Owned and Operated #217 We Hit $1M Profit — Here’s Exactly How We Did It

In this episode of Jackquisitions, host Jack Carr sits down with Chris Barr, a first-time buyer navigating the ups and downs of business acquisitions—from walking away from bad fits to crafting a $900K cash-plus-earnout offer for a pressure washing company.
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In this episode of Owned and Operated, John and Jack return to the studio to tackle the real-world challenges of running a successful HVAC business during peak summer heat. They dive into how weather-related service demand, infrastructure upgrades, and a mature home service team contribute to record-breaking weekly revenues and improved operational efficiency.

Discover how HVAC businesses can scale profitably by investing in technician retention, labor-saving automations, and strategic overseas staffing. John and Jack break down the processes that drive high performance—from sales training to data-driven decisions—all on the path to hitting their first $1 million in EBITDA and a $10 million annual revenue goal.

🔹 In This Episode, We Cover:
How scorching weather exposes weak HVAC infrastructure
Building mature teams and repeatable procedures for scale
Tracking metrics weekly to hit revenue and EBITDA milestones
Streamlining sales processes & technician training for efficiency
Leveraging data, automations, and overseas staff to cut costs
Creating an environment that keeps top technicians around
The roadmap to $10 million in revenue—next-year outlook

🌐 More resources

💼 Special Thanks to Service Scalers!

We’ve been partnering with Service Scalers to maximize our Local Service Ads (LSAs) and optimize our Google My Business profiles, and the results have been incredible. With hundreds of thousands in sales and 900+ calls in a single week, GMBs are now our top-performing organic lead channel.

Want to learn how Service Scalers can do the same for you?

🔗Check Them Out Here


💡 Special Thanks to Modernize!

We've been using Modernize for our water quality leads, and it's been a game-changer. If you’re serious about growing your business with better water quality leads, HVAC leads, or home improvement leads, check them out:

🔗 Get Quality Leads Here


👤 Hosts:
John WilsonJack Carr

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217 Transcript

John Wilson: [00:00:00] Real talk revenue doesn't matter. EBITDA is the value. EBITDA is how your business is valued. So when you want to go sell your business or when you wanna bring on partners, when you go do whatever your life involves, nobody's gonna give you for a bunch of revenue and no profit. 

Jack Carr: You optimize for growth.

Are you optimized for profit? There's really no in-between. To get to your first million in ebitda, what does that look like? What are the big steps to cross that threshold? 

John Wilson: Here's the secret sauce. 

Jack Carr: I'm ready.

This a welcome back situation. Dude. Welcome back. Welcome back. Appreciate you. Just welcomed us back. Welcome back. Welcome back into studio for me and welcome back to Owned and 

John Wilson: Operated. Yeah. Dude, I'm pumped. Yeah, me too. That first second that reminded me of like Waynes world. 

Jack Carr: Waynes World all the time.

Yeah. Yeah. You're aging us. 

John Wilson: Uh, yeah, I am. Yeah, I am. Uh, 91 baby, dude. What's going on? It's uh, June. Mm-hmm. It's, [00:01:00] well, you know, I think last time we talked last week, it was not yet hot as balls. Correct. It is now hot as balls, specifically Satan's balls. That is 

Jack Carr: a term. That's term. That's a degree. 

John Wilson: It's good.

It's 

Jack Carr: a degree. It's on the, it's on the thermometer. Satan's balls. It's, yep. Right above like 90 degrees in humid. Yeah. I think it gets into that range and then for some reason it just absolutely destroys all HVAC units. Lose first nuts. I love it. It's incredible. 

John Wilson: The month is actually going okay, like June started off.

Slow. Mm-hmm. I would say slow. Um, but like, we're actually doing okay. Like we're gonna be within five points of budget. Yeah. Which felt pretty good. What, what we're finding, which is kind of interesting, is the further we get the easier, I'm air quoting if you're not watching the, uh, YouTube, but it. The easier it gets.

So like we did a $610,000 week last week. Mm-hmm. And it just felt like a normal week for us. 

Jack Carr: Oh. '

John Wilson: cause 

Jack Carr: like infrastructure was in 

John Wilson: [00:02:00] place. Yeah. Just like good enough. That makes sense. So it's like, okay, just a little bit more. A little bit more. Mm-hmm. Bit more. So that's been really interesting as the team has matured enough.

And our manager said that too, like our HVAC manager, like we had a blowout week last week in hvac, like 50% more volume than, than the previous week. And he was like, honestly, it felt like fine. And I was like. Yeah, 

Jack Carr: that's wild because like we're on the other side of that where we're having great weeks.

