How We'd Build a $10M Home Service Business Today

If we lost everything tomorrow, what would we do?

I'd go start an electrical business. I don't have to live with a 5% seller's note. I don't have to live with any kind of debt.

To be honest with you, that's what I did at Wilson. We bought into a small business. All it takes to win is the desire and a little bit of intelligence, which is marketing, sales, fulfillment. If I had to do it again, that's how I would model it.

It's hard.

As you're thinking about like big lessons on your journey, like what are the things that you think took too long to learn?

That one's easy for me.

Welcome back to Owned and Operated, a top 150 business and entrepreneurship podcast. I'm your host, John Wilson, and on this show we talk about our own home service business, the home service industry, and how to grow within it, or generally whatever bullshit topic related to home service we're talking about today. Today I am rejoined by my co-host Jack Carr, Whose podcast is currently ranked higher than ours. We're super proud of him and not jealous at all. Make sure you check out Jack Acquisitions. We'll click— we'll put the link below. Jack, welcome back to the show.

That is an intro if I've ever heard one. I'm, I'm so happy.

Thank you. I actually have been practicing. I worked in front of a mirror. It's been good.

You know, we just talk about whatever we want. That, that's what the show's about. If you're listening, it's whatever.

I mean, at one point we did talk about Magic: The Gathering businesses. So like, you know, I would say 90% of our Least listened episode. Most or least listened? Yeah, I think it is. I think it is. That one was not popular.

Weird.

That's so weird. Yeah. All right. Um, our prompt for today is, if we lost everything tomorrow, what would we do?

So I think that there needs to be some parameters on this, right? So when you say lost everything tomorrow, are we starting with $0 or just like $25K?

Um, what's a, what's a reasonable amount for people?

Yeah, I think, I think that's the key is like, if you lost, if you have $0 in your account, like I respect you, keep hustling. Uh, this is not shade at you whatsoever. Put some G's in the bank. And the reason is like, hey, it's not only for growing your business, but also like, hey, if stuff hits the fan, like you want a few, few dollars to be able to back it up. So if we start at $25, I think that's a really like, hey, starting over, good starting over number is like, hey, you've worked for a year for your W-2, you've grinded, you saved again after you lost everything, you got $25,000 in the bank. What do you do?

I mean, honestly, I would buy something.

Yeah, because $25,000 would compound at 10% into $250,000. But like, you could get creative and maybe get a little bit more like a purchase price.

No, I'd probably go seller. I'd probably go seller, seller finance something.

I mean, that's a 10% SBA, but if you did a high seller note plus like you could probably buy something, what, up to $1 million? If you, if you truly thought about it, like, that's reasonable, not like guru $0 down type stuff. Like, you could, you could go out there and find something. And $1 million of purchase would be like, I don't know, like $200,000 to $300,000 in SDE. So like a small business, like 3 or 4 employees in the home service industry in any kind of realm.

Yeah, I think, I think I'd buy something like, I think that's just like sort of the obvious answer.

I think It's the fastest answer.

It's the fastest answer, yeah. And I think, so yeah, the options are, would we stay in home service? Would you buy one or build one? And how fast could we get it back?

So would you stay in home service? That's a great question.

I think that home, yeah, probably. I think it's the thing I know. And I also think home service in general, I've said this before, but basically we need it.

Distribution is different because you need it.

We need it. People need it. Yeah, it's different because it's needed. I like that. I think that one of the best things about home service is also one of the worst things about home service is there's not a tremendous moat.

Yeah.

Like, all it takes to win seemingly is the desire and a little bit of intelligence in order to win. But like, if you want to win in home service, like, you can probably win. Which I think is a very— is a— it's unique, right? Like, that's a unique thing about this industry is, uh, you can make it.

On the other side of that, I think you're missing one key factor with a lot of pain in personal life. Um, so like, a lot of pain. But that being said, who cares if you are a glutton?

Jack, in this prompt, we just lost everything.

That's true. I'm just being very clear, is like, anyone listening is like, hey, they're like You are 100% correct. I'm not disagreeing with that whatsoever. As someone not from home services moving into owning home services, yes, like we are both very, very good proof that you can do it at different time points. Like people always say, well, Jack, like you guys started it this generation. And I always say, well, John started it the generation before me. Like we think that this timeframe matters. But I think in the reality of it is just like, hey, if you are open to having a lot of pain, And you want to do it, you can do it in home services depending where you are.

Yeah.

So I think that's one of the best and worst things about this industry.

