#101- The 10 Best Home Service Business: John and Jack’s Ultimate Wishlist

I'm John Wilson. Welcome to Owned and Operated. Twice a week we talk about home service businesses, and if you're a home service entrepreneur, then this is gonna be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting. Let's get into it. Hey, this episode is sponsored by Service Scalers. So Service Scalers is actually a brand that I've used personally with our companies for a little bit over a year now. They've helped us manage our digital advertising. Frankly, they did a lot better than our last agency. Leads went through the roof and cost per click went way down. Check out Service Scalers if you're a plumbing, HVAC, or electrical home service company. That's what they knock out of the park and they did a great job for me. Today on Owned and Operated, Jack and I talk about our 5 favorite service businesses each. So we've got 10 total for you here, and we break 'em down, what we like about it and what is interesting. So thanks for tuning in. Welcome back to Owned and Operated.

Welcome back.

You made it.

What's going on? What are you doing right now?

I was skiing. I was skiing earlier and it was awesome and I'm windburnt. The sun was out, dude. I don't want to tell you this.

I'm smiling, but I hate you.

I know.

Yes.

It's gonna be tough. Like not a cloud in the sky. 33 degrees.

Ideal.

Beautiful snow. Oh, it was great. Like it was really start to finish solid day. Loved every second of it. Really tore it up. So yeah, it was good.

That hurts on the inside.

And the outside. But no, it was great. It was a great day of skiing. So we're going again tomorrow and it's going to be rough. Like it's gonna be like pouring.

Oh, like raining?

Yeah, it's supposed to start raining in like a couple hours. Yeah, it'll be interesting.

I'm gonna text you tomorrow.

Yeah, I'll send you a picture.

Like, how are you enjoying this?

And I'll still be like, I'm having a great fucking time.

I'm still skiing and you're not. Cool.

Today we're talking dream businesses, top 5s.

I mean, we all believe at some point in our career of owning a business that the grass is always greener somewhere else. And it's Sometimes it actually is, but I think the more often case is that it's a shit show no matter where you go. But this is different. I made a post today on Twitter or X, whatever you think or say. The gist of it was, you know, HVAC is like the beautiful blonde or redhead or whatever girl, the 10 out of 10, but she's got bipolar disorder. Like one minute she loves you and you're selling $40,000 units and it's great and every, like, It's summer, it's the middle of summer, it's 100 degrees out. She's beautiful, she's nice, she loves you. And then February rolls around and she's stabbing you in the eye with a fork.

While snorting cocaine. Yeah. Yeah.

She's crazy. And you're like, uh, you cry yourself to sleep. And then there's like plumbing that just sits here and just, she's old, she's faithful, she's wife material. I love plumbing. It's a small plumbing company, so I understand that. Before scale, It definitely is a lot easier after scale. I could see it definitely being much more difficult, but pre-scale plumbing is a wifey material.

Love her.

Beautiful. But the idea behind it is, are there any businesses that you look at and go, I don't own this yet, but if I had the opportunity, this is my dream top couple businesses?

Okay. So like for number one, I have to say it, and I don't know if we have to add another one on top of it, but like number one literally just is plumbing, HVAC, and electric. And I feel like that's cheating, but like it is like, that is my number one. 'Cause I think it's the best.

I don't know if I accept that answer. I would've accepted like septic, but more septic.

Yeah. Well, see the problem with septic, so like septic's number 2 or 3. The problem with septic is it's really hard to scale. So like plumbing, HVAC, and electric, like you can scale the heck outta those things. I've never seen a $100 million septic pumping company. Like gross margin's great, but it is a tough little bird to really get moving the way you want. But if you just want to be like a small owner with a bunch of cash flow, septic, 100%. If you want to build $100 million something, not septic. That would be a real thing. All right. So, so number one, plumbing, HVAC, and electric. I'm passionate about it. Number 2, and I don't think we actually do a good job of this. I'm going to include septic in this. Then I will get to things that I don't own. But number 2 is drains. Like drains is amazing. I love it. It's all demand all the time. It's like HVAC, it's just without the seasonal swings. That's literally it. Average install ticket is the same as HVAC. You use flips and you use like drain cleanings the same as you use tuneups. There's a bunch of upsells like jetting or whatever, same as IEQ.

So, yep.

HVAC, just dirtier and no seasonality.

Also, there's no mechanical nature to it, which is a very nice portion, right? You're not worrying about mechanical objects breaking or high cogs because you're cleaning a drain.

