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In this episode of “Owned and Operated”, John Wilson and Jack Carr discuss a lot of interesting topics including the concept of a mobile tire and oil change service. Get to know why Handyman Business is a special niche! With the convenience of having a professional come to you, it's a no-brainer for homeowners and fleet companies alike. The profit margins are better for homeowners, but fleets provide a more stable and regular source of income. This business model can be a sure thing in the business-to-business market because it saves money and keeps cars on the road longer.
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John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter
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John Wilson, CEO of Wilson Companies
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Owned and Operated Episode 55 Transcript
Jack Carr: Welcome back to Owned and Operated, where we dive deep into the businesses we own, the businesses we are acquiring, and bring on guests to hear about their service based operations. If you like what you hear today, follow us on Twitter. That's John at Wilson companies and Jack at the HVAC Jack. Also, if you'd like to stay up to date on our newsletters, events, and workshops, check out our website at owned and operated.
Jack Carr: com. That's owned and operated. com.
Jack Carr: In this episode, we discuss a handyman business with a unique clientele, a fleet vehicle tire and oil change service, and our first ever bad business of the week.
John Wilson: Welcome back to Owned and Operated. What's up, Jack?
Jack Carr: Hey, John. How's it going, man? I'm good.
John Wilson: It's good. It's a Friday night. Ready to drop some knowledge into this pod.
Jack Carr: That's how we know we're getting getting up there in ages. You're exciting. Friday night is jumping on a podcast.
Jack Carr: Yeah. Yeah. Talking business
John Wilson: for sure. Yeah. That's, that sounds about right. How'd your how'd your week go?
Jack Carr: A good week. We finally got some cool weather or excuse me, some hot weather coming through here. And so we sold a few units this week and. Nice. Can't complain. It's been like the first big heat snap of a year.
Jack Carr: So we're excited. We're ramping up getting people fed, which always feels good when texting salespeople and the companies walking away with money. Can't complain. Yeah.
John Wilson: Yeah. And how many comfort advisors do you have? Just one. Yeah. No, that's great. And do you have selling techs too?
Jack Carr: No. So she it's a she and she's an absolute killer.
Jack Carr: She's amazing. She's been doing this her whole life and she's really good. So we're lucky to have her. We shot above our a skill level in our pay level here to get her and it's going to be worth it. We did that, that this week and then hopefully it's going to get farther on a deal that we're under LOI on.
Jack Carr: Okay. Really nice stuff. Yeah. Hopefully you can break that down after it gets a little farther along here.
John Wilson: Yeah, no, that sounds like fun. Cool. Yeah. My week what did we get into moving? Like I've said, the past couple of weeks, we're moving down the pipe on construction on the new headquarters.
John Wilson: We're working on a couple of deals, which are fun. The biggest, like fun thing is we brought on new people, similar to how you're describing. We brought on some new folks inside our organization in the past month or two that have just been, Awesome. Great salespeople. Our restoration company was the biggest one.
John Wilson: We brought on a great salesperson. Restoration. The business has just been
Jack Carr: Yeah. Her restoration is an amazing business.
John Wilson: If you have a good salesperson, if you don't, it's terrible, like the worst ever.
Jack Carr: And you said you were going out to Arizona next week. Can you talk about that? Anything fun?
John Wilson: Yeah. My brother's getting married, so we're going out there for, we're taking the kids.
John Wilson: So we're just going out there for two weeks. So we take off today's Friday. We take off on Tuesday. So there should be a lot of fun. And then I'm going to be able to do some site visits of like really big plumbing and HVAC companies while we're out there. I was able to get into a few. So I'm like really pumped up about that.
John Wilson: These are like a hundred to 200 million outfits. So that's going to be, that's going to be fun. Just stroll my way through there, take videos the whole time. It's going to be great. Some corporate espionage stuff going on.
Jack Carr: Speaking of that with big old companies, Do you, have you heard about Hoffman Brothers?
Jack Carr: Yeah. Yeah. So he just got on Twitter too and reached out to me just cause we're in his area. He saw us.
John Wilson: Oh, I saw him respond to something I said the other day.
Jack Carr: Yeah. And his
John Wilson: response talked about like a hundred million in revenue or something. I was like, okay, damn.
Jack Carr: Yeah. They're a big company. They're big here.
Jack Carr: And so him and I got to chatting about some cool Ray and wrench group and all that kind of stuff. But if follow him on Twitter, He's going to be a wealth of knowledge. He's an ex Marine, just once a Marine, always a Marine, but I saw that he was commenting on some of Rich Jordan stuff too.
Jack Carr: So he's going to be a good one to follow.
John Wilson: Nice. That's great. Cool. All right. We've got we've got some, we've got some businesses to break down. What, what did you bring for us this week, Jack?
Jack Carr: All right. I'm excited about this one. So what I have this week is an interesting, it touches home to my heart.
Jack Carr: I love property maintenance, like property maintenance, industrial maintenance, just maintenance crew and maintenance guys. They're my favorite kind of employee there that do everything handyman. They're like the step up from handyman. And so what I got this week is property maintenance business.