We're gonna, we're ahead of Well, you, it's Hercule, we're ahead, ahead of budget, but like now we're going, everyone's f how do we Yes. Yeah. The, the crazy part too, that was this 

John Wilson: last year. 

Jack Carr: Yeah. Just 

John Wilson: like we felt like everyone was pushing a boulder up a mountain. Mm-hmm. And now it's like, I think the boulder's rolling down the mountain.

Like it's just like, okay, if you've been listening to the show for a while, you know that we've been big fans of service scalers. One of the things that they just dropped that we are really excited about is a pay lead program. So what they help you do is they help you directly gain access to leads and scale up your lead partner program.[00:03:00] 

Go to service scalers.com and say we sent you. 

Jack Carr: Well, the cool part though is like we, what did what, where I will agree with you is like we've been focusing a lot on sales process and technician training and service, and so the sale process has actually gotten much easier for us. Our guys are doing flips better, we're converting better, but now it's that that.

Like how do you handle all that data and afterward and get it to the installers and how do you install quickly and properly? Yeah, and follow up and like small jobs, big jobs. It's a lot. And so from a capacity standpoint, that's where we're starting to feel it is just going, wow, we've gotten so good at this side of the puzzle, now we have to figure out the other side of the puzzle.

Mm-hmm. Which is. Equally important, if not more important. Yeah. Right. Because if you, you can sell to the cows, come home, but if you can't install it, yeah. It's not worth it. Like it's more trouble. Yeah. So I, 

John Wilson: I agree. So interesting. Good. Like I think the teams there we're ready. Uh, the way our years have historically worked is the first six months of the year is one third of our [00:04:00] revenue, and the back six months is two thirds.

Mm-hmm. So July is next week. So we're basically getting ready for the actual money part of the year, which we're pretty excited about. June was, I hope we do that pretty close within, like is it, it's not the same for you? Uh, I think I don't, ours is very one, I break it down by months. One start in the first six months.

Yeah. Two thirds in the back six. So like last year, 100% of our profit was driven from July to December. Mm-hmm. What's gonna be fascinating this year is we're going into July. At 1.7 of ebitda. Yeah. Which like last year we went into July at negative a million. 

Jack Carr: So that's what I was gonna say is the more interesting part is I'm looking at businesses, we're trying to acquire businesses as usual.

Yeah. And I see businesses and I'm like looking at it with the, the most interesting take of like, this is a great HVAC company, it's doing $3 million or whatever. And you look at it's like. P and L on a monthly basis. It's lost loss. Loss, loss. And then June hits or may hits and they, 800,000. Yeah, they make like [00:05:00] 150,000, then 80,000, then 90,000 and then lost loss and then, you know, 200,000 and then 100,000.

And like HVAC's tough. They, this is why, this is why 

John Wilson: I think HVAC's 

Jack Carr: tough, but like more months were lost is 

John Wilson: than gains. It's, which is crazy. Well, you know, we set out this huge target, um. We saw this huge target that we, that we hit of 12 straight profitable months. 

Jack Carr: Yeah. 

John Wilson: And if you're an hvac, you know that that's not a thing.

Uh, so, and we achieved it. So from, from, uh, may through April, which 12 straight profitable months, and now we're on so hard, we're finishing up May, uh, we're finishing up month 14. 

Jack Carr: Yeah. 

John Wilson: Of like straight in the black, which is great. And like the number's been as high as 17 and as low as five. It still fit, hitting in the black every time, which is crazy.

Totally crazy. I mean, it is been a huge win. Um, but what we were gonna talk about today was how to make your first million dollars, specifically making your first million dollars. Mm-hmm. Of profit, of ebitda. [00:06:00] Oh, ebitda, not of revenue. Like make your first million dollars of revenue. Like, go get it. But yeah, let's talk ebitda.

Jack Carr: That's the, it's the harder number, right? Obviously. 'cause that means that your business is probably, if your hvac, plumbing, electrical, your business is what, somewhere around that. $5 million in gross revenue mark to get there. Running at about what? 20 man, I mean, that would be lean for first million. Have you seen it?

Have you seen million? Oh, so that'd be like 20%. If you're at 20%, that would be what, seven. 800,000. Then my math is not gonna be there. 

John Wilson: I mean, I'm sure someone out there is driving a million bucks on 5 million of revenue. 

Jack Carr: Mm-hmm. 

John Wilson: I have personally not seen it. 

Jack Carr: No. I'm sure someone is. We're only gonna be at.

Half of that. So you'd probably have to get double. So it's probably closer to 10, maybe a little bit less than 10, I think 

John Wilson: eight to 10. 

Jack Carr: Eight to 10, yeah. Because then if you're running a 10 to 15%, that's probably in the ballpark. 