So that's what— that's why I would just be like, okay, well, how can you— how can you buy something and then you could shortcut 2 or 3 years off the process and then you won't be able to buy something that big just with the amount of money that you have. But like if you bought something that was doing a couple hundred grand of revenue, like I think, though, you could really start to figure out—

I would challenge the buying, though, just because I'm thinking of somebody like Dustin Marks down in Texas. You know Dustin? Mother? Like, he's been able to build a giant business in like 2 years in plumbing.

He bought that?

No, I don't think so.

Hey, Dustin, text me when, when you listen to this, because I'm pretty sure— I'm pretty sure that Dustin bought it and then rebranded it to Mother.

He might have, but it was, it was like super small. Like it was him and an operator. That was trying— yeah, he's still— that's true. I think, I think you're actually right. He did buy into a very, very small business. Like, it was like $200,000.

And that's what I'm arguing for. To be honest with you, that's what I did at Wilson. Like, we bought into a small business and it became— so I think, like, if I had to start over again, I would do it again.

Yeah. I'm just wondering if, like, the answer is, hey, maybe you don't buy in, maybe you start, because what's the startup costs on an HVAC company?

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But, um, so yeah, I am going to go the other direction just because I want to be, uh, the devil's advocate, contrarian here.

Yes.

Is if I had to start again, I would take that $25K and I'd go start an electrical business, electrical home service business. A, there's almost no tools that you'll need right out of the gate to do basic home service electrical. B, there is a slightly larger moat, so you'll have to go get your electrical license, which helps.

Yeah.

C, in the home service side, not the new installation, new construction side, homeowners are afraid of electrical, which builds you a DIY moat, which I enjoy.

Yeah.

And D, I don't think that there is a huge amount of The industry as a whole is not as sophisticated. Yes, you have to fight off the, like, the giants who utilize electrical as like a division, but you don't have to fight off 10,000 HVAC companies or 10,000 plumbing companies. You have to fight off like—

HVAC is a sort of a shockingly competitive—

Oh, it's super competitive. It's crazy in our area. Like, there is 10 HVAC companies to every one electrical company and the electrical company though.

Yeah, it's probably like similar for plumbing.

Plumbing tends to be in our area, it's like, it's like 10 for 1, like 40% of the— there's a 40%, 60% less public math. But like, that's, that's kind of the ratio. It's like half, half plumbing is half of, of HVAC and electrical is like 1/10 of HVAC.

Yeah.

So that's where I would start because I think $25,000 can get you a decent truck, you know, $10,000, $15,000 truck. You can put $3,000 or $5,000 into a nice website, getting everything started, and you can go hire your first person, partner with them. And like somebody who only does like, hey, I bend conduit for a living. I think you could find one of those. Hey, bending conduit. I'm not talking shit on bending conduit. Bending conduit.

It's hard. That's hard shit. That is hard shit.

And it's like the angles and like getting it perfectly. Like the guys who love to bend conduit. It's so hard.

Like the guys, yeah.

They love to bend conduit perfect. It's super impressive. But yeah, I think I could do that. I think I could get to $1 million year 1 startup electrical home service company. And then I would just pound Facebook Marketplace, Nextdoor, turn on all the funsy aggregators. Because those are almost free. Yeah, electrical has a low, low cost per lead, um, and that's where I'd start.

Yeah, I receive what you're saying and still hate the idea of starting, but I do receive what you're saying. I just think like if you can start day one with phone calls—

I, I think that you get less phone calls though. Like, A, you're— it's going to be harder to find, to buy an electrical home service company. B, like, the, the electrical Inbound call demand is a little bit less than I think that, uh, than like HVAC or plumbing. Um, I guess a lot less.

I always heard it was like HVAC's in the home once every 18 months, plumbing's once every 3 years, and electric's once every 7.

I think that's changing to some extent just with EV, solar, uh, how like house electrification in general. It's probably speeding up a little bit, but I don't disagree. I think that's probably a lot less. So you have to go out there and get demand where demand is. Yeah, but I just don't think it's sophisticated.

So you would— I'm just going to roll through this again. So you would start and it would be electric.

And electric.

Okay. And I would, if I started, it would be plumbing, but my very strong preference would be buying.

It's also based on what You historically are good at, right?

I think if I look, I'm just going to give you a little bit more pushback here. Rapid has been a success story.

Yes.

You bought a tiny business and you made it a big business in 3 years, which first off is fucking awesome. Yeah, 4 years, which is awesome. Would it have taken 6 or 7 years to be in the same position you are today if you started?