Jack Carr: They contract out to property management companies. Who have thousand, 2000, 3000 homes under contract. And, um, they're just a really neat company. Were looking at them, but they just didn't fit with our they didn't fit with our model as well as they they were asking a lot of money for what they were actually able to produce, but still, in my opinion, good business if the price came in.
Jack Carr: But I talked to the owner, he said, we can talk about it. So a neat company. So to start us off, the customer base is property management companies. The guy would walk into these large property management shops that had, like I said, a thousand homes, renters of America or whatever.
Jack Carr: And he'd say, Hey, you have a property maintenance team. What I'm going to offer is I say, you take off all that overhead. You get rid of all the scheduling crews, you get rid of everything that you have there and we'll run it for you and do it within, we'll complete work orders faster than your current crew is doing.
Jack Carr: And so that's, that was their business model. He did that six times. There's some major client concentration because they only have, six, six different property management companies, but these things are just absolute monsters.
John Wilson: That has to be like a crazy switching cost to, that's sticky, cause if you don't have them, who else are you going to use?
John Wilson: It's hard to go retail for something like that. Cause you paid two or three times as much. So I think I'm, I think the customer concentration probably doesn't bother me that much just because the PM would lose so much by trying to switch. And with the higher market,
Jack Carr: yeah, with the higher market, how it is to be able to flop back.
Jack Carr: You would need to be able to hire six different people like
John Wilson: what, two weeks or something. Yeah. Like good luck. Yeah. Yeah. Best of
Jack Carr: luck. And they have to be from every trade, like carpenter, plumber handyman, that's what they did. And so it was a great model, super sticky. Some things that didn't like pricing breakdown, you get a plumber out to, or if I'm a business owner and I have a plumber out in the field, I'm charging On average, you know what is your plumber's total for?
Jack Carr: 120 bucks an hour. . Sorry.
John Wilson: No, . What? What are your plumbers?
Jack Carr: More,
John Wilson: quite a bit more. Yeah. So and Yeah. Yeah. So 120 an hour. Usually if we someone in, if we see someone in the 90, a hundred, 120, somewhere in that range, we're like, Hey, you're undercharging by, maybe two times, maybe more.
Jack Carr: Yeah. I think we're at one 40 for hvac. If we were to break down, if we were flat rate pricing, but if we were to break it down, it comes out to be around a 1 40, 1 44 . So they're at 80, 80 an hour.
John Wilson: Yeah. So just and is it like time and material? It's like a
John Wilson: I was here for, yeah.
John Wilson: Okay. Yeah,
Jack Carr: so they're just all hourly. Because it's just such a vast, like array of things that they could potentially do. So time and material and, but the volume on it is so huge. They're bringing in, he was saying somewhere in the, I want to say 200 work orders a week. Wow. Yeah. So like very I'm sure a lot of them are smaller end up items, but it just in general kind of mass volume.
Jack Carr: So
John Wilson: like if.
John Wilson: I would imagine that the way that works, cause that's a ton for five or six people. So I would imagine the way that works is they like you get 20 work orders all on the same property and each tech will do 10 a day and just stay on that property.
Jack Carr: I believe the customer concentration is pretty, pretty tight too.
Jack Carr: What was it? I think I'm pretty sure a lot of them are just really small work orders, right? So when you flip a house. That you have that heavy, like boom, all at the same house. But there's also clogged sink, clogged toilet, light bulb out. They're just really basic. And it's not like there was too much work behind it.
Jack Carr: You could really knock out eight to ten work orders in a day. As long as the drive time wasn't killing you too much. Which, compared to all other service businesses that's really what we all deal with anyway. Yeah. So the size of the company, they had eight, six in the field, two in the office.
Jack Carr: We could probably break down the math on that. I should have done that. So you have 200 work orders, six techs. That's that's a heavy amount of work orders per day.
John Wilson: Yeah. Yeah. That's a lot.
Jack Carr: I think they, it has to do probably with the, they're running a, probably a pretty large backlog too.
Jack Carr: So you push it out two weeks and it just continues
John Wilson: to pile
Jack Carr: up.
John Wilson: Are they doing any of the big stuff or is it like, are they doing unit turns or are they pure focused? Hey, we're here to do the small stuff that nobody else wants.
Jack Carr: They're doing small stuff that nobody else wants, right? It's really low value.
Jack Carr: Yeah. To go out there and unclog a sink. Realistically, right? A sink clog is not going to take you long. Fixing a piece of wood on the hand rarely is not going to take you long. As long as you're able to get out there and get it done, be parts ready. So I know they were very focused on having.
Jack Carr: What they need at the shop at, which is difficult. It's a, it's an inventory issue because you need everything, right?
John Wilson: Yeah.
Jack Carr: You need capacitors for HVAC. You need a snake for plumbing. You need PVC. You need just like the whole gambit. Yeah. Um, and then they're doing about 230 per truck per handyman. Pretty low for any individual style trade.
Jack Carr: But once again, they're charging 80 an hour.
John Wilson: Do you know what they're paying the guys? What's a wage? Oh goodness.