John Wilson: Now granted we didn't hit a million Yeah. In EBITDA when we were eight to 10, but I think because of how we were growing, we bought our way from four mm-hmm.

To like 11, and then we were in J Curve. [00:07:00] So J Curve is when you're in the, you know, you're. Investing back into your operations and it can either be organic or I think it's talked about a lot acquisitions, like you bought something, you invest, you j curved down in profit it. So that's what happened in this case.

Yeah, so we bought three companies. We invested a ton. We j curved down in profit, so we only hit a million EBITDA last year and that was at like 20 something. 

Jack Carr: Yeah, that's what I was gonna say. Like high growth when you're, when you're in high growth mode. Yeah. It's so hard to hit it because you're buying trucks, you're buying, well, trucks are CapEx.

CapEx, excuse me. But still, you're buying usually people investing in marketing and people and training bigger facilities that you're 

John Wilson: leasing, not owning. So that's stuff that would impact Correct. You know, if I bought a building that, you know, that could artificially inflate mm-hmm. By ebitda if, uh. If we weren't investing in people that could inflate ebitda.

Jack Carr: Yeah. Um, 

John Wilson: yeah. 

Jack Carr: So yeah. High growth. I mean, you're probably putting more into marketing than you need to be. Yeah. Running, you know, 11, [00:08:00] 12, 13, 15% if you really wanna get there. Yeah. There's companies that are 

John Wilson: growing like crazy right now. Yeah. Uh, apex down in Columbus, uh, Sammy, he, he just did a show. Uh, and I, I listened to part of it and they're growing like crazy.

They're, you know, 40 million bucks and they started like five years ago. Like, they're moving quick. They're like top line, right? 

Jack Carr: Yeah. 

John Wilson: And, uh, so it's awesome. He's doing a great job, but they're a $40 million business spending 15% on marketing. Yeah. Like, that's a lot. Huge. Like, no matter what way you spend it, that's a lot.

And, um, and that's probably most of their ebitda. Mm-hmm. And they're good with it. Uh, obviously, like they're gonna eventually flip. To optimizing for profit. But that is a sacrifice for the moment 

Jack Carr: because you, 'cause you get two, there's two really two options, right? You optimize for growth or you optimize for profit.

There's really no in-between. 

John Wilson: Um, well, about a year ago we switched from growth to profit. 

Jack Carr: Mm-hmm. 

John Wilson: And, um, at the time, kind of nerve wracking you, it's, you have to separate your, or I have to separate myself. Maybe other people are better at this than me, but I had to really like ego out of the [00:09:00] equation. Uh, revenue doesn't matter.

Yeah. Like real talk revenue doesn't matter. I, I think on, on one hand, it's like, cool and it's fun and it's all that stuff. But e like EBITDA is the value. 

Jack Carr: Yeah. 

John Wilson: EBITDA is how your business is valued. So when you wanna go sell your business or when you wanna bring on partners, when you go do whatever your life involves 

Jack Carr: mm-hmm.

John Wilson: Nobody's gonna give you shit for a bunch of revenue and no profit. But if you're running 5 million of ebitda. Then that business is worth something. 

Jack Carr: If you run 1 million in ebitda, that business is worth something. Yeah. Yes. I mean that's, that's generally, like I, I've talked about this before. It's a threshold.

It's like that's the big threshold. 

John Wilson: Yeah. So it's one, two and a half, five. Mm-hmm. 10 20 or, or like the thresholds Yeah. Of like big value. We're like, once you cross those, uh, you know, different level of buyer, different type of, mm-hmm. Uh, usually another turn or two on the multiple. 

Jack Carr: Yeah, exactly. And so [00:10:00] to, to get to your first million in ebitda, I mean, we aren't there yet.

What, what does that look like? What are the big steps to cross that, that threshold? Yeah. I mean, first as much as revenue, doesn't matter, revenue at some point matters. 'cause EBITDA generally is a percentage. Yes. Like you don't remember hundred percent ebitda, I think sustainable. 

John Wilson: Yeah. So I something that, um, let's use that example of like the $5 million company running a million of ebitda.

That's not a sustainable 1 million to people. Yeah. So if somebody approached me with that deal, I was like, Hey, do you wanna buy this for an eight times? I'd be like, fuck. Like gold. Fuck yourself. Absolutely not. Like you running at 20% margins at 5 million bucks. 

Jack Carr: Yeah. 

John Wilson: All that's telling me is you didn't invest in anything.

Like you have literally done nothing and now I have to come in and that million is gonna turn into 400,000 real quick. Yeah. Like, oh, you're not driving leads or you don't have anyone in the office, and AI runs it all. And you know. Like, someone's gonna have to get hired. 