100%. But we are going into this with the knowledge that we already know. I'd say the first year of stagnation, being stagnant, because I don't know what what that word is.

I don't know what you're trying to say.

Being stagnant and not growing was because I didn't know the industry, didn't know how to break in, didn't know sales pitches, didn't know— you know, you don't know what you don't know. But now that I know what I know, I think that starting— and you mentioned something interesting. You mentioned like, how— what's your edge? And I think the edge for me starting and going in rather than buying is I don't have to live with a 5% seller's note. I don't have to live with a 10% SBA note. I don't have to live with any kind of debt. on myself. And so everything can be reinvested back into the business, which would accelerate growth. That being said, I, you know, if there was an electrical company and I was starting and it was like, hey, the seller will finance it, like you could start off at $1 million, I probably would take it. 3 employees, like—

All right. First year, I think first year for me, like you're just growing. Like I would start, you know, if it's a couple hundred grand of revenue, I feel like that gets you in the door, that gets you a license. It sort of solves those initial pain point problems. So like, what's the technology? You know what is kind of funny? I'm sure Housecall Pro is obviously really great for like a lot of businesses, but like we bought a business last week that was using Housecall Pro. I think you used Housecall Pro at one point.

We had a business that did use Housecall Pro. We never used it.

I cannot understand Housecall Pro at all. Like you can't tell who does what. Like there's no, like there's no, I'm gonna log in again. There's no like, data to do anything. I can't understand what's happening inside this business. I think it might show me total revenue kind of, but there's no sales, there's average job size maybe. It's all about number of jobs completed and less about what was the revenue. So I have actually, I spent an hour in there yesterday trying to find revenue by tech or sale by tech, and I was unable to find it. Which is kind of crazy.

ChatGPT it next time.

So, okay, that's a good idea. But I think my point is I would optimize the tech stack. I would get it set up for success so that I could begin implementing everything else. Because I feel like that's a foundational piece is what's tech stack? Do we have trucks? Do we have customers? And then just beginning the process to drive more and more customers.

I think that's a big important part too is what you're overlooking. You're starting on step 2 here, but what you're getting at is that we said we both go into home services again. And I think—

Well, I would buy—

You know, I know, but going into home services and choosing that industry, I think is extremely important. And it's because we are both used to immediate cash cycles. Like you're like, hey, I would start this tech stack and I do this and I do this. And you couldn't do that in other businesses where you don't have an immediate cash cycle, like you have a 60 or 90-day Like if you go into restoration and you're only doing work for GCs, like you have a 60 or 90-day—

Yeah, that would be really hard.

Like you have to front money for 90 days after you've just spent your first $25K. So like we both chose businesses that immediately pay you on completion.

Yeah. So we both chose high gross margins, COD, can be B2C, can be B2B, a lot of other verticals, licensed.

Yeah, yeah. It's really interesting that we both kind of went a similar direction with now.

What what is interesting is Sam Preston. He I'm pretty sure he talked about this on the show, but he started a land clearing business. Did you hear about this? Okay, so it's on. It's honestly kind of insane. So he started this land clearing business, and I'm I'm pretty sure the way it works is they set up like a GBP, a website, and like. You know, they set up a business and then they went and got a subcontractor. It's like roofing or whatever. Then they went and got a subcontractor to actually clear the land. And so in their first month of business, they sold $80 grand.

I believe it.

And I'm like, okay.

Well, I mean, you realize that all these businesses are marketing.

And that's without buying the equipment.

Yeah.

Totally. And I'm like, so, so, you know, maybe, maybe that's what we should do because he, he did that in like 30 days. He created like $80,000 and then started like working backwards on how he was actually going to get it done. But that's crazy. That's crazy.

That is crazy. I mean, so like that might be the answer though. Like maybe that's your— the roofing side is you, you start a roofing company.

Yeah. Get rid of the labor side. You pick a business that you just focus—

you don't need labor.

Yeah. Go knock doors. That's probably the scrappiest way to do it. Like if you can't buy something like What can you just go launch? He just literally launched it. I think I'm gonna ask him to break it down on the show because it is, it's such a ridiculous story. Like basically $1 million in 30 days and he didn't have to buy a single thing. Like that's insane to me.

'Cause like some of the other ones that are in that same ballpark is it's not subbing it out, but you could sub it out is like there's this, the stump grinding guy on Twitter.

Yeah, stump grinding's really interesting.

Stump grinding's the same way you could sub out stump grinding.

Yep.

Sell it.

