I Bought 3 Home Service Businesses in 90 Days — Here’s What Happened

I bought 3 businesses in 90 days. Here's what happened. We did 24% EBITDA last month, purely because we're bringing on these new branches and their overhead just goes away.

So you're essentially adding 10 to 12 in run rate of revenue.

I'm gonna run an awesome marketing and sales process, and then I'm gonna supercharge that by acquiring functioning businesses elsewhere, and I'm gonna give them my marketing and sales process.

Which is absolutely wild.

Like, when an opportunity comes your way that you didn't expect, do you have the ability to say yes? Just being prepared for that timing, When that timing hit, I do think what would probably be a good strategy for most people is welcome back to Owned and Operated. I am your benevolent host, John Wilson. I'm the CEO of Wilson Plumbing Heating Cooling and Electric in Ohio and Indiana, and for funsies, I talk with my friends on the internet about how to build home service businesses. Funsies. And for funsies. Yeah, for funsies.

This is a serious podcast around here.

This is, uh, this is real business. But hey, this is a home service podcast. So if you're interested in the home service industry, if you are growing inside the home service industry, you are in the right spot. Joining me on the show today is, uh, my co-host Jack Carr. Jack Carr is the CEO of Rapid Plumbing, Heating, and Cooling down in Nashville, Tennessee. We're talking buying businesses, dude. That's what's on the agenda for today.

Which is fun because I run the Jackquisitions podcast. I love talking about buying businesses.

Yeah, yeah, you've got some— you've had some good stuff come out. I bought 3 businesses in 90 days. Here's what happened.

Good title.

Yeah. So if you've been listening to the show for any amount of time, you know a few things. One, I'm— John's an idiot. Like, we know it, everybody knows it, the thousands of people, you know, we're all on the same page. John's an idiot. 2, Jack is the voice of reason. Jack tries to tame most things I say. And 3, 2026 was our big multi-location year.

Yeah.

So those are the 3 things that everybody knows if you've been listening to the show for a while. So a little bit of background on Wilson, 3rd generation home service company, Akron, Ohio. We bought, I think, 12 acquisitions over the years. I bought it 10 years ago. So acquisitions have been a big part of what we've done. And we've also grown a ton organically. Last year we finished in the high 20s of revenue, and of that high 20s, 70% of it was organic revenue and 30% of it was revenue that we acquired. So we feel pretty comfortable playing on both sides. And I have this high conviction that best-in-class companies have a very strong organic and inorganic Growth strategy. So just to break that down, organic is like marketing.

Better processes, marketing.

Yeah, we're going to go market, we're going to go sales. What's our marketing process? What's our sales process? And you do need that to be a good business. You can be too lopsided on either side of this, but like, hey, are we running a good operational business that is growing organically without M&A? That's organic growth. Inorganic growth is mergers, and acquisitions. So we're going to go buy some shit. And the best-in-class companies do both. I'm going to run an awesome marketing and sales process, and then I'm going to supercharge that by acquiring functioning businesses elsewhere, and I'm going to give them my marketing and sales process so that way they can grow organically a lot. So I have a conviction that best-in-class companies can do both. And I know people that only play on one side of that, like, hey, all we do is deals, and hey, all we do is Um, growing organically. And I think that they're very lopsided and, uh, weak organizations, to be blunt.

Weak is a strong word.

You're weak.

Uh, but, but yeah, it's also— I mean, you guys used it as a great tool for also, uh, integration into other trades, right? So like, you bought, uh, electrical business, you bought the—

totally—

the, uh, restoration business. So they're all like A lot of it was growth.

So maybe the reason to acquire is you can acquire into new trades. So service expansion or geographic expansion. Like, hey, I want to— there's a city 45 minutes away from me. I want to go acquire something in that city so that way I have a presence there. I can sell and market to their customers. Or like, hey, here's an electrical contractor. I want to add electric. So either one is great. We've done both.

Yeah. And, and early on, it seems like the— not to say it's better, but one of the easier levers to pull to grow is to acquire into another vertical because startup of a vertical is extremely difficult.

Totally. Um, well, I mean, that labor, the, like, the hiring talent, the driving the sales process, just what's all the— what's all the stuff you don't know about this other new vertical, like, yeah, just go— you can just go acquire the team with that knowledge and inventory and process and price book and just all the stuff you're gonna have to figure out.