Jack Carr: So, um, as much as people wanna pretend that their business is really optimized Yeah.

And [00:11:00] that the owner doesn't work, and that they're getting 1 million EBITDA at 25%, it's like, it's not real. Well, you can now this, 

John Wilson: here's what you can, I'm just saying, 

Jack Carr: here's 

John Wilson: the secret sauce. I've never seen it. Here's the secret sauce. 

Jack Carr: I'm ready, I'm backing up. 

John Wilson: Yeah. Yeah. It, this is, this is good. And I think we'll talk about different layers at some point, but like, yeah, we're talking about a million of EBITDA today.

Jack Carr: Mm-hmm. 

John Wilson: But when you cross five to 10 million of ebitda. You can again be at 25%. It's just this time it's real. Yeah. So like 25%, there's companies doing $40 million with a 25% bottom line. See, but that, that makes 

Jack Carr: sense 

John Wilson: to you in 

Jack Carr: plumbing, hvac. Right. But that makes sense because you have, you have buying power that's Yes.

So you're, well, you outgrew your overhead. 

John Wilson: Yep. You have buying power. Mm-hmm. You might have like geographic distribution. Yep. And you need almost no overhead at some of those new branches. Mm-hmm. 

Jack Carr: Uh, economies of scale is 

John Wilson: totally 

Jack Carr: just absolutely nuts. 

John Wilson: I mean, we outgrew our overhead last year. Yeah. I think I talked about this a lot.

Yeah. On the show. Hey, our overhead for quarter one [00:12:00] was literally less dollars. Mm-hmm. And we drove 3 million more dollars to the top. Like, that's crazy. 

Jack Carr: Yeah. And you've talked about this too, um, like you're able to pull levers like, Hey, I'm, I've gotten, we call it turn dials now. Turn dials. Now you. Thanks Jack for telling Jesse and, and John that that was good.

Um, I like that. But turning, I, I actually think it is a lever in this case though. You're like, Hey, the lever's, weekends, boom. My lever is this specific initiative that we're gonna do. Yeah. And hey, boom, we pull that lever and then out comes 5 million. 

John Wilson: Yeah. 

Jack Carr: Like, don't, it's much more difficult than that. But like the reality of it is, is I do think that there's more.

Can, there can be more focus on like, Hey, we're gonna tweak this thing. Yeah. And turn on weekends or, or start selling this additional product and it just absolutely expands 'cause there's no more overhead needed Weekends. Yes. But like adding an additional product line. Yeah. Not really. [00:13:00] Right? Yeah. Um, outside of maybe some training on the new product and installation training.

Yeah. But realistically, like there are these levers you can start pulling. Yeah. There's really tiny ones that I feel now and I'm like, oh, that was a lever That feels so good. This is huge. Uh, and it like produces a hundred extra K, but that's something. It's something and that's how you grow. Yeah. So being able to see those levers, 

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Whether you've maxed out LSAs or you need leads to fill a revenue gap, modernize is your growth lever from inquiry to install. Click the link below to start [00:14:00] driving consistent growth with modernize. So for, so I think crossing a million is, is is bru. It's brute force. Yeah. I think that first million is brute force.

Like it takes so much more work mm-hmm. For someone to go like cross their first million than for me to add another million to b bda da. Yeah. Like our, our budget this year was about 5 million of ebitda. We are roughly pacing like 4.8 maybe, but like, we're feeling pretty good about it. So if I, like next year, we're expecting to go from like 4.85 to like seven eight, because it, it's just sort of like turning dial.

Yeah. Right. It's like, okay, we are lean here. Let's continue experimenting here. We think we could drop a hundred thousand of expense here, but that first million is just, it's brute force. The owner's gonna be carrying a lot of weight. Yep. You're gonna have a lean management structure. Uh, a lot of automation and pricing jobs.

Well, like what, what we've consistently learned in our business is like we're a [00:15:00] gross profit business. Yeah. So when I was, when I was growing, like the under 10, uh, overhead was always too high. Like every metric I ever looked at our overhead was like. I mean, there's years, not like months, but years where, where like old John over here Yeah.

Ran a 45 to 48% overhead. 

Jack Carr: Yeah. 

John Wilson: So like, and like gross margin was 50. 

Jack Carr: Yeah. 

John Wilson: Like I had 2% years 

Jack Carr: and um, I mean that was like ours last year though. We, we grew a hundred percent, but our net at the end of the year was, was dog shit. 5%. Totally. Which is great for growth, but man, does that hurt? Oh 

John Wilson: yeah. 

Jack Carr: When you look at any other metric, if you look at like, Hey, we lost this job because of X, Y, or Z to make up the loss on that job, a contractor doesn't pay 'cause you're doing some GM stuff that you shouldn't be doing.

