Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
5 Aug 2025 · 4 min
0:00
In this solo episode of the Double Your Profit series, John Wilson, CEO of the $30 million‑revenue Wilson Companies (a plumbing, HVAC, and electrical contractor in Ohio), explains how to implement zero‑based budgeting (ZBB) to boost profitability. He defines ZBB as starting the operating‑expense (OpEx) budget at $0, ignoring revenue and gross‑profit line items, and justifying every expense in categories such as marketing, admin staff, fuel, rent, and utilities. Wilson stresses focusing on the largest OpEx line items first—those that are often considered “sacred”—because they offer the biggest profit‑boosting potential. He walks through a practical process: pulling credit‑card statements and P&L reports, questioning legacy costs, and replacing expensive software with low‑cost alternatives where possible. He recommends conducting ZBB reviews at least semi‑annually, ideally every 90 days, either company‑wide or by department (call center, marketing, etc.), to keep assumptions fresh and ensure dollars are aligned with strategic goals. Wilson ties ZBB to the company’s long‑term objective of reaching $100 million in revenue by 2030, arguing that eliminating sunk costs frees capital for reinvestment. The episode ends with a call for listener engagement and standard podcast prompts to like, subscribe, and share.
Chapters
I'm John Wilson and I'm the CEO of the Wilson Companies in Ohio. We are a plumbing, HVAC, and electrical contractor that will do about $30 million in 2025. Thanks for joining us for the Double Your Profit series, where we spend 30 days diving deep into the action steps that you can take to double the profit for your business. Thanks for tagging along. Welcome back to Double Your Profit. Today we're gonna be diving even deeper into zero-based budgeting. It is such a powerful topic that we wanna make sure that we're really covering this in depth. So the way that zero-based budgeting works is you start from $0. So if I'm a $30 million plumbing company and my overhead is $10 million, we want to be able to start that overhead at zero. Now, zero-based budgeting is cost only. We ignore revenue and we ignore anything above the gross profit line. So that's going to be labor, materials, subcontractors, tools and equipment. What we are focused on is our OpEx budget. So that's going to be marketing, administrative staff, Fuel, rent, utilities. This is meant to test all of our assumptions. We're gonna have to justify every single expense. We're gonna not have any leftovers, and we are going to really dial in on, is every dollar going to its maximum potential? One of the common mistakes I see when people start this process is they skip the biggest line items. I think it's either because it's scary or they think it's sacred. They think that that cost is sacred. I can't touch that. But the biggest line items is where you get the biggest juice. So what you should be focusing on first is highest dollar amount? What will give us the highest impact if I can solve this problem? Is it going to be office wages? Is it going to be software? Is it going to be marketing? Is your marketing expense just blowing up? What is the biggest thing that I can do that will drive the biggest savings in the shortest amount of time? Because we're here to double our profit. As you're going through the list, what I like to do is I grab my credit card statement, I grab my P&L, and I just start ripping it apart. I want to look at costs that we've had forever and sort of test the assumption. Do I need that software? No, turns out I can have somebody do it in Google Sheets. Do I need any of these things? And half of the time the answer is no or yes, but it can be done for less. So what we're gonna do as we pick apart these giant line items is we're gonna kill the fluff and we're gonna make the legacy costs prove themselves to us as actually valuable. What this helps us do is it gets us clear visibility across the board. We wanna know where every single dollar's going and the bigger the business, the harder that is to do. So as you get all this data together, it helps you to Really understand where all of the dollars are going. It's probably gonna be a pretty big spreadsheet, but you, as you start dialing it in, you can start racking up very real savings. Zero-based budgeting is time-consuming, so doing it once a year could be good enough for you, but we do want to hit it more often. We like to get as close to every 6 months and maybe even every 90 days if possible by department, because you can break zero-based budgeting into a few different sections. Departments. So hey, my call center, What do I really need to run a best-in-class call center? My marketing department, what do I really need to run a best-in-class marketing department? And so on. So you can do that every 90 days and then roll it up to the whole, or you can do the whole company depending on the size of your business as frequently as you can. You wanna test your assumptions and make sure that you are maximizing your dollars. What I really wanna drive home here is this isn't just about saving money. That's obviously a big part of it, but it's about saving money and being strategic with what your long-term goals are. The reason that Zero-based budgeting helps that is it helps you get aligned with what you are actually here to do. We're here to drive profit. We want to be at $100 million by 2030. And if we focus on a tight P&L, and if we focus on reinvesting, and if we put our dollars where they should be going, then we're going to get there. But if we have $1 million a year of sunk costs into all this random stuff, it's going to take us longer because that's just lost dollars that we can't reinvest. So zero-based budgeting isn't just about cutting costs and raising profit. It's also It's about aligning your dollars with your strategy. What I'd love is if you commented below with how you're budgeting and how often you're doing it. I'd love some feedback on ours. Make sure you like, subscribe, and share with a friend.