Chris Corner did that down in DFW. He created like a lead gen for stump grinding where he just like did exactly the same thing and he then sold the leads to stump grinding companies. Maybe that's the easiest path of all of this is just be, just go. Don't do it. Just go.

If you are a marketing person, go just optimize a website for SEO, get the phone number, sell the leads because like how many home services, how many home services are brand specific, you know what I mean? Like, if— if— yeah, I mean, even HVAC isn't, man. Like, we used to sub out our installs to a full— like, we didn't have an install crew until like $2 million in revenue. So from $600K to $700K, pretty normal.

We didn't either. Like, we, we subbed it out when we were pretty early.

And so how important is actually having, you know, dedicated installers on your team? The answer might not might be not that important, right? Who cares who comes and clears your land as long as your land gets cleared for the price that you agreed on?

Yeah, no, I agree. I think especially for something like that, I don't think it matters. Yeah, very interesting. Very interesting.

We also both chose tier 1, which I find interesting because like maybe the answer is not choosing tier 1. Maybe the answer like stump grinding or, you know, hey, we only do water heaters or hey, we only do land clearing. Like maybe the answer is a tier 2, tier 3 business that has almost low or no competition to get your feet under you. And then you add that, you know, you expand the portfolio of saying like, we do water heaters and now we also do plumbing. So start kind of backwards.

Most marketing agencies will show you clicks, impressions, and maybe even traffic, but none of that really matters if the phone's not ringing. And that's why we partner with Service Scalers. They are built specifically for home service companies and they focus on one thing. Which is driving real, high-quality calls and book jobs. This is a no-brainer. They're offering a 60-day money-back guarantee on LSA management, Google Business Profile optimization, and website builds. If you don't get more visibility, more calls, and better leads, then you don't pay. If you want more book jobs without the marketing headache, click the link below and book a free strategy call with Service Scalers. As you were— as you're thinking about like Big lessons on your journey? Like, what are the things that you think took too long to learn?

Sales process. That one's easy for me. I start—

Yeah, that nowadays should be like a day one. I feel like if, like, if I had to start again from zero, that would be day one.

So the hard part, like, it was a really, really hard journey for me converting from facilities maintenance where you save money and fix things at the lowest cost possible into, oh, we are generating revenue, giving options. And what I hear it all the time during our Breaking Fives and when people reach out to me, I saw it on Twitter the other day. I don't want to be like, wrong, you're wrong, but I'm being nice. I'm trying to be nice lately.

People are on their own journey.

People are on their own journey. If you don't— if you don't offer the sale to that customer and you think I'm doing a good job by fixing their unit, they're going to come back to me because I did such a good job fixing their unit. The answer is that a significant portion of the time they actually won't. They will go somewhere else for the installation of HVAC equipment specific. Like, you don't own that customer because he's a member. You don't own that customer because you've done work on their house 3 times and did such a great job fixing the unit. When the day comes that they are going to actually change out their unit, there is a decent chance that they do not use you. And I don't know why or what or where. And so The answer happens to be like, you need to make the offer and you need to generate revenue and you need to get your sales pitch down day one, because if you don't, that customer will inevitably go somewhere else. And it's the strangest thing that took me a long time to wrap my head around.

Yeah, I mean, I think that was the same for us, was it took a long time to like dial that in. Yeah.

You think by not offering the sale, you're doing You're being altruistic, but you're not.

Yeah, you're just not.

You're just being dumb. You're not being a good business owner.

Yeah. Yeah, I think similar. I think it took a really long time. We were probably late teens when we sort of understood what the business is, which is marketing, sales, fulfillment. That's it. And that Like, if I had to do it again, like, that's how I would model it again. I would deal with marketing and sales like as soon as humanly possible and fulfillment after, because like nothing happens if you can't get a lead.

So then why wouldn't you optimize for something like roofing? Because like that's the business. You don't have to worry about fulfillment.

Yeah. I mean, I think like roofing makes sense. I think, you know, my gut reaction is just like, what do I know the most? But like, yeah, roofing, you can go knock doors and sell, sell roofs. And then sub it. Or land clearing is another great example. I think my first answer, my initial gut instinct was wrong, to be honest, because I think—

Did you just say you were wrong?

Yeah, I say that all the time. Wrong all the time. Yeah, yeah, yeah. Soak it up. Soak it up. All right. What would you have done? Well, this is sort of the same. What would you have done sooner? Yeah, focus on that. What would you not do again?