Yeah. Like you miss out on 10, the 10 K that, that, that, uh, GCO owes you. 

John Wilson: Yeah. 

Jack Carr: Like to make that up. Yeah. Stupid. Like five at 5% net's. Absolutely stupid. [00:16:00] Yeah. So, so I, I think, but sorry, diatribe, but well, I, I think get, 

John Wilson: get revenue big enough to be Yeah. Uh, real is probably the first one. 'cause I think the danger of trying to optimize for EBITDA too early.

I do think there's a danger, like at $5 million, if you're running a million of ebitda, like I said, you are just under investing. 

Jack Carr: Yeah. 

John Wilson: So that's not sustainable. So when you want to go back to growing and make the business actually saleable, like a good thing to get, you know, move on with your life, uh, who's gonna buy it at, at that, at that, at the multiple you're looking for.

Yeah. Because if anyone's gonna look at that and say. It's too small and that million of EBITDA is actually 500,000. Yeah. And like everyone knows it, you know, this is fake. So I think that's why it's brute force is you have to get to a more reasonable number. 8 million, a million of EBITDA feels really healthy to me.

Yeah. 10 million, a million of EBITDA feels like, okay. Uh, you're probably investing in growth right now. [00:17:00] 10 million's a hard threshold. Yeah. So I think the first one is like brute force. Get the company bigger. And 

Jack Carr: the easy way to do that is just to buy your way through it. 

John Wilson: It's certainly faster. I don't know that I would say easier, but definitely faster.

Jack Carr: I mean there, there's huge step changes that come at that 5 million mark and 7.5 million mark just from like management and like you're saying, running 48% overhead at a two or 3% net Yeah. Just is so difficult. It's tough. It's so painful. It's tough. So, 

John Wilson: well, and you know, we contrast that now, like our overhead's like 34% or 33%.

Yeah. On a strong month, it might be 32, 31. I hate that for, and, and so it's sort of like we literally just outgrew it. Like we just outgrew it. It's fucking awesome. Mm-hmm. Loved everything about it. But yeah, so I think get big enough root force your way to, to getting big. I think you can optimize on the way up in stuff that like literally didn't exist.

Jack Carr: Yeah, definitely five years ago. A hundred percent. But it, that's, that's an [00:18:00] optimization for like. Hey, I need more money to then put back into marketing, or I need more money to, yeah. To pay technicians. It's not a, you're not reducing expenses to Yeah. You're just, you're to increase. Yeah. You're just shifting it somewhere else.

Yeah. So it ends up not really mattering. Like we, we, I mean, we talk about this often is I shift, shift off most of my, um, labor in the office to to international contractors. 

John Wilson: Yes. 

Jack Carr: And all that money goes into marketing or into paying totally. Technicians more. Yeah. Because. Recruitment's so hard, like you have to pay the technicians better to bring them in, et cetera, et cetera.

So like, how do we find that? And I think that's part of the brute force though, is, is, is just understanding that none of that money goes into my pocket. It all goes Yeah. Straight into growth initiatives. Yeah. 

John Wilson: Yeah. I think, uh, the, the next thing that will hit growth growth initiatives is it there's a data component that we didn't dial until like two.

Mm-hmm. Now granted, we'd styled in now. But we should have done it earlier. Yeah. And that was ROI [00:19:00] of, of those growth efforts, like is the thing we're investing that hard earned cash? Is it doing what we want? 

Jack Carr: I hate that you're saying that. 

John Wilson: Yeah. 

Jack Carr: Because I know it's something I don't do as well as I should.

John Wilson: Yeah, we're locked. Yeah, we are locked in on it. Uh, maybe after this I'll show you the spreadsheets, but it's really interesting. Yeah. We got that locked in to the point now where it's like a, so like someone in the Philippines actually like. Like do all of it. Mm-hmm. Which is kind of amazing. Um, so I, I, yeah.

I think really locking in like ROI on your marketing spend, is it doing what I want? 

Jack Carr: Yeah. 

John Wilson: Uh, is this investment doing what I want? 

Jack Carr: There's a backside to that too. 'cause like we do some ROI work, but the other part to it is actually having the individuals. Or having the systems and processes in place to turn on and off.

'cause I think, I think, uh, smaller contractors, a lot of the time they think that, you know, the more leads the better. Yeah. But I've seen your team and they're [00:20:00] animals. Absolute animals Marketing is a contact sport. Your, your marketing team. I'm in love with the, the whole team. Have you attended any of the huddles?

Uh, no, but I, I, I go in there and just bug 'em and like, what do you guys do with LSA? What are you guys doing with this dude? What? And they're like, oh, we turned this on and this off and we're modulating this and doing this. And I'm like. 