And so now that you've, you've kind of done that, because you came into these 3 acquisitions at a point where you've already— you're running the big 3, maybe a 4th if you include, uh, restoration. Um, so we're obviously— these 3 probably weren't, uh, new vertical oriented.

Yeah.

Are, are you focusing yours Your future on more geographical orientation and why.

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Yeah.

Um, so hey, can I go buy a plumbing company that's doing 60% gross margin, and can I use that to raise my overall gross margin by 2 points? So we're trying to hire or we're trying to acquire for density inside services we already offer. And we're also trying to acquire new geographies. A big part of the last 2 years, I'm going to hearken this back to 2024, we've got some really early podcasts, you and me, and I made these declarations of we're not going to have any unprofitable months, which we've literally done actually for 26 straight months. We actually haven't had numbers Unprofitable month, which is kind of fucking awesome. But so hey, we're not gonna have any unprofitable months. We're in infrastructure mode. We're you know a lot of those sort of earlier shows where we're building our HR team, we're building our marketing discipline, we're building accounting. So if you're trying to figure out and you're a company that's like growing from that like five to fifteen million range, I would recommend some early 2024 episodes because like that is the live playbook. Of how to do it. Yeah. Um, yeah, yeah. I— some, some days I think back to the, like, incredible resource that we put on just on the internet. Like, like, I started podcasting when we were $3 million revenue, and we'll do like $40 million this year in 3 states.

Like, yeah, I think that you were just above $10 million when we started, which is wild.

Yeah.

Um, yeah. And I was sub-$2 million.

Yeah, it's crazy.

Yeah.

So, but, but back to this acquisition.

Yeah.

So '24 and '25, we built this platform where, hey, our accounting team is locked and loaded. If I add $10 million of revenue tomorrow, I will not have to add more people to my accounting team.

Mm-hmm.

Maybe another call taker or 2, not really anybody in HR, no one in marketing. That's the power of scale where we outgrew our overhead. Our overhead year over year is less this year than it was last year. And last year it was less last year than it was in '24. So our overhead over a 2-year time period shrinking while revenue's up by, you know, $15 million.

Yeah. Which is interesting. And I mean, we'll dig into this later, but I'm very curious because like, why? Why now? Why now versus before? Do you feel like you've gotten to a point in your processes where you can realistically add more revenue and the processes behind it are all set so that You're not, you're not essentially destroying everything and having to rebuild because at smaller scale, it feels like a lot of time when you do these acquisitions, like you just break every process versus now you have the accounting team, you have the, the centralization teams that are able to help make these transitions a lot more smooth.

I generally, I think that you can outgrow overhead and I, at least as a percentage of growth year over year. So if you're watching on YouTube, I'm doing hand motions. So if you're listening to Spotify, you're robbing yourself of something that's funny. But if our revenue growth is 15% year over year and our overhead growth is 4% year over year, we outgrew our overhead. We are becoming more efficient with our fixed cost Of the business. And our thesis was, hey, we've outgrown our overhead. I want to diversify the business into new geographies and just give them our resources so that they can grow. And I don't think I will have to add infrastructure to do that. I think that I can go add $4 million over here, $6 million over here, $2 million over here, And I will be able to reduce their material cost by 20 to 30%. I'll be able to eliminate their software cost. I'll be able to eliminate their services cost, whether it's consultants or agencies or whatever. We'll just use our internal team or our agencies. And we will be able to take a business that is a 40% overhead business or 35% overhead business, and we will be able to take that to 15 to 20% in branch overhead.

Which is absolutely wild. That's so crazy.

Yeah. But honestly, the wild part is we beat that. Maybe we'll pull up a P&L, but we beat it, guided by a lot. So yeah, we surpassed that pretty hard, which is awesome. So the why is we've been building towards this forever because I just, you know, but one of the best benefits of this podcast is we can learn. Like, we can talk to all these people and we can talk to these smart operators that are running multi-location and, and we can just ask them anything you want. And hey, what, what's it like? You know, Chad Peterman is still one of my like favorite episodes where he talks about this exact thing.

He goes deep.

And this was 18 months ago. And it was, yeah, we want branches at $5 to $10 million because once you go above that, you have to add infrastructure.

$10 million.

Totally received.

And I remember specifically he said, It's a warehouse guy and it's a general manager.