Yeah, it's labor. I mean, it's a ton of equipment and, and that is the downside is it is a lot of equipment. Like we have just millions of dollars of equipment stuck in drains, but it's a good business. All right. My next service business, honestly, landscaping. I don't have landscaping right now. I want one. I think landscaping is just really interesting. I like all the different stuff that you can do with it. I like that you can do landscaping. I like that you can do hardscaping. I like that you can do a nursery farm, and I like that you can get these massive commercial contracts. I like that there's a winter component with plowing. So I like the landscaping aspect. Landscaping for me really covers the service install thing. Where like you have service and then you have the install and they feed each other. And I think like any trade that I want to be in has those components, 'cause I feel like it just makes it easy to increase the flywheel.

Yeah. I did not picture you saying landscaping. That's wild. That's a left field one for, at least in my view, point of view. I thought you would've went another like very heavily traded business.

I think landscaping is just interesting. And like I said, I think you can do a lot with it.

You could do a lot with it.

There's all these different sections of that industry and each one of them sound kind of fun. I like the idea of running this massive 50, 60-acre nursery that does hardscapes and backyards with an average ticket of $90 grand, and then doing a ton of commercial work. And I like that they have all these different components and they can get big. Like you can have a $100 million landscaping company. Which for me, anything I do, it has to get big. It has to be able to get huge. Otherwise it's just not that interesting to me. Yeah.

And those hardscaping companies, my neighbor, both on both sides just use the same guy to do the hardscaping on both their houses and $30,000, $40,000 tickets. You know how old the guy is? 21.

That's 21 is insane.

It's insane. He's 21.

Yeah.

He has 4 cars. One of them is like a freaking Corvettes. Sorry, excuse my lack of car knowledge, but it's a brand new Corvette.

Yeah.

$150,000 car, lives at home with his parents and is freaking just dropping money on these massive cars and equipment because he doesn't have any expenses. He just does it all himself. He shows up, has his little skid steer.

Oh my gosh.

And Bobcat and just knocks out some hardscape and takes all of the profit.

Wow. That's hilarious, man.

It's awesome. Not scalable with that way, but long-term, like it's a really neat business, hardscaping. And I think we've talked about nurseries on here.

I don't know if we did.

I don't think we did. I've definitely looked at a few. I like nurseries too.

Landscaping's up there. Next one's tree removal. I am fascinated by tree removal. I think there's a service and an install component. Everything I like. You've got your small tickets that feed your big tickets, reduces your CAC. So I like that a lot. There's one locally here that got to like $5 million in like 3 years. It reminds me a lot of like septic and drains where like he who has the assets win. So big fan of that because it just makes it steady. It just makes it like continue on and be steady. And it's like its own unique thing and you can own good neighborhoods with it. Yeah, tree trimming's a big one and it can get monstrous. We live next to Davey Tree, like nationwide. They're headquartered in Kent, which is 10 minutes from my office. So yeah, they can get absolutely monstrous. Oh yeah.

They were all the way out. They're down here in Nashville. They were in Boise. They were in Northern California. Everywhere I've gone has a Davey Tree.

Yeah. It's got an interesting component of working for municipalities for downed power lines, working for homeowners, working for businesses. Like you have a lot of different ways to take that business and you can use the same stuff I use, which is like LSA and PPC. 'Cause like guys like me need stuff trimmed in their yard.

Yeah, I like those 2. Do you have any more?

Last one.

Last one.

I think this one's gonna throw you for a curve.

Okay.

Driveway replacements.

Like asphalt paving?

Yeah, basically. I think it's like sold day. And I like that a lot. I like the idea that you can work for 7 or 8 months.

Mm-hmm. Take 3 months off and go skiing.

Yeah. Take 3 months off and go skiing. 'Cause they shut the plants down and you just replace a driveway every day. And like every day it's $5,000 and that's it.

I looked at a business back in Montana like that and they had the best commercials on, is your wife going to kick you out for dragging mud in the house? Call this person replacement company to get your driveway replaced. It was some great commercials, but yeah, decent business too. Also high in assets.

I think that gives you a big moat because you always have to get called because only so many people have that. Like only so many people can do that. That is one of the downsides of landscaping. It is heavy in assets, but like anybody can mow a lawn, but not anybody can trim a tree. Not anybody can pump a septic. Not anybody can replace a driveway.

Definitely.

And they can get huge. You can take on municipality work, you can take on commercial work with parking lots. So like they can get monstrous. If you like what we talk about on our social media, on Twitter, on this podcast, Then you should be signed up for our newsletter. Go to ownedandoperated.com where every Friday we break down our business. We break down insights, things we're learning, things we're working on, and it's good stuff. Check it out. ownedandoperated.com.

I did not expect— those are 3 that I would not have expected from you for dream new verticals. I'm going to match that energy here.

Let's go.