John Wilson: It is ly best defined as a contact sport. 

Jack Carr: Yeah. Like it is a contact sport, but they're very active in, in, in managing a hundred percent.

And so me, as, as the person, I don't, well, it's a 

John Wilson: $2 million budget. Yeah. So if we don't, if we don't manage that, so we, we have the opposite problem that most people have. Yeah. There's unlimited leads. Yeah. Like we talked, we got in a, you know, heated discussion about this today. No, don't bring this back up.

Don't bring this back up. But there are, there are unlimited leads. Yeah. And all you have to do is find the different ways to, to get them, which. I don't think is that hard. It's maybe challenging, but like it's not that hard. Anyone can do it. So I think you can go out and you get, we, we have 15 lead partners now.

Jack Carr: Yeah, 

John Wilson: that's [00:21:00] a lot. Like most companies are like one to three channels, one to two channels. We were one to two channels until 2023 

Jack Carr: before people go out and get 15 lead channels. Though I would say that probably keeping it too manageable. Yeah, keep, don't worry about that. But 

John Wilson: my point is with 15 lead channels.

And they're all have leads. Mm-hmm. You can, you can go well past, yeah. $2 million very quickly. 

Jack Carr: Yeah. 

John Wilson: So we agreed, you know, we've had errors where somebody leaves the lead budget on and we lose 20 grand in a weekend. We just lose it. Yep. Like it's gone to the ether. So we got. That happened one time last year and it happened a few smaller times, but it was $25,000.

Jack Carr: Well, in August. Like we are in this heat wave right now. Oh yeah. We shut it all off that. And that was the thing is like we dropped all I, but it's me. 'cause I don't have marketing people. So that's, that's why it's so important is 'cause it's, I have to go into the system while I'm fighting fires. Yeah. I ran calls this week.

John Wilson: Yeah. 

Jack Carr: So I'm selling units. Yep. Uh, because we lost one of our. Top tech. [00:22:00] So I'm, I'm stepping in at, you know what I mean? Like, it, it's a contact sport because you're also fighting fires at the same time. But you have to remember to turn them off or at least turn them all the way down and they're not always right.

There's, you have 15 lead partners. We have like six. Yeah. Which is a lot to manage. It's a lot. Multiple LSAs. Yeah. Ppc. Yeah. PPC. Yeah. PC is a contact 

John Wilson: sport aggregators. Yeah. 

Jack Carr: And if you leave an aggregator on man. 

John Wilson: They got leads. They got leads, they're gonna for you 

Jack Carr: and, and you're just not gonna go anywhere with them.

Yeah. You're, you're not gonna be able to service 'em. They're gonna cancel or go somewhere else. Yeah. And you're just wasting money. Yeah. 

John Wilson: I So that for us is a million dollar EBITDA gain. 

Jack Carr: Yeah. 

John Wilson: Like that's, that was a really big deal for us was dialing in marketing spend. Yeah. Like we're, we'll do two and a half or 2.6 or something million this month, and I think we spent 170 on marketing, like.

It's locked in. 

Jack Carr: It's amazing. 

John Wilson: Yes. What's that? 6%. 

Jack Carr: Yeah. And so I [00:23:00] think that, I think you're right. That's a huge unlock to be able to do most the ROI is knowing what the R OI is. Where you spending? Yeah, where? Where? It's the ROI. Where you're spending. 'cause I know it's on my list of next things to do. We, it took us a long time, so 

John Wilson: if that makes you feel better.

It did take us like a year to get to the point where you're currently 

Jack Carr: at. I still think though. That the timeframe, how long it takes or how difficult it is, is is partially irrelevant to you needing to do it as a hundred percent most important thing in business. Yeah. That was more of 

John Wilson: like, it's okay that you're not there yet.

I'm not that it's You're not, but like if you start today, it'll be done in a year. Yeah. Because not as cool as me. 

Jack Carr: The reason I say that though, and bring it up is actually a compliment to you in the sense that we started talking about gross profit and figuring. 'cause I know that's what the next, probably the next place you're going is like, know your data, know your gross profit number.

John Wilson: It was gonna be fast reporting. Yeah. 

Jack Carr: Yeah. And, and that was huge. Un unlock for us. Yeah. Like the reason that we're able to do stuff and make the decisions we are today. Yes. Is because we have this fast reporting system and it was hard. Yes. Like it was not [00:24:00] easy, but it's been one of the best things to do for our company.

Yeah. Uh, we went from, like we talked about earlier in the episode, we went from loss, loss, loss, loss, win win, loss loss, win win, and then that was our year to now focusing on Okay. Win, win, win, win. Yeah. Our first quarter being in the worst, the first quarters are terrible. Yeah. We won every month in that quarter.