Yeah.

And then technicians. Like that was his playbook.

So our org chart is sales manager, admin, techs. Uh, so very similar.

Yeah.

Makes sense. And, um, but yeah, he said the same thing. Like, hey, accounting is shared, HR shared, marketing shared, call center shared, dispatch is shared. Like it's all shared infrastructure. So really all you're doing is bringing on like 3 to 20 techs over here that you will just benefit from the scale that you've already built. So this is when you start seeing giant companies running at 25% to 30% EBITDA, this is how they're doing it. We did 24% EBITDA last month, which is crazy because we've historically been like a 14% to 17%.

Yeah.

It was like a 7-point jump purely because we're bringing on these new branches and their overhead just goes away. So that's the why. We've been building towards this for years. This was the strategy. 2026, I've said a bunch on this show, it was going to be our multi-location year. The only thing that we did not know is the goal. We have this plan and it's called our value creation plan. And it's like, hey, we're going to go from 3.5 of EBITDA to 8 or 7 in 2026. And this is how we're going to do it. We're going to buy 2 companies and we're going to There's 7 pillars inside this plan. And the first pillar is we're going to acquire 2 companies, maybe 3. And we acquired 3— January, here I come.

In Q1.

Yeah. Yeah. Which was kind of funny, but opportunities just kept coming up and we kept saying yes. And I mean, yeah. So that's the why. We've been building towards this for years.

So you're saying opportunities, but so what made these opportunities? Let's get into some actual nitty-gritty here. What happened and why did you deviate from that plan? How good was this opportunity?

Have you ever seen Yes Man?

Yeah. A long time ago. What is it? He just says yes to everything.

Jim Carrey. He just says yes to everything. Yeah. There's this— Yes Man's a funny movie, and I think it's from like the '90s or early 2000s. But this idea is like he goes to this seminar or something like that, I don't even remember, and it's like just say yes to everything. So he says yes to everything and it totally changes his life, like amazingly for the first 90 days, and then really bad because the government thinks he's a terrorist or something. And then after that, it's like amazing again. And I kind of think about my career as the yes man, as when an opportunity comes your way that you didn't expect, do you have the ability to say yes? Do you? Do you have the bandwidth? Do you have the capital? Do you have the balance sheet? Do you have the infrastructure? If someone walked into your business tomorrow and said, hey, I'd like to sell you my company, Do you have the ability to say yes to that luck? Because a lot of this is luck. A lot of, yes, some of it is strategic and we were thoughtful and we did all the right stuff, but when the opportunities came to us, that part's kind of luck. Someone else's timing was not my strategy.

Yeah. It's just being prepared for that timing when that timing came.

Totally. Totally. So on the nitty of what happened, so we had One we've been working on for a while, and that announcement goes out pretty soon, so that should be fun. The other two were really quick. The sellers reached out to me. One of them I'd been talking to for about a year. He's attended our Breaking Five events. He listens to the show, you know, so like he good relationship with us, understands what we're about, and he reached out and like. We gave him a value like a year ago and it wasn't quite what he was looking for, so he went back to work. And then in November he said, hey, I think I'm ready. And I said, I'm ready. Like, I'm the— I'm Jim Carrey, right? Like, I'm gonna say yes. Like, let's fucking do this. We'll figure this out. Let's get this done in 25 days.

Yeah.

'Cause I wanna get it done by the end of the year. And we did it. We— I mean, it was a lot of work, but we got it done in 25 days. But it was someone that we had established a relationship, we had talked for a while, and so was the second one. So the second one was an owner, he had a little bit of health stuff going on, and he reached out to me and it was a similar scenario where I was actually like, I wasn't even closed with the first one. And it's like, do I have the capacity to do this?

Mm-hmm.

It's in a different city. Does my team have the capacity? Do I personally have the bandwidth? And I literally thought of the Yes Man movie and just like this, how many people have the privilege of being reached out to by a friend and saying like, hey, can I sell you my company? And it's sort of like where there's great power, there's great responsibility. I felt like, hey, I'm getting this luck. I need to do something about it. I need to go do it. Why not?

Yeah, exactly.

