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Are you a home service entrepreneur looking to scale your business to new heights? In this episode of "Owned and Operated," we delve into a candid conversation between two experienced entrepreneurs, discussing their strategies, challenges, and insights. From pricing to growth plans and the pitfalls of expanding services, this discussion provides valuable nuggets of wisdom for those navigating the home service industry.
Episode Hosts: 🎤
John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter
Looking to scale your home service business? Service Scalers is a digital marketing agency that drives success in PPC and LSA.
Discover more growth strategies by visiting Service Scalers: https://www.servicescalers.com
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John Wilson, CEO of Wilson Companies
https://www.wilsonplumbingandheating.com
Jack Carr, CEO of Rapid HVAC
https://rapidhvactn.com
Owned and Operated Episode 57 Transcript
John Wilson: I'm John Wilson. Welcome to Owned and Operated. Twice a week we talk about home service businesses and if you're a home service entrepreneur then this is going to be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting.
John Wilson: Let's get into it.
John Wilson: Today in Owned and Operated, Jack and I talk about his new plumbing department. So we split this up into two episodes. The first episode, what we cover is hiring the right people. How does pricing work? How do we think about filling the schedule and what type of work you take on when you're getting into a new trade?
John Wilson: It's a great primer. If you're thinking about launching a new service into your home service business. Hey, today's episode is brought by Service Scalers. So Service Scalers is a home service marketing agency. And what they do is they help home service companies like me, like you, like Jack, Drive leads in an affordable rate and at scale.
John Wilson: So they've run two of our brands for a little bit over a year now, and they're doing an awesome job. So we're really excited to partner with them because we know that we've been really happy with what they've done for us.
Jack Carr: Okay.
John Wilson: Welcome back to owned and operated Jack.
Jack Carr: Hey man, how's it going?
John Wilson: Dude. So good.
John Wilson: So good. I'm excited to not actually be working tonight. I get to pod instead. Are you guys finally moved into your location? 100 percent Dude, the garage doors has been like the last thing. So I've had these like plywood garage doors basically that we have to use like screws to take down most mornings and the garage doors are wrapping up tomorrow.
John Wilson: I think so. They've been putting them up all week.
Jack Carr: You sent us that video a couple days ago of you guys doing all the inventory. Yeah, man. Your shop is a dream shop. I'm in love.
John Wilson: Yeah. It's gonna be crazy. It's gonna be crazy when it's done, but Yeah. It's yeah, it's gonna be good.
Jack Carr: And is that one shop for everything?
John Wilson: Oh my gosh.
Jack Carr: For everyone who's listening, it is bigger than most supply warehouses. Yeah, it's huge. It's huge.
John Wilson: It's huge. It, yeah it's big. Yeah we blew out some walls, we did a bunch of construction and then we've been consolidating our, all of our warehouses and now the big project is we have to recount and rebar code five warehouses of stuff.
John Wilson: So like huge undertaking but we all see the light at the end of the tunnel cause now every single employee is based out of our new headquarters and that, that took forever. That's me.
Jack Carr: Yeah. Awesome. How about you? What's going on? Oh man, it's been busy. So besides for all the acquisitions we're working on, we have stuff in the pipe on deals.
Jack Carr: Yeah. Lots of deals. Lots of deals, which is always a good thing for trying them when you try to roll up all this stuff together. That's what you want. Yeah. But we did do something different that's, not totally our style. It's not an acquisition. We just went ahead and launched plumbing.
Jack Carr: We've launched plumbing on Monday. This week we, the ads went out on Facebook and Tik TOK, we did our email marketing and we've been booked up this entire week. We have one plumber and he is absolutely slammed. I think it's four water heaters, two tank lists. a series of drains, like six or seven drains that we're doing.
Jack Carr: I'm blown away by how fast that this growth is coming in. So we're just really excited and trying to scramble to get everything into place. We're just adding things into service time left and right. And that's pretty much been my days have been support for just plumbing right now as we get into the last hot day of the year for HVAC.
John Wilson: Yeah, that's awesome. So you have two locations. So which one is the plumbing based out of,
Jack Carr: It's going to be based out of the, what I call the North Brentwood location. So it's going to be out of that GMB, but realistically like I said, all this is on the fly. We were having, we are behind the eight ball.
Jack Carr: I wasn't expecting it to fly off the handle this quick. So we are really just trying to put one foot in front of the other with, getting all the tools ready, making sure the plumbers are doing the right thing, making sure that we're tracking all the data right. And, it, it's just going so fast.
Jack Carr: You, have you ever launched a company from scratch?
John Wilson: Yeah, we've done four. Or I guess a
Jack Carr: division?
John Wilson: Yeah, we've done four or five, yeah.
Jack Carr: Yeah, we've
John Wilson: done it a few times.
Jack Carr: Awesome. Let's dig into that a little bit. What does a launch look like for you? What's the preparation? I guess the best question to ask is what did you launch first?
Jack Carr: What was your most successful launch?
John Wilson: Yeah. So we're in our most successful launch right now. So each one has gotten consecutively better. That's good to know. Yeah. Because I'm on this one
Jack Carr: that's just sprinting away.
John Wilson: Yeah. So each one gets consecutively better. And then there's lessons and most of the lessons that we've learned have been about demand generation.