Jack Carr: Let me think back. I think the wages were running in below market for the individual trade.
Jack Carr: That's what I'll leave that there below market for the individual trade. Okay. If we're on average paying like an HVAC guy, 25 an hour or something, they were coming in at 21. But
John Wilson: they're
Jack Carr: also,
John Wilson: if you, do you feel like do you feel like that's a hiring? I know there's some businesses, like there's a business locally here.
John Wilson: And they're in drains, but they're, and I, obviously I wanted,
Jack Carr: I was going to say, yeah, if you don't bring up drains once an episode, John, I'm going to be disappointed. I know it has to be at least once an episode,
John Wilson: at least like you'd like drain companies. Yeah. Yeah. Just a little bit. It depends. It depends on the day.
John Wilson: It depends. I brought a non drain company this week, so I really tried to be like, I tried to be respectful. So this company they hire a bunch of I think it's convicts or ex convicts, like people who got out of prison and that's a big part of their hiring strategy. It doesn't really fit for what we're doing.
John Wilson: Cause we say we're going to be, background check to all that stuff. And I think Ayo had, He had a turnover business. He ended up selling it, but I think his hiring pool was relatively similar because you're an empty unit. So it really, it really doesn't matter. So do you think that's how they got it under market or like, how do you think you're doing?
Jack Carr: Correct. I think it's a mix of that as well as there's less customer facing nature, right? Cause you're working for the property manager and the goal is to keep the prices low because their goal is to have a low operational cost, right? So you're not going in there, you're not upselling, you're not, looking for other things to talk to the homeowner to try and get a bigger ticket.
Jack Carr: You're trying to keep the ticket as low as possible. That's an issue of non aligned incentives for sales conversions and things like that. But in fact, to the hiring, yes, I remember they had they had lower skilled labor. They, it was a lot more kind of. I don't know how to put this, maybe not convicts, but just maybe a little bit more unscrupulous.
John Wilson: Yeah.
Jack Carr: So once again not the guys were nice guys. Some neck tattoos, things that you don't generally see in some of the bigger trade facing companies. I think this is where they go.
John Wilson: Yeah. I think that makes sense. I think that makes sense.
Jack Carr: Yeah.
John Wilson: That, that has to be a somewhat fairly open talent pool, people that have skills.
John Wilson: And if you can find something that like can offer opportunity, then I don't know, I think it's probably a good thing. I know that we've had people who had records from 30 years ago, but even 30 years later, it was something that like, maybe they got in a fight when they were 18. And that's still on their like background check when we pull it up and they might've done like a day in jail.
John Wilson: It's interesting how long that stuff stays on and how long it affects people's lives. So yeah I'm think I'm into that.
Jack Carr: Yeah. And the best part of the whole thing was the number. You're looking at these companies and this one particular is doing somewhere. It was about half a million and even half a million and it was a hundred 1.
Jack Carr: 4. Million gross. So the marginal listings are absolutely monstrous.
John Wilson: That's monster. Yeah.
Jack Carr: Yeah. And once again, they're paying them lower than average pricing. And then that really, that volume is where it comes into play. They were just hitting boom. Yeah, two or three guys on a site do, it adds up and it's all charged back to the PM and then charges the homeowner, I'm sure at a, at some kind of a uptake of
John Wilson: 10 percent markup. Yeah. That's pretty interesting. I think, uh, what did you, so far this has been good. What did you not like about it?
Jack Carr: What I didn't like about it is as a conjoining of the businesses, what I'm currently doing.
Jack Carr: Right now we're not looking to hold hostile. We're looking to more kind of join. Have scale, right? Efficiencies of scale and it just didn't fit right there. They're not upselling. They did 130, 000. And HVAC and I'm thinking, man, on, on 6, 000 homes, only 130, 000 in HVAC seems really low. So either they're charging,
John Wilson: might've just been like filter changes and like more refrigerant, yeah. My wonder, nothing else.
Jack Carr: If you change out a capacitor and you look at what a capacitor costs, it costs, 15 bucks. And if they're just upcharging with an hour of labor. You lose that margin that you normally get.
John Wilson: Yeah so not a good fit for your current platform. I think it's, I think it's interesting in general though.
John Wilson: How do you think these things get to scale? You just have to keep taking over more properties.
Jack Carr: Correct. I think you have to keep going for the big guys, and I don't think it scales in a singular city. I think like in our area, you'd have to do it in Nashville, Chattanooga and Knoxville, right?
Jack Carr: You have to open up 3 different shops and try and grab them all in that kind of triangle, but there's no way to, you only hit, there's only so many rentals that you could possibly do. Maybe get a national contract. The, these guys I think it may, there's maybe, I was doing some research.
Jack Carr: There's maybe two or three more big property management companies, and then you have to start going for the smaller guys, the guys who have, 200 homes and 100 homes. And I think that's where you start like really getting into the weeds and it starts getting difficult for customer acquisition and to scale up.
John Wilson: I almost wonder if it's easier because they, so like we have And the property manager couldn't possibly afford to bring on their own maintenance people because they're not big enough. So like they need something like this. Whereas if you go to a big shop, like they have the option to just, keep doing what they're doing and have tighter control over the output.