So I said yes, and we closed that in about a month. And then the third one closed at the end of March. We're actually filming this a week or 10 days prior to closing, so that's kind of funny. Been working on that one for a while. So similar friend, worked through it for a long time, presented value, and we were able to come together in a way that worked for everybody. I think it was, I put myself out there on the internet with a podcast. You put yourself out there on the internet with a podcast. All 3 of these people are inside the sort of owned and operated system. They've all been to events or workshops or podcasts or whatever. And so I put myself out there, I established relationships with people, and then one day they'll be ready and we'll be ready to execute whenever that day is. Yeah.

And that totally makes sense. And So like what around the range in sizing, what size and industries were these in?

Plumbing and HVAC. The first one in January was plumbing only. The one in February was plumbing HVAC, and the one in March is plumbing HVAC electric.

And sizing?

Smallest one was like $1.5 million when we bought it, and the next one was $3.5 to $4, somewhere in there. And the final one is 6.

And dude, that's awesome. That's crazy. So you're essentially adding in the first quarter of 2026 about 10 to 12 in run rate of revenue, and then you're hitting those EBITDA margins at 20%. Like, that is so wild.

No, it's absolutely ridiculous. Well, the business, yeah. So the business roughly grew 50%. In Q1.

Yeah.

Which is a lot. And, um, and this, like, the structure of the business changed a lot. So, so the whole, the premise of the show is I bought 3 businesses in 90 days, here's what happened. Um, so what happened was we went from high 20s to around 40 of revenue. It's actually a little bit hard to, to like nail that down exactly because the 2 businesses that we've acquired so far, um, like one of them is up 50%. immediately up 50%. We walked in day one, we raised prices, we gave team members raises, we spent a lot more money on leads. So that company went from 3 or 4 techs to, they have 7 today. So they're up 50%, but they'll probably double here soon.

Yeah.

So it was $1.5 million, but we're hoping for $4 million. The next one, we're hoping to add around $1 million in service revenue. And the third one, Don't know yet, but it's— there's a lot of— so like 40-ish, right? Like it could be 39, it could be 44 depending on the organic growth in these businesses that we just haven't owned that long yet.

Yeah, no, that, that's pretty wild. I mean, there's a lot of question marks, but, you know, I think that it was accurate because as I was working with you through these, these at least first 2 acquisitions, yeah, like you did hit the Jim Carrey terrorist stage at one point of like, it was good and then like, oh, it's hard.

Yeah. Yeah.

I mean— Are you guys still sitting in that range or is it kind of evened out? Is your rough 30 now—

So January was crazy.

Yeah.

January was a lot. So it would say all of January was a lot, but we closed on January 1st. January 2nd or 3rd or something like that, I went out of town to visit the company that we're acquiring in March. And January 5th, we like began heavy due diligence for the other company. So like there was a lot going on in early January. Um, and then we had to go to and from that new branch.

Yeah.

Uh, it's in Indiana. So, and just like bringing on the team, like meeting them and getting to know the managers and like talking to people and starting to drive our integration playbook. Um, it was a lot. of work. And I would say all the way through February, calmed down a little bit in February. And the results in February were genuinely insane. I think we've acquired a bunch of businesses over the years. We bought 3 businesses back in 2021. I've talked about that so much on the show and it kind of broke the business for 2 years.

Exactly.

Well, yeah, we went from 35 employees to 105 in 5 months. This year we've added probably 40 employees or something in Q1, but it hasn't been that big of a deal. 40 is a lot, but 40 is not like, as a percentage of total employees, that's like 25%. So it's not like we're not going to break from that.

How difficult that January has been versus your rough time post-sale, I was surprised. I thought you would've had a more difficult time on the transitions. But it seemed like, yes, it was difficult and it took your attention for a while, but there's only like a week or two where you were like really out of it and then just like right back into the normal John.

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 ServiceScalers. 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. Who's the team is a really So as you're looking at these deals—

Your team or acquisition, the people you're acquiring?

Both.

Yeah.

Both.

Fair enough.

But hey, who's boots on the ground? Who's going to be entrusted to run this organization? Do I have an incumbent leader? Am I going to move somebody else from another branch? So when you're looking at growth through M&A, the leader is important. And anytime we've messed up on M&A, it has always been 10 out of 10 times the leader, every single time.

Actually, that's mine too.