Branding. Branding early on. And again, this might be specific to like the industry that we're— I'm choosing, like maybe branding is important or less painful if you're to do it for a land clearing company because you are the— like branding was so painful for us because we have 10 $100 million brands in the area or 10 $50 million brands in the area that are all pushing branding to the same customer base. And so your $100,000 spend of branding just gets drowned out like it's not real branding. Um, but if you're doing land clearing, like, how many branded land clearing companies do you see? Like, I know, I know the basement—

Or why would you—

Foundations. But yeah, well, like, I know the foundation company because they do branding and they're the only branding foundation company in the area. So maybe the answer I say is depending on market. And like, there was a guy who was using Wizard of Ads, um, who I talked to a lot about this. Like, he does doors. doors. That's it. Interior, exterior doors. His average ticket's super high and he doesn't do any aggregators, doesn't do any pay for any leads. He only does branding.

Yeah.

But that makes sense because in a smaller market where there's no other branded door companies, like you call the one branded door company when you type into Google, like it comes up automatically because it's a low cost per lead. So like you can focus on spending the money instead of on Google, you can spend it on branding.

Yeah, I mean, I think so. I think small companies shouldn't be pushing. I think that brand is helpful, and we talked about that in an episode a couple days ago where it was like, we're rebranding. So I think there is a win, and we obviously have a brand, so we're pro it. I think investing overly in brand when you're too small is a waste of money. I think you should just be focusing on the lead. We bought a business earlier this year that was investing a ton into branding. They were spending a tremendous amount. We bought it, we cut that out completely. We put in leads, we spend about 80% less than they did a month on marketing and the business doubled. It was a very like, that was the right decision. Yeah.

No, I agree. I think that again, unless you're encroaching $10 million, and again, I think this is highly specific to market and competition, but I think that what we would do since the question is what I would do, is I wouldn't spend— if I'm going into a top 3, top 5 industry, I would not spend on branding early on. I don't think it's necessary.

Yeah.

In the comments, tell me why I'm wrong, because everybody on Twitter likes to yell at me, Jack, that's because you're wrong.

Okay. Could we rebuild? Yes. I think like faster, better, stronger, baby. I mean, it took 10 years to get here today. I think like I don't know, I could maybe do it in five. I think it would be funny to do it a second time. There's some really cool people that I am really like enjoying following their journey in the industry, and they're going from like zero to forty or fifty million in like two or three years, and every single one of them is a second, third, or fourth time entrepreneur. Like they are literally doing it the second time faster. Are you talking? They understand the system.

Are you talking about like the big names, or are you just talking about just rant?

Like Sammy from Apex Pros or Matt from Call Dad, or like they just they this is their second or third time that they've gone on this ride. So like they just know of course we need a sales process day one.

Yeah, and they know what the sales process is.

If we had done that, I would have shaved four years off our growth.

I would have shaved two.

If I would have focused on marketing, I would have shaved four years off our growth journey. So it is sort of funny like oh yeah we just have to focus on like. the core of the business. But I think I was so distracted by the daily gyrations of whatever that I just, you know, I didn't, I didn't get there for the first 3 or 4 years.

Yeah. Yeah. I definitely think that you can shave off a couple of years in the early stages when you're learning and trying to understand what your business is and how it functions and getting the right people in place and what those people look like. Because again, a lot of it's people orientation and you think you have good people in place, but then you realize, hey, Just not a good fit.

Yeah.

So, and that takes time because it's an emotional journey. A lot of this is emotionally driven, not data driven, or it's like, hey, you don't even have the data or you don't have it compiled right because you don't know how to use the software or whatever it is. So yeah, yeah. I mean, I think I could definitely build faster next time. I mean, we have— we've been ramping our speed on, on build since, you know, every year or so. I think that that's pretty accurate to what it would take to do it again. Before you end, what—

Roofing, electric.

You change to roofing?

Yeah, go ahead. Yeah, probably. All right, go ahead.

I think I'd change from electric too after we've gone through this. Yeah, I think I'd choose a tier 2 business like water heaters. Water heater or like in like a landscape adjacent, like turf. Like all we do is turf.

Yeah.

And then all I would have to do is do the GMB. Sell turf jobs and then sub that turf.

Yeah, I mean, it's what Sam's doing. It's fucking awesome.

Uh, I would just have to sell the turf job out or sub it out. Yeah, so I'm going turf.

Sweet.

I love it.

I love it, dude. Just like that.

Just like that. Out of the big 3.

Cool. Uh, if you like what you heard, make sure you like and sub and make sure you check out Jack Positions on YouTube or wherever it is you listen to podcasts.