John Wilson: I think that would be the hardest thing for me. If I was the PM, I'd be like, Hey, I'm going to put you in the. In the buildings that my clients own and you have to do a good job and I have to trust you to do a good job. And that's a hard thing to lose control over. Especially if you're throwing all of their volume at it because it is so sticky.
John Wilson: Yeah. Like I imagine that's a pretty long sales process because you really have to build up some trust there to know that these guys are going to do it right every time and not be like, do something crazy inside your apartments. Whereas if you go to a smaller shop, they don't have a choice anyways. Like they're already hiring somebody. Probably some rate like this. And if you say, Hey, I'm going to solve all your problems for you. It's 80 bucks an hour. We'll do whatever. Here's the zip codes we serve. That way you can keep a tight route. I don't know that feels like a good way to do it for to me.
Jack Carr: Yeah. When I was looking at it, I was thinking you go commercial.
Jack Carr: Also, you have a commercial aspect. You start hitting instead of, PMs for commercially started in office buildings and office repair and office maintenance, and then start focusing maybe on like larger Airbnb clients. Oh, yeah. There's a higher amount of damage in those units probably than you're just your typical home.
Jack Carr: They have higher flip rates. So that's what we were looking at.
John Wilson: And maybe you add like unit turns into it as cleaning or something. Cause like they would be willing to pay a premium cause they have to turn it over between 12 and four every day. Yeah. That would be interesting. You could probably tuck in
Jack Carr: a nice cleaning company right in there and that would actually round it out really well.
Jack Carr: Yeah. Interesting.
John Wilson: Okay. So what do you, what are you ready to
Jack Carr: steal? Yeah. Yeah. So you need a handyman license, which that's not even in every location, right? Every state is a bit different. Tennessee. It's a handyman license. It's really easy. And then I think if you start getting into some bigger stuff, it does, you have to get individual trade licenses, like locally plumbing licenses and things like that.
Jack Carr: But just to start it, handyman's license, a truck, one or two guys who can do things that you can't, or that you hire out two or three guys that are really handyman. And then you go in there and start walking into these smaller companies, like you're saying and say, Hey, we'll solve some of your problems for you.
Jack Carr: We can only do three or four trades, but this is where it's at. I think this is extremely easy to start. Even if you just focus on Airbnbs or just focus on commercial, you can really get a good portfolio of companies right out. Yeah. Yeah. I'm putting this somewhere like at a, probably like a two, two or three.
Jack Carr: I don't know if it's that easy to scale to maybe like a 20 million company. Yeah. Absolutely. Like you would with a plumbing or something, but at least I don't
John Wilson: know that you need to, if you have good cashflow it seems like their expenses are rock bottom. There's no marketing. Like you can if you just want to turn cash, like this feels pretty good to me.
Jack Carr: It's a great lifestyle business. Definitely.
John Wilson: Yeah. Cool. I'm into it. Yeah. I think the same, I think the only I think, yeah, scale would be the tough part. And I think picking a strong, like, how are we going to go to market? If I was going to launch this I could be wrong, but I really. Like my conviction is smaller PMs that have no op, they have no other choice, but to sub out the work and then just be a solution for them where you respond the fastest, right?
John Wilson: Where if Hey, if I can get out there today, if I have a four hour guarantee or 24 hour guarantee, even that's a lot better than somebody else that's paying like. There might be paying 50 an hour to be a general handyman. So yeah, I'm into this. I think I agree. Yeah. Rate it two to three.
John Wilson: Easy to start. There's almost no capital. You can just start doing it. And then you start just building clients. I'm into it.
Jack Carr: All right,
John Wilson: what did what'd you get this week? So this week I dragged in a mobile tire and oil replacement business. So this was fun. I went to high school with a guy and he and I saw each other, high school was like 14 years ago or 50.
John Wilson: I don't even remember when, but he and I saw each other eight years in at some restaurant. I was just, Hey man, what's up? What are you doing? And he's Oh yeah, I launched this. Mobile oil change thing. And I'm sitting there okay, like kind of hell. Yeah. That sounds great. That from my perspective, that's a slam dunk.
John Wilson: Yeah. What do you charge? Because if we send our guys out to go get an oil change, they're sitting, I have a guy who I'm paying a lot of money sitting in my truck, which means that truck's not on a job making money. And there's, they're like sitting there getting their oil changed. So there's like a, there's a real cost and opportunity cost for us to go get oil changes.
John Wilson: So we started, we brought them on four or five years ago and it's been a good fit. And I always liked the model. I think I think it's sweet up to five to seven trucks. Getting it above that seems hard, but I think you'd have to really nail down like how you handle B2C. But from B to B, I like it a lot.
Jack Carr: Okay. So this company in particular is only business to business.
John Wilson: I think there's a few different ways you can do it. And so there's a couple of different ways that you can launch these things. Cause I know how he's doing it and it's mostly fleet. So his whole selling prop is, Hey, I'm going to come when your vehicles are already down.