So we just put a ton of energy— totally. We just put a ton of energy into that. This time we're like, immediately I'm coaching their managers. I'm talking to their managers every— still, I talk to both of those managers every day for 20 to 40 minutes a day. It is a huge investment of my time and energy. But I think it has to be in order to drive the results that we're wanting. We immediately put them into leadership trainings. We've had them to our headquarters now for— we're doing monthly full-day trainings. It's a day and a half of trainings and a dinner. So we're bringing them in for that. We've integrated them into our daily huddles. We've consolidated call center. We consolidated dispatch. We're in the process of consolidating inside sales. Honestly, it was only really hectic for probably the first couple weeks because it was all on me. The first 30 days of each acquisition is really John. And then post that, I start bringing in team members depending on the need of that business. Like, hey, this call center's rough. I'm going to have Lori come in and we're going to consolidate their call center. And Lori's amazing. So she does it. Really quickly, and like does a great job. Or like we grabbed a hold of their marketing like on day three, and you were right. I think we argued about that in person once, but you were right. I said that on podcast. Hey yo!

I'm gonna cry.

But yeah, yeah. But like so Jesse grabbed that, and his team took it over. And so like as stuff peels off of me for things I have to worry about, it gets a lot easier. And I think my my sort of discussion or argument around M&A as a growth strategy. is where are you at in your business? We've acquired 12 or 13 companies now, and of the 12 or 13, these 3 were the easiest. And some of it was because the acquisitions targets, but some of it was because our team is just mature.

Mm-hmm.

Back in 2021 when we were heavy deal, It was similar. It was 3 deals in a year, 3 deals in 5 months. The way that that functionally looked is every single time we closed an acquisition, we had to bring on overhead, big overhead. Like, hey, I have to go bring on a controller. I have to go build an HR team. I have to— so we'd get all this EBITDA and we'd immediately have to go invest it into—

Yeah.

shared office function, your admin teams or leadership or whatever, which in hindsight I probably would've done it differently, but that's what we did at the time. So where are you at with your business? I do think what would probably be a good strategy for most people is, can you just buy one business a year? Just every year, take down a deal, integrate it, get the muscle into your business, figure out how— what your playbook is. And then when you have your controller and your HR and your call center, like, go freaking nuts.

Yeah, yeah. No, I think it's once the business matures to a point where your internal business is not going to grow from organic. Because it's, it's ironic, I feel like we had this conversation 2 years ago or a year and a half ago, and the answer from you was, Jack, we're not buying businesses right now. A, because of debt, the cost of debt. Right. It was soaring. But B, the second thing was like you were saying, hey, we had bigger opportunity inside the business. Exactly. If I'm going to go spend $1 million tomorrow internally, organically, I could grow the business way more than if I spent $1 million on an acquisition.

So— And I think that those facts have changed. I do too, over the past year.

And I find it interesting because it's like the maturity of the business has gotten to a point where You're able to really grow much quicker at a higher EBITDA and a higher margin through acquisitions themselves. And so as you— Yeah.

I mean, our EBITDA went from 14% to 17% or 14% to 18% to 24% in February. And February is death zone for Ohio. So that was really astonishing. And I don't think we'll do— it was 23.8%. I don't think we'll do 23.8 in March. It'll probably be like 21, but still, March is— that's crazy. So, if we're doing that in shoulder season, what are we doing in peak?

Yeah.

Yeah.

Yeah.

Yeah. Yeah.

It stresses me out too.

40%.

Yeah, exactly. And then, so, okay. So, super interesting. You're closing your third one in Q1. Are you going to try to keep up this, this level of momentum? Like, so, right, it's working. It's working for now. You've had some great opportunities. Um, are you just waiting for more opportunities? Are you actively searching? Like, what, what does it look like?

I think we're probably going to do another one or, or frankly, 2, uh, later this year. Um, I, we've built an incomplete map. And there's enough distance in between these locations that we want to start connecting. They're in totally different cities. We're running in 4 locations in 3 states right now. And so I want to start connecting those dots so that we can share a little bit more infrastructure. And I think Peterman does a great job of this. Tommy at A1 does a great job of this. We're like the hour away strategy. If you listen to some podcasts from mid-2015, Yeah.

Or even the Peterman one that we did. He talks about it.

We talk about this a ton.

Yeah.

So like our thought is, hey, how do we, how do we connect this? So I have a, I have now a branch that's 3 hours away from our headquarters. Let's get something an hour and a half. Let's get something halfway in between because then we can share install capacity. Right now we're actually sharing install capacity. So people are going out there.

