks with upsales um so that's you know power washing like hey well instead of just power washing your driveway for2 200 bucks will power wash the house for an extra thousand something like that obviously that's good uh it's just not $10,000 so you just can't grow it that big and on top of that the Tam is small like how many people are going to do power washing I don't know but I know that I've never done power washing and I live in a nice house uh so I assume most people are like that I really don't know um so window washing is another one it's all tickets right like yeah maybe get a big contract or or whatever so so there's no like there's no big bottom of the ladder where you can build up to something large and you can upsell your way and prove enough value and uh do all that so so there's like no end which I don't I don't like I I like the journey I like the customer journey I think that's cool and fun and I think we get to provide really good value to customers um so that's all service all installs the opposite hey so it's it's lumpy and that's what I don't like about that is I want to build a big sustainable business that self feeds like I like the business should just like should be a flywheel I I like I like this idea that marketing feeds call center call center feeds service service feeds sales sales feeds install and install feeds accounting and my like most of my job is just keeping that flywheel going let's get more leads let's serve those leads let's hire more techs let's sell more stuff let's install more stuff let's pay our bills on and on and I think that's sustainable and it's a very like step bystep way to grow uh I think that install only is tougher it's a very it's Project based give us examples of install only foundation repair Roofing right massive tickets right remodeling contractor GC 30 40 50 Grand average ticket ridiculous average tickets but like if you have no leads you got nothing like that's just it you're starving and you got to go hunt down leads um so I just don't like the inconsistency I think that that is a difficult way to grow a business uh so like yes the ticket size is huge but it's not consistent and it doesn't feed itself continually and the flywheel is more like market sell market sell it's not it's it's not uh you can't machine it like in in Plumbing hvc and Electric you can sell a membership and then that person gets four visits a year so every day we sell more memberships so every day our flywheel gets bigger every month I can bring out a new person to run those new memberships because we brought on two or 400 memberships a month uh so so like every month our flywheel is just getting larger and larger because we're continuing to compound our efforts and that's what I like about that style of business is your efforts actually compound you get recurring customers you get contracted customers that you can get into a value ladder to achieve the big ticket and either service or install doesn't have that component so if you want to scale up and install projecton business you're spending more money on ads you don't really have recurring customers like you replace a roof once every 20 or 30 years um you're not going to do many Foundation repairs so uh that's what I don't like about that it's feast or famine and I don't think it's a sustainable way to get to 100 million well and that that's an important that's an important Criterion that you just said is you you are coming at this from the perspective of getting really big because that's the league in which you play that's your next goal 100 million so so a lot of people listening would be happy would be happy growing into a 15 million doll business and you probably could have these business these other in these other tiers maybe not a garage door business but a foundation repair business you could get to 15 million yeah I I think so if if very biased this is coming from my perspective and I set out on this journey to build something meaningful and to build something big so I've never looked at it from any other perspective other than that yeah yeah so that would be the question for the audience for the Searcher to ask him or herself is how how big a business do I want to build is it important to me to get to a n digit business nine fig business maybe not um so maybe it should be though listener I'm just tosing that out there John we're approaching two hours I'm gonna have to let you go um this has been uh rich as I thought it would be an amazing story an inspirational story and then an education on the lay of the land and Home services so um we could keep going for another hour but it's late for for you and me both yeah what what haven't I ask what do what would you want to tell people Searchers Home Services anything you have you have so much to share but is there anything you want to leave the audience with uh I think the big thing I don't know that I finish the um and it'll be quick but the why it's hard uh it's hard because you have no idea what you're getting yourself into and the only way you'll know is by doing it I'm sure I wouldn't have listened to someone that told gave me the same warning I'm sure that I would have said I'll figure it out which which obviously I did um but one of my biggest learnings over the past decade of watching other business owners and other people attempt to become business owners is this is not meant