John Wilson: So maybe I'll go to your technician's house. If you have a morning meeting, I'll go there and I'll go to the morning. I'll do 10 at the same time while you guys are in like an hour long meeting. That's what we usually do. So for us, it was a no brainer. Like you come out, knock out a bunch of oil changes.
John Wilson: This is going to be super easy. Replace tires if you have to. And he has most of that stuff on his truck. Now what some people do. Is they go to homeowners to me, that one felt a little bit more difficult, but I think the margins are obviously going to be better because they have to be like if this guy's coming out to my place and he's doing 10 vehicles at the same time, that's going to be a cheap oil changes.
John Wilson: Cause he's all in the same spot. He only had to make one visit. Whereas if he's going to my home to just change. One car's oil, maybe it'll be twice as much for the convenience fee or whatever. But there is a model out there where people do it to homeowners and they either do it direct and they market off of Facebook or somebody, some dude was doing it off Tik TOK or they partner in with a Tesla, obviously that would be for the tire part, not the oil part, but they partner in with a Tesla or like a Chevy or somebody else that has an at home, uh, service and they do those tire swaps and oil changes for them there.
John Wilson: So I've had this done on my personal car. Like I had my Tesla popped a tire like a couple of years ago. And it wasn't this guy that came out, it was somebody else, but it was like a mobile tire change and oils service. And his whole thing was like half his lead flow came direct. So he was working directly with homeowners.
John Wilson: Maybe they. However, they got ahold of them or like small business owners. And then the other half was higher volume, lower dollars through dealerships.
Jack Carr: Yeah. I have trouble thinking that this would work B2C. I feel like I've seen multiple companies pop up, die, pop up, die, pop up, die over the last 10 years, trying to get this model down.
Jack Carr: So I wonder what, there has to be, there's a pain point, right? We know there's all pain point. Everyone hates doing it. I
John Wilson: think it works really well, B2C, if you're tacking it on to an existing mechanic shop or tire shop. Cause if someone's calling you up and saying Hey, I need to make an appointment to change my tires.
John Wilson: And they said, Hey, we can do that at your house. Yeah, that would be a really easy, that'd be super easy. Yeah. They're just big trucks. Yeah. Let me share my screen.
Jack Carr: Yeah. But from a B2B side, I've also had quite a few reach out to me. So I know that how they're marketing it, they're finding, fleet companies and just emailing them. So I can imagine it's pretty in a C the B2B
John Wilson: side is like a slam dunk. Hey. I can come when your trucks are already not running and I will do things that keep your vehicles on the road longer.
John Wilson: It's like a no brainer. And frankly, it's cheaper because they're like running it out of some garage versus some large mechanic shop. They don't have to keep inventory. So aside from saving money on tech wages and the opportunity costs, like we paid less in real dollars per oil change, because it he's coming out with 20 gallon jug of oil and he just, does the whole thing.
Jack Carr: Yeah. Not to mention, it gets slow over at the Jiffy lube or something. Yeah, you still have guys sitting around all day doing nothing maybe one or two guys in case somebody comes in But here you can actually schedule it out in advance, which is really nice.
John Wilson: Yeah, and you can route it I feel like the magic here is fleets Like you need somewhere where you can go and you've got 20 vehicles parked and you can just go knock it out Do this from an average ticket perspective like you want your average ticket to be high, right?
John Wilson: So if they if he comes to my place and he's only doing oil changes That might be 1, 200 in oil changes because he's just knocking them down. Versus if he comes out to my house to, replace one tire, replace four. Maybe that's four or 500 bucks.
Jack Carr: Yeah. But definitely,
John Wilson: I dunno
Jack Carr: how
John Wilson: old. So this is what the trucks, this is a real picture of the truck.
John Wilson: . So this is the one that comes out. It's just a big truck. I don't think they send Oh, they show the inside. Yo. That's my boy right there. We went to school together. But yeah. So is it a
Jack Carr: tire changing station in the back? Yeah. That's so cool. Yeah, it
John Wilson: is. It's slick. It's really cool.
John Wilson: So yeah. How are they running that
Jack Carr: thing? What's the voltage that those things take? I can't, I have absolutely no idea. Yeah, I have no
John Wilson: idea, but yeah, he can like fully replace a tire. And they don't, they just load it up according to whatever your vehicle is. So up here you select your tire you do whatever services you're going to do.
John Wilson: You schedule it. And then when you're selecting it, you have to put in your make and model that way they can bring the right tires.
Jack Carr: Do they have night service?
John Wilson: Yeah. So when he first launched, he was doing stuff at 6 a. m. for us. I don't know if, and his biggest client was, this was right when Amazon launched that like franchise.
John Wilson: I don't know if they're still doing that or if it's corporate, Amazon has They got rid of FedEx doing the routes and they now have the Amazon routes franchise. So his biggest contract was those guys. So he would go, they're putting miles on those vehicles because all they do is drive.
John Wilson: So he would go there every other Tuesday and swap a bunch of tires, do a bunch of oil changes. And it was just this recurring. situation. He had to do that at four in the morning because they start, those trucks start running early. But yeah, like I think that's the beauty of this business.