You ready for the first one? So John and I have different viewpoints though. I don't want to build a, well, I do want to build a $100 million corporation, but I think a lot less about that than he does. I'm thinking a lot more about maybe a $10 million and a holdco of 10 different small companies in that sense. I'm focused less on scale, more on what I enjoy, though the first one I'm going to say does have scale and they did not return any of my phone calls or text messages or LinkedIn. So I'm disappointed because I really want to talk about them on this podcast. Is BankPac. So BankPac, it's a service company for banks and all they do is repair and work on security systems for banks, ATMs for banks. Specifically, like their bread and butter is the drive-through ATM at Chase Bank or at Wells Fargo. I've never heard of 'em before I started the show because I was looking for people. I've never heard of 'em, never seen their van. Now I see 'em everywhere. They are all over, they're all over the East Coast, all over the South. They're in like 13 different states, 15 different states. And you have to think they have pretty much the monopoly on ATM. I can't find anyone else who does it. There probably has some competition, but realistically low competition.

This feels like that's such a high-risk account. Like once somebody has market trust, like no one's gonna get fired for choosing them. Basically.

So they have a whole 9 reviews. Let me share the, the screen right here. So for a screen share, I'm sharing their website just so that John can see it. You can see they're working on this equipment and I think that they also sell parts and pieces. So they do branch automation, security, bank equipment, safes, teller equipment, vault stores, sound masking, blah, blah, blah, blah, blah. But yeah, it's a dad and his sons and they've built this just monstrous. Let me see locations. This monstrous business that, yeah, look at that. Not 13, but pretty much the entire South they have covered and they're probably running a couple hundred banks per site. Just absolutely wonderful.

That's amazing. I love it.

I really like that. I just want to know more. I'm curious. It's like a dream one. You're dealing with banks. You're not dealing with the average customer either. I never see a bank stiffing you, at least in my mind. Like they're, they're one of the last people who are going to like past the net 30, but maybe I'm wrong. Yeah.

What's your second one?

Second one, telephone pole. And like, I'm saying telephone pole, but electricity pole, telephone pole replacement.

Okay.

So this is a company that I heard about a while back, very asset heavy because it requires extremely specialty equipment. And so what they do is they bring dogs in for the state and they go and sniff around all the telephone poles. And they're looking for rot, rot at the base of the telephone pole. And then, so what the municipality does is it pays you then as a contractor to come in and pull the telephone pole and place a new one in.

Oh my gosh.

And then they hook back up everything.

That's amazing.

And it is much, much bigger than you think. I think the guy had 14 trucks. And so given this was also in Northern California, so During the fires of like 2017, '18, '19, every year.

Yep.

Like hundreds of these things burn down.

Yeah.

And they're going in and they're replacing them for thousands of dollars each. They have like a truck that has a post hole digger, like one of the big augers on it. And then they have the big trucks that carry semis that carry all the poles. And then they physically have like a lifter that picks it up, puts it in and lifts it.

That's incredible. I had never even heard of that one. God, these are good, dude. All right, what's your third?

Third is along the same vein as yours is I would like to own an electrical company one day just because I love electrical work. That's what I've done most of my life. So I really would like an electrical company. That being said, I feel like that's kind of a cop-out.

Electrical is an interesting one. I didn't really know until I got in there and every electrical company that I see is either very small if it's just residential service. Or that's very construction focused, like residential service and electric is still kind of like blue ocean.

Untouched. Yeah.

I think I've shared this on the pod, but within our first year of launching electrical service, we were the second largest electrical service company in Northeast Ohio. Like the biggest one was Mr. Electric, a franchise. And we're basically the only 2 running at any amount of scale. In service electric. Like there's some like onesies, twosies here and there, but nobody with 20. So it's a really interesting big opportunity and has service and install. Yeah.

And so definitely something that, once again, it's just always been a, I don't wanna say a passion of mine, but it's one of my focuses in the trades is something I've been very good at. So I really like electrical. And so I think that'll round out my portfolio of the HVAC, plumbing, electrical. The holy trinity.

Yeah, that's good. What's your fourth?

The fourth one, which is the one I actually sent you a couple weeks ago, was like medium to large size animal removal. Oh my gosh. Like skunks and bats. I sent you a picture of the truck and there's like a big bat face on the back. Oh man. And it's like attacking you. It feels like there's like 40 of these dang trucks running around. Like there's a lot of wild animals that need to be relocated apparently.

Yeah.

And this month alone, we've had to deal with 3 customers calling us and being upset at us because skunks had either knocked in like the venting under the house, like the crawl space venting. They knock it in and they like crawl in and then they go up into their ducting and spray. It's like, we don't touch that, so we're not gonna come and get a skunk out for you. But we've had 3 of 'em this month.

That's crazy. So that's like a big version of pest control. And I think that's interesting.

My only curiosity to it would be like the wholesale service aspect, which is the only reason I held back from saying it.

Yeah.