Yeah.

Uh, we have some, we have a crew out there this week helping out. Yeah.

You've talked about centralization of, uh, kind of office tasks, but now it sounds like centralization— There is centralization of field.

Field staff.

Which is kind of wild, a wild thought.

So, this isn't my idea. I'll just walk people through what other people are doing. So, they're setting up like, I don't think hub and spoke is the right word for it, but it's the one that we're gonna use. So, if there's 10 locations and they're all in a chain, what does a location actually need? Does every single location need to be a warehouse? Does every single location need to have parts? Does it need to have restocks? Do you need warehouse guys? Like, what do you need for each location? So, some of my peers, the way they're building is, hey, I'll have 10 locations, but only 4 of them are warehouse locations, which means that's where their installers report to every day. And then the other 6 are sales locations where, hey, it's a tiny office and 4 guys go there or 10 guys go there or whatever. And maybe they've got some piece parts, like, of inventory for truck stock, but it is a sales office.

Yeah.

So that's how we're kind of thinking about this is in between. So we've got a Toledo that's like halfway in between and we're going to either buy or start something there, hopefully buy. And then we'll, we'll do an install warehouse either in Toledo or in Indiana. And then that will like branch.

Yeah, that's like Hoffman. So like Hoffman has the Nashville, which branches down to Murfreesboro, which is like an hour drive, give or take, um, 45 minutes. But yeah, sales office.

And it's just like a sales office?

Yeah, downtown, uh, Murfreesboro versus—

And guys report to it every day?

I don't know if guys report to it every day, but it's like branded, full lettering on the top. I would assume that it's more than—

Well, the trick is actually guys reporting it to it every day, because that's how these other companies— it's not just like a DMV, it's like a real— it's a real sales office. Like, there's a sales manager, there's techs that report to it.

It's just interesting because he greenfields it all, but But again, the curious part is the acquisition side, like actually buying something that's already doing $2 million in this area, probably already has that shop, probably already has that inventory or store inventory.

I think there's a good argument to both.

Yeah.

Like we're thinking about it because we have just on the very outskirts of our service area, like we're doing $1.5 million to $2 million, but they're an hour and 15 minutes away from our headquarters.

Yeah.

So it's like, okay, should we just pop up a 5 Tech sales office And go to town. I bet that $2 million could become $5 million.

Yeah, I bet it's super easy, or I shouldn't say super easy. I bet it's easier to recruit top techs too that aren't going to have to, hey, you guys have to drive an hour and a half every day.

I think it's way easier. Yeah. So I think where's the talent? So yeah, we will probably keep some version of this momentum up. It'll slow down a little bit. We have to digest. This was a The business grew 50% in 90 days. That is a lot. Uh, we are feeling it not as much as you would expect, um, which is a little either alarming or awesome.

Uh, it's like the too good to be true feeling. It's like, is something—

am I missing something? Is something about— am I about to get shot? Um, but yeah, it, it's, uh, it's going really well. It's gone really well, which is exciting. But we've also been working and preparing for this for 2 years.

Yeah.

Uh, and we made sure that we were set up to do this like well. Uh, like, hey, we invested in Sage Intacct, we invested in all the stuff we needed for services. Like Sage Intacct, like we're getting— we're— a new business can flow into that on like the second day of ownership. Like it's kind of awesome versus QuickBooks, you know? Like QuickBooks used to be like a real process.

And, and so like you did mention like, hey, we're— you're looking at 2 more this year. What What if somebody wants to be your opportunity, if they're ready to go?

Oh yeah.

And they're kind of localized to the— what was it called? The Ohio Basin, Midwest? Where should somebody reach out to you?

We're Midwest. We're looking for Midwest. So, if you're Indiana, maybe Illinois, Michigan for sure, west side of Pennsylvania, Kentucky, Tennessee, what else is down there? West Virginia maybe. I don't know if West Virginia is probably like East Coast, but yeah, that's sort of like the zone that we're looking in. There's some western New York that like Buffalo is out here that like we could potentially get into. But that's, that's sort of where we're looking. And the reason that we're looking for that is when you start taking down acquisitions in new markets, you to drive like the maximum gain, you want to be able to consolidate every line item on that P&L? How can you positively impact every single line item on the P&L? How do you reduce your material expenses? And this is the hard one for outside of region or outside of state. You now have to, hey, where is my HVAC equipment sold? Is it sold direct? Is it sold through this manufacturer over here or distributor over here, this distributor over here? So you have to start doing cross-distributor agreements or have centralized distribution.