John Wilson: I think the homeowner part, if you want to just be you like a one guy in a truck, I'm going to go do some stuff. Totally. Target some homeowners. You'll probably make a good living. If you want to make a business fleet, seems like the only way to make this happen.
Jack Carr: Yeah. Cause if you're targeting homeowners, you do two cars at once.
Jack Carr: That's 500 probably, say just for math sake, 50 percent margin. But it's also
John Wilson: like hard to schedule. Cause it's only one versus Hey, once a month on Tuesdays, he can come out to my place.
Jack Carr: Yeah. To make a living on that though. Cause it's not like a, really a reoccurring service. It's every once every quarter, maybe once every six months you're getting your oil changed for B2C.
Jack Carr: So you're looking at 250 bucks. So it's 500 a year. I was, you need a hundred clients to make 50 K, that and that doesn't sound undoable, but that's definitely a bit of a grind in the beginning to get that momentum to actually make it work.
John Wilson: Yeah. I feel like if I was launching this, um, you focus on fleets, what's
Jack Carr: what in your area, what's that market saturation look like for these kinds of fleet or have you not look just because this is your buddy, you're going to go with them no matter what.
John Wilson: So honestly when he launched, I had never even heard of this. Like I, Goodyear has one. So Goodyear's. Based in Akron, but they have a few tire shops here and they have something called a roll and I think it's just a part of the retail shops, but that's mainly focused on homeowners besides these guys, I don't know another mobile oil change service.
John Wilson: There might be one, but when we first signed up with them, we looked around for others to bid him against other things, make sure that this was reasonable. Are we in the right ballpark? And there was nobody else to bid against.
Jack Carr: That's neat. Yeah. Yeah. I could imagine that works a lot better.
Jack Carr: Like you said, it works a lot better for Goodyear works a lot better for Jiffy Lube. If they started one, like B2C is a perfect market for someone who already has a giant tire or oil change shelf.
John Wilson: It just opens up distribution. It like I, there's just no world where I'm going to take my car to a mechanic and drop it off for a couple of days to do something that they could do at my house.
John Wilson: Yeah, man, if
Jack Carr: you had realistically, if you had a killer really good cold emailer, you could blow this up in, in no time. You get a VA comes through, gives you a list of just local businesses in the area that they take off the chamber of commerce. And then someone just comes through with cold email and just apparently they're franchising too.
John Wilson: Oh, are they? That's I guess that's cool, but yeah, I'm super into it. They ended up partnering up with our fleet manager enterprise. And that way just made all of our billing easy, but to me, this is an easy business to start. You get in, you start seeking out B2B clients that have like reasonably sized fleets, like anything, 10 and above is probably good.
John Wilson: But no, if you could get into a 50 and above fleet, that's a. That's every month or every two weeks client and you build up like 10 of those and then, you know, you've got yourself a business.
Jack Carr: Yeah, definitely. I'm a big fan. I like this one.
John Wilson: Yeah. I think I threw some rough economics and I was just going to say what the numbers look like.
John Wilson: Yeah. So oil changes around 75 bucks. So if you're doing mobile oil changes, I think that's where it makes sense if you're doing fleet, I'm struggling with not doing fleet. So I don't know how that makes sense. If you're not doing fleet tarot changes around 500 bucks. If you do all four. All four tires.
John Wilson: So that one makes a little bit more sense is like a go to retail. The, they do the same rough upsells as in, they just take a look. So Hey, what's your up, what's your air filter look like? If you went to some five minute oil change shop, it'd be roughly the same stuff. So they have that opportunity to, they try to keep the trucks lean though. But I think it, I like to think of it as those five minute oil change shops, just mobile and more convenient.
Jack Carr: Do they try to upcharge you for like when you're at a mobile shop, they'll say, You got your standard, you got your bronze, your silver, your gold. So this
John Wilson: guy does not do that, but I think he's mainly because he's dealing mostly B2B, he's dealing with fleet managers who are just going to call him on shit.
Jack Carr: Like it's just like a different
John Wilson: selling proposition. It's not someone's changing like my Toyota's filter.
Jack Carr: Wait, you drive a tight Toyota. Yeah,
John Wilson: it's a Highlander. Honestly, that thing is great. Like I love it.
Jack Carr: I love Toyota. And that was, I've owned like three or four, but I've switched.
John Wilson: It's a great car. I've been in a Tesla for a little while, but her car is the Toyota. And yeah, it's great. It's a good family car.
Jack Carr: I've been joking. I said, we're going to throw those 30 foot ladders on the top of a Tesla and wrap them three or four of them running around town as a service vehicles. And
John Wilson: we're eco friendly.
Jack Carr: Yeah, exactly. Tell me that wouldn't be a good marketing strategy. That'd be so funny. I
John Wilson: don't know if it'd be good or bad, cause people would also think like, all right, I'm paying too much. Dude's driving a Tesla up to my house.
Jack Carr: No Tesla truck. Just what is it? Model threes.
John Wilson: Yeah. So rough numbers a month.