Is it feels like a one-time off with no scale, but is the scale just like lots of animals? There's more, you know, people moving into animal-infested areas.

I mean, maybe the service is the regular spraying or whatever for the pest side. Do you have to do the bugs and then you have the large animals? But like, I'm in Oregon and I don't know if they do big stuff. I feel like they only do like mice and I don't know, like in their brochure, I don't remember them showing me that they could get rid of a dead deer or something like that. If something, you know, a deer died on my property or a dog died on the property, I wouldn't even know who to call.

Exactly. Who would you call in that scenario? In addition to, I think that municipalities, some municipalities actually sub this out to third parties to go pick up roadkill on the side of the road and, and to dispose of it properly.

Yeah.

So I think it's an interesting business. I just, I don't know enough about it to really dig into it yet. And I think I told you this before, I do see like a path where HVAC, plumbing, and pest control actually fit really nicely as another vertical. I wouldn't do it just because I'm not in the spot to do it.

There's someone doing that in Texas. I just got connected with them. Yeah.

So that's one of our like preventative maintenance checklists is we have in there like evidence of rodent activity.

Yeah.

So you can see the little burrow holes and you can see the mouse droppings. And I can't tell you how many attics we enter and there's mouse droppings. Right. And so how easy would it be to say, hey, we saw you have mouse droppings in your attic. Would you like pest control? And being able to cross-sell, or you have somebody, a plumber under your house fixing a pipe. Same thing. I definitely see that path. It's always been very interesting to me why more people don't, like, you don't see more combinations of the two.

I think honestly it's numbers. Like, I agree with you. I think it definitely has a component to like whole home health, but an HVAC contractor's average ticket is $10,000. So it's hard to like look at pest and be like, yeah, I'll take $25 a month. And like HVAC just isn't really route-based. So I think it's just like a different skillset, but it makes sense. Like that sounds like a pretty good addition.

Yeah. I mean, how big is your customer list?

Yeah, we have 100,000 on our customer list.

So I mean like 100,000 and you, you convert 20% to pest control. Not terrible. 20,000 people on a pest route at $60 a month. I mean, you could make the case, but I think the problem is you'd have to have all hands on deck, like really focusing on the cross-sell. They use AI to check the reports and the PMs from the tech guys and then send it as warm leads to the pest side. But anyway, so yeah, pest control, but like big animal aspect.

Big animals. Nice. What's your 5th?

I don't know if I have a 5th. There's so many sides to electrical. Mike posted the other day, I forget his last name, I'm sorry, but he posted about a business that was doing like $1.6 or $1.4 top line. And like $700,000 net. And I was just like, what the heck is that? Like, how are you doing crazy margins like that? All they do is replace lights in parking lots. They have a boom truck.

Oh my God.

It's 4 guys and they're like driving around and like just lifting and then just changing light bulbs because of the huge liability of out lights. And then I'm sure there's an upsell aspect of like, hey, we'll switch your lights over from regular halide to LED or something. But no electrical license needed because you're really just changing ballasts and light bulbs and you just have a guy in a boom truck. So super route-based and you have somebody B2B, somebody calling out all these shopping center owners and private groups. I feel like you could really generate—

You could build something interesting. Yeah. And you could make it recurring. Like, hey, the bulbs tend to last 2 years. Let's just replace it on cycle. That is a good idea. I had never heard of that one.

I'll send you the link. I think he just bought the business.

Yeah.

Or he was under LOI for it. So interesting though, like the little subcategories of electrical, which is why I love it so much.

There's power generation, there's commercial, there's like just working on engines. So there's all these like different things. It's fascinating.

When you dig in, there's lots of little service niches. Yeah.

Like gas tank Like gas work, propane, water treatment, drains. Like there's so much and that's still all residential service. It's fun. And each one of them is like a business in their own right.

Yeah. If I had to go 5, I guess my 5th one, not doing any sub-niches, would definitely be hydroelectric, which is not even a question. It's the one we talked about. I just want to own a bunch of those plants.

Yeah.

I just want to own like 10 hydroelectric plants.

Yeah. The Bitcoin mining of rivers. Yeah, that sounds about right. Those were good, man. Yeah.

Sweet.

I think we pulled some good ones out of the woodwork that I wouldn't have guessed.

We learned more about each other today, John.

Really did. I like asset heavy and you like more commercial stuff. Like all of yours were commercial. Yeah.

The large animals wasn't, but yeah.

That was good. Thanks for tuning in to Owned and Operated. If you like what you heard, Make sure you give us 5 stars, leave a comment, and then, uh, go to ownedandoperated.com, sign up for the newsletter. We're doing all the things. Uh, we have events, we're on the YouTube, check it out. Thanks for tuning in to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at @WilsonCompanies. I'll see you next time.