Yeah, that's right. I think we lost maybe in April. 

John Wilson: Yeah. 

Jack Carr: But January, February, March, win, win, win, April win or may win April loss. And then June's gonna be hopefully a win. Yeah. But like, that's huge 'cause we're making decisions like we're wrapping trucks and we're spending this, this, this expense money on new uniforms mm-hmm.

And branding exercises. And so like. Those are all based on having that good data. Yeah. So that we don't have losses like, well I'd rather, you know, do one track wrap every two months if it doesn't mean that I'm gonna lose that month. 'cause I don't wanna lose ever. Yeah. So, 

John Wilson: yeah, I mean, fast reporting and maybe [00:25:00] access of data.

Jack Carr: Yeah. 

John Wilson: Uh, even like transparency in data may, it might be the right way to think about this. So what. We were accomplishing this beforehand, but uh, are we locked in daily on gross margin and not just we as the owner, but like who else knows? Yeah. And how do we spread that information as widely as possible?

I got really passionate about, everyone needs to know the score. Mm-hmm. Last October and it's, I mean, there's been like a few challenges with it. But we went open book p and l. I've, I think I've talked about this on the show. 

Jack Carr: Yeah. 

John Wilson: Um, which, you know, I think most owners that's like, they're scared to do that.

Yeah. That's not a thing. And I, I think, um, I, one, I, I don't know that I cared. I was surprised at how little I cared, uh, because at a certain point. This is a $30 million business. There's 165 [00:26:00] people in that building. Mm-hmm. Like no one thinks I'm ripping two and a half off the, like that. That would be idiot.

That's what I was just gonna 

Jack Carr: say, because I think on, on those open book p and Ls, a lot of people are afraid. I, I'm not afraid because I don't take anything outta the business, not a personal piggy bank. I think a lot of owners, they get really, really comfortable and they rip a little bit here. They rip a little 

John Wilson: bit there or their BMW or boat payments inside the business.

Yep. Yeah. We run a clean set of books. Exactly. And, and I also. Yeah, clearly communicate. So EV every month, it's the second Wednesday of every month. Open book financials. Yeah. Here's what happened. Here's, here's the wins, here's the ls. We talk about cash up or down. Like did we hit our cash goals? Yes. No. If we didn't, what happened?

Uh, and often it's decisions I make. Hey, we didn't, because I put a hundred thousand dollars into CapEx and we bought a bunch of vans. Yeah. And uh, last month we. Had a debt pay down of a hundred grand. So like yeah, cash went down because that was $200,000. 

Jack Carr: Yeah, exactly. 

John Wilson: Uh, and our net profit was in May. It was low for us, which [00:27:00] I know it's a big number, but it was low for us.

It was 180 7, so like that's low. That was not a good month. So we had a net cash loss of 13 grand. So we talked about that openly. And I think everyone has to know the score and you have to be able to spread it wide. And I think a part of the reason I didn't care is because for six months prior to that.

I had been doing this open by department every day labor material, like we have a daily gross margin. Yeah. And on there we put days to break even. Our break even happens at 1.56, $7 million every month. And everyone knows that. We crossed that and our net profit is there on the sheet. Like, Hey, here's what we're pacing at, 200, 300, 400.

So yeah, I think we just went really wide with it and we got better at reporting. 

Jack Carr: Yeah. 

John Wilson: And that locked us in. So when we knew our break even to the day. Mm-hmm. Like I broke even like last Friday. So I'd like. Seven freaking days to just rip. Yeah, which was amazing. [00:28:00] Today's break is brought to you by owned and operated newsletter.

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Jack Carr: which is huge. I mean that, that's what opens that and that's where I was actually gonna go with that too, is the weird thing to me about.

Being in this podcast space where we're talking with owners, and owners are coming to me is, you know, a lot of these people who are MBAs and who have these, um, these, these, like really, they, they come from consulting. They know these items. They know that they need to do this, but they just don't do it 'cause they're too busy firefighting.

And so it's really, um, getting them to a point where they're like, okay, I need to focus back on what I know I need to focus on. Yeah. And um. Yeah, it's huge. It's business transformational. I think that those, those few items really Yeah. Are how to get to 1 million ebit. It's like drive [00:29:00] revenue. 

John Wilson: Yep. 

Jack Carr: Make extremely good decisions about putting money back into the business.

John Wilson: Yep. And know, are you getting money back and know where they're coming 

Jack Carr: from. Yep. 

John Wilson: Yep. And then like tight reporting. Tight reporting. I think my, my final one, and this one's pretty quick, we just talk about it a lot, but invest in stuff that will save labor. Like most of your ebitda, how are, are you driving profitable field operations?