John Wilson: These trucks are producing like 20 to 30 grand a month. They're very low overhead and it's mainly just cogs. It's just a guy in a truck. I think you can launch it on your own. I think that because of the demand of fleet, it's probably easier to like, hey, how do we get to 20 clients as quick as possible so we can have two or three guys.
John Wilson: Cause you know, you don't want to be the guy that gets up at two in the morning every day to go change the fleet oil. I think just like every other truck based business out there, like the magic number starts at three, you get three trucks on the road and you've got yourself a business. Anything before that, it's a lot more like owner in the truck, which I just think is hard. So that's pretty common. And then you'd have a, about a million dollar business when you get to that three trucks on the road. My rating, I thought this was like a four. I think it's easy to launch. I think it could be really good as a standalone service. I it's been good for my buddy. But I think it's also sweet if you're tacking it on to an active operation.
John Wilson: I think that could be cool. I don't think it's very expensive to launch. I think this dude set up a rig when he launched, like he's got a real setup going on. But I think you could just launch with a truck. But when I talked to him his writ, his buildout was 20 grand and the truck was 50. So he had 70, 000 total.
John Wilson: And he was able to cap that all into the loan on the, on that vehicle. Maybe he had 10 grand out of pocket for a down payment. And then you start chasing down clients to pay for the monthly note, and he ran it out of his garage for the first couple of months.
Jack Carr: Did he launch with both tire and oil change?
John Wilson: Yep, he launched off the rip with that.
Jack Carr: There we go. I like it. Yeah, I'm probably gonna give this business I'm thinking, I want to say it's easier, but I bet it comes just to get to that relief that first like the zero to one on this is a lot harder Then I
John Wilson: he said that too And I see I don't know what it's like I've never done like a B to B sales thing, like similar to the deal you brought up or this one.
John Wilson: But when I heard about this deal as an owner, I was like, That is a literal no brainer. That took no brain cells to say yes to that. Like it's non contractual it's keeping my trucks on the road. It's keeping my techs moving and it's literally cheaper. So it felt like a really easy sales prop to me.
John Wilson: But what he said was he agreed with what you just said was it was very difficult to get those first two or three clients. I think we, we were his third client and he had been at it for a couple of months and just striking out. On that now, I don't know if that's due to his background was not in B2B sales.
John Wilson: His background was in the restaurant management. So maybe he just, maybe a few of those months was just figuring out how to do cold calls on businesses.
Jack Carr: Yeah. Yeah.
John Wilson: If it was me, go join a BNI and just knock on like a bunch of plumber stores and someone's going to say, yeah, cause it's just, saving the money.
Jack Carr: Definitely. What about stickiness? How do you feel like on a rating of stickiness of one to 10, if you had another guy come along and was like, man I'm newer, I'm starting up. I'll cut $10 off the oil change per truck. Is it worth it to you? Or, Ooh, is it already so low and you trust this guy so much that you'd stay with him?
John Wilson: That is a good question. It's probably not that sticky, but I also, yeah, it's not, yeah, you're right. It's not too sticky. Cause yeah, it's non constructual, if we get a better thing and then we'll do it. But and if the new guy messes up,
Jack Carr: you just go back to the guy you're working with now.
Jack Carr: So it's not it's not like a bridge burn to, to change over.
John Wilson: Yeah. And I think if you're a big fleet, like on one hand I was like, Oh, the customers, what's the customer service look like? Are they going to jump through hoops to make sure your fleet stays on the road? But if you're a big client.
John Wilson: Yeah. They're going to do that anyways. That's the only way that they, that you would switch is like, Hey, are you going to come at three in the morning? Cause we're not talking if you don't.
Jack Carr: Yeah, exactly. Part of the business. Yeah. That would be my one worry is, you get these big contracts like Amazon.
Jack Carr: I saw that when I worked at a free delay and Pepsi a lot is when you get these large volume contracts, much, I'm sure like, I guess someone came along and offer 50 an hour to do that handyman business. The backend on that handyman business, there was a lot of actually they had a full time.
Jack Carr: Programmer on that business that they subbed out to, to build that entire backend system for the work order flow to flow from their system API system. But money talks, especially on high volume. And so for the Amazon contract, I could see 10 an hour, something really. 10 a car really making a difference.
John Wilson: It stacks up. For us, it was a cost exercise to switch to them. So it would be a cost exercise if we switched off. Like some of the stuff is just math.
Jack Carr: Yeah.
John Wilson: So yeah, you are right. Stickiness would be a problem. So you'd always just have to continue closing. Now that said, we've been with them for four or five years and it's also cause no one else has approached us.
John Wilson: Like we've never even had the opportunity to bid it out. So I think that. Sickness might be a problem, but I don't know. I have 85 trucks on the road and nobody else has called on us. So I just don't think there's a lot of them out there.
Jack Carr: Yeah. I like this business. If I was starting, this is definitely one that I would think about.
Jack Carr: It's difficult in the beginning, but once you get that three, four customers you're pretty much
John Wilson: there. Yeah, you've got a route. And the one thing I didn't get was how, like, how many customers is a route? Is that 10 is that 20 what's that really look like? Cause I, I think that's, I think the route based business is interesting where you can just fill up to a hundred percent capacity.