for everyone and what I I obviously um I I I laugh and I I joke about all the many mistakes uh that I've made um but I did get all the core stuff right and I think that many people don't or incapable so I I think the the the thing that I want to share is uh be cautious I used to think that everyone could do this and I Now understand that they can't not everyone can do this uh I suspect most people are either incapable or unwilling to make the sacrifices that are required to do this uh it's painful you learn a lot about yourself and about a lot of other things but um it's a it's a difficult road so if you're going to do the leap um John what do you think what do you think the most unexpected uh hard bit is ah man pick a thing I mean I mean I you could pick almost anything have you ever hired and fired Executives have you ever done Mass layoff um have you ever shut down like seven fig business units with teams attached to it have you ever burned down a house like like pick a thingy how many times you've been stolen from all right make turn that into every day like you're going to get stolen from every day by by somebody um yeah it's endless uh so like it you know every day is a new punch in the face and you got to have some thick skin uh and that's why I've started it that's one of the other like why why it's good to start Smalls is you get your thin your skin thick um sort of like graduate into it or even just starting from nothing like I'm kind of pro- franchising right now I think I think that's good and I think that gives people a lot of like Direction um I don't know I'm I'm personally just tired of watching people go bankrupt cuz they had no idea what they were getting themselves into and also weren't capable of doing it uh it's discouraging I don't like it I sad for the people that it affects and I've had to see a lot of people go bankrupt so I don't like it these are and these are Searchers yeah friends Searchers yeah yeah it's it's real um it's real like I I think Twitter only talks about the good stuff and what I attempted to highlight in our talk today is uh I obviously did the core stuff right but like there was a lot of things I did wrong and any of those could have been uh really bad okay John well where where no no that's that it's really important for that to be communicated um we we do try to highlight that it's not all rainbows all the time um for sure and I 10 friends that went bankrupt in the last 12 months like it's ridiculous yes yeah it's crazy lost their house yeah like it's really wish I was is is this because something is going on or is this just they weren't prepared they didn't understand the business they didn't understand the industry they weren't the leader that they thought they were they weren't as capable as they thought they were uh just cuz you're smart like I don't think I'm that smart um but we've been able to do this I think it's because I'm stubborn um but those are like I don't think it takes a brilliant person to do this I think it takes a lot of grit um and a lot of humility to approach things right and it takes a lot of research into what you're actually about to do and um like more research than seems to happen people get caught up in spreadsheets and not really like oh here here's the people I'm going to work with like I might have a knife pulled on me if I buy a roofing company like that is that is a reality of buying a roofing company um or John how much of the fact that you kind of grew up in the business and just kind of intuitively understood it it wasn't it wasn't foreign territory for you do you think I think that help me Leaps and Bounds Leaps and Bounds and and if you look at other people that also have large like Brian beers is a great example like if you look at Brian beers and what he's done what he's done is incredible like he's done something absolutely amazing he also grew up in a Midas franchise his dad had a Midas franchise that he grew up in the same way that I grew up in the plumbing and HVAC business so I'm not saying that it's impossible for someone else to follow Brian's footsteps but Brian knew that business like the back of his hand before he was 18 yeah and that is a totally different thing than you random person from Evergreen Capital who's going to respect someone's Legacy yep yep C can we go back to the part where you're growing a hundred million dollar business from from $1 million in Revenue yeah like it is possible we're going to do it 26 million this year that's crazy we just did 1.7 I think five in January uh which is you know wild that was my entire Revenue uh in my first full year of ownership so you can build something big from something small all right John well where would you like people to go your podcast your newsletters yeah if if uh if you want to hear more about what we're talking about uh owned and operated uh.com there's a newsletter there's a podcast and then you can find me on Twitter at Wilson companies John Wilson what a joy I'm glad I finally made this happen yes uh this is a bit of a a feather in my cap just kind of personally for me uh you know I your name was in lights for me for a long time so it's really cool that you I I'm at the point where you'll come on my pod so I had a good time great thank you sir I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stor that will help you along your own path to acquiring a business