There's cross-product, right?

Yeah.

Like you guys, your Ferguson sells—

Or if you're in different zones.

Trane.

Like Indiana is a different zone than Ohio. So we have to now work with 2 regionals in order to like combine our account, drive our pricing, like control our relationship. So that's a part of why we're trying to stay in this little basin is we want to be able to drive the maximum gain. Which it, like, from my— I'm sure other people can, like, prove this wrong, but for the size of company we're buying, I, I think it's needed.

Mm-hmm.

You know, if we're buying a $4 million business, uh, we have to drive the maximum cash out of that business as fast as possible to, like, basically prove the thesis. We're self-funding this, right? Like, we're not private equity, so we have to, like, drive ROI really fast. Um, so if it's a $4 million business and we want a million of contribution cash coming off of that business to the headquarters, then what can we do immediately? Well, we can merge our vendors, we can merge our softwares, we can consolidate call centers, we can consolidate dispatch, we can consolidate tech stack, we can combine marketing, and you can do all that really fast. And also, you can travel there.

Yeah. I mean, that one's not—

Is it a drive or is it a flight?

I mean, it's still, it could be a drive. You and I are only 7 hours away. So I mean, if you're buying anything in between that, like Kentucky-wise, it's still 4 hours, 3 hours, which, yeah, if you fly, that's less than an hour on a flight. So like by the time you get to the airport and get down there, you are, you know, airport, rental car, you're, you're like at an hour and a half to 2 hours of already sunk time for flying.

Yeah.

So what's an extra hour?

Yeah. Well, I see, I had friends, I had friends buying in like the 2021, 2022. They were buying companies all over the US and it was a mess. I mean, it was like anytime you wanted to go visit a branch, it would take— it was a real process versus can it be an hour flight or is it a 4-hour flight because you're going from California to Pennsylvania? Here's an uncomfortable truth. Growth breaks the moment that your team can't keep up. I know that finding good people fast is really hard, especially in home services positions like HR, accounting, marketing, call center. It is hard to keep up. QuickStaffers helps home service companies build reliable virtual teams that actually understand the trades. QuickStaffers provides vetted remote staff who are pre-trained on ServiceTitan and use best-in-industry SOPs. These are team members ready to integrate into your business on day one, handling roles like customer service, lead follow-up, scheduling support, and more. We're actively hiring an offshore assistant controller right now through QuickStaffers. I can't recommend QuickStaffers enough. They've helped us scale our business without a headache. Head over to quickstaffers.com for more.

You know, that, that, or the, the windshield time, it can be a lot too, especially on these smaller deals if you don't have the team. So like, it— I mean, I'm not— I don't want to overstate the fact like We almost bought that business in Jackson 2, 3 years ago, and I remember driving out there and driving back. It was 3 and a half hours, an hour and a half each way, 2 hours each way. And like, that adds up really quickly when you have to do that 2 to 3 times a week. Like, talk about trying to maintain your, your full-time business and then merge a secondary one. So yeah, it's still a lot, but that's interesting.

And a lot of people go multi-location way too, way too early. Like, I've met a lot of people at like $4 million of revenue and they go multi-location. And I think to my point, back in 2021—

Well, ironically, we were multi-location and you went singular location, what, last year? I was.

We went too early. Yeah, back in 2023.

Yeah.

But we went too early. And it was exactly that thing that I said about 2021. So just if you're thinking about doing this and you're thinking about doing this fast, like replicating what we've done, in '21 when we were buying these deals and putting them together, every time we closed a deal, we had to bring on overhead. We had to bring on a controller. We had to build an HR team. We had to build a marketing team. The reason that this is working so well and it feels less stressful is because that stuff is built and we're just adding revenue. We're spreading less butter across more bread. We are already there. That's Bilbo Baggins in— I don't remember that quote. Spread across too much bread. He's describing, he's like 100, it's at his birthday, whatever. It's in Fellowship of the Ring. You need to rewatch Lord of the Rings, obviously. But yeah, so the reason it works is because we have this infrastructure built. If you didn't have this infrastructure built and we were a $4 or $5 million operation, I think this would be a lot harder. I know this would be a lot harder because we lived through this back in 2020.