John Wilson: And then you just go build another route. I think that's cool. That's what we do with Septic. And I like it. Okay. So cool. Awesome. We, yeah, we like this one. You said you brought another terrible deal of the week. What do you got for us?
Jack Carr: I'm pumped. This one's brought to you by Twitter friends.
Jack Carr: Someone was actually posted about the worst deal you've ever seen. And this guy was just tearing this company up and that guy's Hey, can you send me just not the information, but just the offer. And so you have something
John Wilson: you can share. Yeah. So that's what I'm sharing. The screen, share the screen.
John Wilson: Sorry, everyone. I'm still learning how to screen share. Supposedly this is up in my neck of the woods too. Like I'm ready to go. What did, how'd you say Medina? Medina. Yeah. So that's like a few minutes from my home. I should probably delete some of this info out of
Jack Carr: here. Someone's going to need to edit that out later.
Jack Carr: Yeah. Yeah. Blur that out. If for anyone just listening and not watching, my phone number did pop up on the screen because I am a big user of BizBuySale and so it auto populates. Yeah. But it makes total sense. Anyway, this is a industrial manufacturing business. So don't know what it is. Don't really care what it is, but it does gross revenue of 750, 000 with the EBITDA of 140, 000.
Jack Carr: And that's not including real estate, three employees maybe a two to three year transition, but we're still looking at a six X on a sub 1 million gross business.
John Wilson: What's the attached doc? What are they showing us here? We've got like a mini teaser. Here we go.
Jack Carr: Yeah. Little mini teaser, industrial hardware.
Jack Carr: Not much more than what the ad said. So the listing agent and everything, just your generalistic picture. I don't know if it's a actual picture or if it's a stock photo, but it's a guy working on a drill press with a lathe in the background probably making some kind of, uh, metal piece, some trinket of some sort, but I just can't imagine that at any point in time you're paying for a sub 1 million business.
Jack Carr: Plus in, maybe rich or someone else could talk more to this, but in one of these kinds of businesses at 1. 1 million in real estate, it's important here, right? You're removing all that equipment.
John Wilson: Yeah. Yeah. This isn't, this is an interesting one. I know when Reg does a lot of his deals, Like they end up, the real estate ends up being a large portion of the deal, which is honestly sweet.
John Wilson: Like I'm a little mad about it because like you can just go get a mortgage. Like for our business, we have a real scaling problem where like lending is like buying businesses, cashflow. Whatever. And if you can build your business off of using 25 year commercial mortgages, like that's a sweet gig.
John Wilson: That said, I don't know how the hell you would pay. Real estate plus business is 1.85 for something that's cash flowing. 140.
Jack Carr: Yeah. Not to mention, okay, you're looking at 140. Yeah. Cash flow and 140, that's not gonna cover even close to. To covering that, that I don't, you couldn't get a loan on this business is what I'm saying.
Jack Carr: That was a DSCR when I don't think that would even come close
John Wilson: to anything. No, I don't think so either. And I wonder if industrial hardware, like we, we did a couple of years ago, we did. We did a job where we installed pneumatic lines, like airlines into a factory that was making screws, which is like, anybody can make screws.
John Wilson: And I, I wonder if that's, if it's also just like very undifferentiated product line.
Jack Carr: Yeah, it'd be interesting to see behind the curtain on this one and why they're doing this. Or maybe it's just, it wasn't done right, or they're over, over evaluating. He is. Yeah. According to this, it's the listing agent is a real estate agent and a consultant.
Jack Carr: So
John Wilson: Oh man, .
Jack Carr: So
John Wilson: That's how you know something got mispriced. I love it. Yeah. I love when a real estate agent is trying to sell business.
Jack Carr: Yeah. It's, it can be rough out there sometimes, especially for them. There is a big real estate as aspect to this, but my guess is the guy went to him, said, Hey, I got a 1.1 piece of real estate.
Jack Carr: Dollar piece of real estate and a business too. And the business is there also. Can you sell them together? Yeah, totally. I'll take 15 percent on the whole thing. I'd like to bring up that I said rich instead of rich, but I'm going to stand by that and start calling him rich just because of all the crap he was giving me.
Jack Carr: Yeah, that's on Twitter so that you guys can see the beef. Yeah, no I, this one's for you, rich. Yeah,
John Wilson: that's great. Yeah, you're right. That was a terrible deal. I'm glad you brought that one. I'm going to bring a terrible one next week.
Jack Carr: Yeah. Yeah. Anyone in this industry, let us know or are we missing something?
Jack Carr: Are we on point here? As always DM John, let him know if I'm being an idiot or if that's the greatest deal you've ever seen. They're minting gold cash offers. Exactly. It's already off market, which it's not. So it's still on the market.
John Wilson: Perfect.
Jack Carr: Anyway. All right. So
John Wilson: today we went over a, yeah, we went over tire taxi.
John Wilson: We went over property management external handyman service, and we talked about a terrible deal. That was a great episode. Good stuff. Yep. Thanks everyone for staying tuned. Check out next week. Adios.
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