Jack Carr: Mm-hmm. 

John Wilson: Is your office efficient? Like that's it. Yeah. Those are the two things. So if your office, are you investing in ai? Are you on a CRM that helps you? And ServiceTitan is not the answer for everybody. Like we're actually switching one of our departments over to Field Pulse right now. I saw that. Yeah.

Like literally it is a win. And why am I paying 300 bucks a user on ServiceTitan? I can do this over here. 

Jack Carr: Yeah. 

John Wilson: So like, are you investing the right stuff? Are you Overinvesting, which you might be. Uh, and that was the case here. Like, we're over, we don't need all the bells and whistles for this department, so we're moving [00:30:00] over to Field Pulse.

Um, do you have automations? Do you have zap set up? Like are you reducing that? Are you, are you staffing overseas? Like how big of a part of your company is your overseas staff? So I feel like obviously we spend a ton of time on the show talking about those things. Yeah. But for us, last year, a a million of EBITDA came from really like tracking, uh, gross margin and like tight reporting.

A million of EBITDA came from tightening office operations with AI automation and overseas that was literally $80,000 

Jack Carr: leverage. Yeah, you're, you're a hundred percent people leverage technology leverage. A hundred 

John Wilson: percent. And then my, my third million, uh, came from increased gross margin from tight reporting.

Mm-hmm. 

Jack Carr: That's amazing. I mean, the only other thing that I would like to add that I've seen you do really well, as well as a lot of other bigger operators as we go, you know, do sidewalks and everything is the heavy, heavy, heavy focus on [00:31:00] technician retention. 

John Wilson: Yeah. 

Jack Carr: So a lot of the, there's a lot of expense that goes and a lot of decisions are made a lot.

But I mean, what I didn't understand was there's a lot of decisions made that are all about technician retention, um, that don't make sense necessarily from like a regular operation. So hey, overspend on. Your facilities. Not huge overspend, but overspend to grow into, but also overspend to be in a nice area for marketing overspend to be in a nice area so that people want to work for you.

Yeah. Yeah. Versus your head hunting and trying to get people to, it's like, you know, nobody wants to go to a dumpy old facility that looks like junk. So we just built out a brand new training room. Yeah, yeah. And spent a bunch of money, um, copied George with the two TVs on the wall and. Brought in the desks and mm-hmm.

Brought in sanders and painters and all this kinda stuff to build out this really nice training room and break room so that people want to work for us. Yeah. Which I think is a [00:32:00] huge part because people are our business. Yeah. So a hundred percent awesome, man. 

John Wilson: That's how you make your first million bucks.

You think you're gonna hit it this year? 

Jack Carr: Next year. Next year we'll hit, we'll hit it next year 'cause we're on track. Uh, we're like, we're, we're spending everything. We, we exited Q1 at like 15% net, which was, I mean, yes, it felt so good. It wasn't so much pain as normal with high, with 24% growth. So like, we had good growth with Good net.

Yeah, Q2 has exploded. Best month ever in May, followed by, we're gonna beat it in June, hopefully beat it in July and beat it in April or uh, in August. Um, that's the goal. The point being is I think we'll hit our goals this year. We'll surpass 'em, and then next year the goal will be 1 million in ebitda.

Yeah. 10 in, in top line. So, yeah. That's amazing. I, I think we're, uh, I try to view myself as like three years behind you, four years behind you. Yeah. And then keeps me going, I mean, hits the 

John Wilson: fan. Yeah. I think you are. Yeah. I, I think, I think you be there. I think that's kind of the fun thing about the Sin Street.

Uh. [00:33:00] The, the numbers compared to what I feel like such an old head when I say that shit, but like the numbers are so different. 

Jack Carr: Yeah. 

John Wilson: From when I started where a $2 million company then was like 15 people and now is like 4, 5, 3. Like it's kind of, it's just insane. And I think like the, this scale and the pace you can grow at, like I'm finding myself having to reset my own expectations just because I've been in the industry for so long that.

Hey, 40 million is no longer like that 

Jack Carr: big. You hear that here first guys? 40 million is no longer that big. You gotta go for that. What's, what's big now, John? Tell me. Is it the a hundred million mark? 

John Wilson: I start, I start to, I start to be like, oh, they're a big company at, you know, 75, 80. 

Jack Carr: John is not disconnected from you guys.

He completely. Is just one of one of the boys. One of the boys. He's one of the boys. He knows what it's like. Oh my God. Oh, fuck you. All right. If I love [00:34:00] that. 

John Wilson: If you like what you heard, including this bullshit for the last 10 seconds, uh, make sure you like and subscribe and head to owned and operated.com.

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