Oh, I wouldn't even try.

Well, there's a lot of guys out there that are multi-location and they're obviously making it work. It's just, It is harder than— so like, we don't get— I don't want somebody to walk away from this and be like, I'm gonna go do what John did. And I'm like, ah, maybe.

Yeah. Yeah. I mean, the few operators who are smaller that I know that are doing this, they're running essentially 2 separate businesses. There's no efficiency of scale. And then that's the only way to do it is the only scale— scalable part is your personal time, which you put into each business.

Yeah.

Um, but you're— you still have like fully run shops. And so you don't get to see that benefit of the 24/7. 25% EBITDA and reductions in HR and reductions in here because the shared services is just such a smaller piece of that.

Yeah.

So I mean, that's awesome. So that, that's next steps. You're, you're buying in the what, sub $5 million? Um, how—

Yeah, we'll go over, we'll go over it. Um, but like, that's the target. I like Midwest, $5 million of revenue is a great target. Um, more plumbing, the better.

More plumbing.

Uh, as far as like the— yeah, if you're 100% plumbing, we're gonna talk to you real quick. If you're 100% HVAC, we're gonna approach it a lot more hesitantly. And yeah, if you're all plumbing, the one we bought was $1.5 million of plumbing. It was a great deal.

And then on the other side to it, how are these deals being structured? I don't know if you want to talk about that real quick. I know we're already at 40 minutes.

Asset sales. Yeah, they're asset sales. So you buy the trucks, maybe the accounts receivable depending on the deal, inventory, name, phone number, customer list. And usually it's like a 2 to 3 times of earnings, maybe more for the right deal, maybe less if it's a tough deal. If the deal is in distress, there's some things you can do.

I was just going to ask, are you looking at distressed deals at all? Because I know there's a little—

Yeah, we are looking at distressed deals. So what's kind of funny is over our career of deals, of the 12 or 13 we've done, 9 or 10 of them have been distressed. Yeah. So like, I don't, I don't know. I just attract you. Yeah, I guess it should. Maybe it should, but it doesn't. So yeah, so a lot of the deals that we do are distressed deals. So like, if you're, if you're like, we've done deals where they're losing a little bit of money. We've been, we've done deals where they're losing a ton of money. But yeah, we're not, we're not bothered by distressed. I think in the right scenario, it can be a perfect fit.

Yeah.

For what we're doing. Sometimes we can't touch it, but honestly, the only reason we couldn't touch a deal that's distressed is if it's distressed with like more than 50% new construction. Then it's like, I can't do anything about this business. Like, all I'm going to do is walk in. We've talked to a few of those owners. It's like, all I'm going to do is walk in and I'm cutting 100% of the new construction out of this business on day 1. 'Cause that's the only way to save it. But yeah, no, we do distressed deals. We've done a ton of 'em and I honestly, I kind of like 'em. Like, I think it's kind of fun.

Yeah. I'm speechless off that. But—

Yeah, I think like turnarounds are just like, it's in your blood or it's not.

Yeah.

And there is, it's in my blood, dude. I don't know. Like, I like it. I think it's fun to go in and turn it around. I think it's a race. There's like, it gets your blood pumping. It's good.

I don't agree. Me personally, just because I don't like that stress. Like, hey, we're losing money day one. I'd like to buy businesses where we're making money day one.

So, I mean, you can format it so you can get there pretty quickly. Yeah.

I mean, that's deal. You can format the deal correctly. You're right. Anyway, any last comments, red flags, big things you want to mention about Acquisitions?

Nope.

3 in 3 months is awesome. That's crazy, man.

3 in 3 months is crazy. I thought 2 in a month or 2 was crazy. That was easily my record for speed.

Should people, should they, after this episode, should they go and look for the press releases of who or what you bought? Is that gonna be a thing?

I should do some press releases, but no, we haven't done it. I mean, just for the backlinks alone.

Yeah. No, I mean, all the big PE companies do it, man. I can see John Wilson doing it too. Yeah. Yeah.

Ohio, Ohio man.

Yeah, exactly.

That's funny. Awesome. Well, thanks everybody for tuning in. If you liked what you heard, make sure you like and sub.

Like and sub.