John Wilson: Cause that is the hardest part in our experience. So two months ago or something. And he was like, dude, I'm paying an electrician like a quarter of a million dollars a year to sub. All these different things out. I'm going to start an electrical company. I'm like, yeah, like you should do that. So most of the time when people are launching a new service, it's cause they have enough work for an, a guy and they're like, I need to do that immediately. But that's where it stops. So then it's great. What do you do about the next 10 guys? And how do you keep them going and how do you get them busy? And that is the hard part. That's yeah, that's the tough part. So most of our lessons have been around that. So we've launched we launched a handyman concept back in 2019.
John Wilson: We launched HVAC, we launched drains, we launched a water remediation and we launched electrical. So all of those were new concepts. So back in 2015 we actually didn't do HVAC. That was like a new thing for us. Now granted, it's only good ish now, but like I wouldn't even say we got good at it till the last six months, year.
John Wilson: Handyman was shut down after a year. Drains now is a four or five million dollar business for us. Electrical is a thing and that's the one that we're in now. That's the one.
Jack Carr: So once you decide there is demand or just decide you're going to go in on something like this. What does the kind of the work up to that point?
Jack Carr: What did I miss when? We started this process and getting all the pieces into place to move into the next step, the actual launch. What do you feel is the framework for that?
John Wilson: I wasn't there for years, so I don't know what you missed. No. I'll tell you about what
Jack Carr: did the correct framework work?
Jack Carr: Look on kind of this last one between handyman and say the electrical
John Wilson: one. The most important thing, and this is the lesson we've learned like five times, but who is the first hire is a really big deal. Cause they're, it's like anytime we're launching something new. So right now we're launching an inside sales team.
John Wilson: And by the end of the year, we're expecting six to 10 people in that team. So the first hire is a big deal because they're going to set the tone for the next, six to nine people inside that team, they're going to help us develop training. They're going to help us develop best practices.
John Wilson: Like we're going into this with an idea of how we think we can execute. But really like we have to go execute and they're the ones on the like foot on the ground every day. So do they have a training mentality? Do they fully believe your core values? Do they fully believe your the sales process that you're about to put them through?
John Wilson: When you give them leads, can they do something with it? Yeah.
Jack Carr: Do you feel like when you have that specific hire, are you looking there's a framework for hiring people that kind of, in the beginning, On a smaller company, there's a lot of generalists, right? Yeah. They're doing everything across the board.
Jack Carr: Yeah. And then as you get bigger, you get rid of those generalists and you bring in specialists who are really good at one thing and execute really well, salespeople, et cetera. Yeah. Do you feel that first hire is supposed to be, in this instance, a generalist or kind of a specialist on that specific topic?
Jack Carr: Yeah.
John Wilson: My preference would be specialist, but that's, I think just where we're at in our hiring arc. Basically everyone that we hire at this point, if I make a hundred hires in the next year which is probably about what it is, then maybe five will be generalist.
Jack Carr: Okay.
John Wilson: And that's even a maybe like we don't even really, I don't know, you'd have to be, we'd have to, you'd have to be a really specific role. And I can't even think, I can't even think of one on my radar of what we'd be hiring. A generalist for these days we're hiring and this is just have most of it mostly dialed in.
John Wilson: So Hey if we're creating a full time role, like someone's already lived that role for A little bit. And you're probably down to three to seven tasks that, that we're expecting you to do. And really we're trying to, this is like a totally different conversation. Yeah, no, I know. Yeah, we're really trying to not hire anywhere near the top of the org chart anymore.
John Wilson: We're essentially done hiring near the top of the org chart. If you end up at the top of the org chart, it's because you were promoted.
Jack Carr: That's great. Yeah. And so when you started this electoral division You brought in a certified electrician, or at least a managerial kind of role, right?
Jack Carr: So we
John Wilson: bought an electrical company, and inside that company, yeah, so our experience was a little different, so we bought a construction based electrical company that had one guy that was service oriented. And we launched it on the back of him. And 12 people reporting to him. So he, we did that in about 14 months.
Jack Carr: So it is a managerial, it's a middle manager position, is the, it's the first role you're looking for in kind of the start of a new division so that they can help with that training and help with the building of, said division, right? Yeah. Is it, this is, I'm phrasing it as a statement, but is that what I'm understanding, correct?
John Wilson: That's what it, yeah. Yeah, basically. Yeah,
Jack Carr: Because that's what we brought our first, this first hire. He's not, I wouldn't say he's a 10 out of 10 plumber, but he's a good plumbing manager. But the idea that, Hey, once we get this demand, which it's already starting to show, we just want to see that for a little bit while longer before we bring someone else in and under him to then take on a lot more of the install work as you would Any big pitfalls big pitfalls that you hit that you're like, this is a lesson I should write down and it is all the man,
John Wilson: like so much of it is demand.
John Wilson: Like we really haven't struggled with quality issues. We haven't struggled with hire great people and you vet them through the person that you trust. And yeah, quality issues have been non existent customers are normally excited about it. So it's like, how do you create sustainable demand?
John Wilson: That continues to grow. Yeah, man, most of the pitfalls are demand. I'm like, cause that's like all of them in, in, and it's the same with all the launches, right? So like water remediation was the same thing where yeah, there's licensing. That's a hurdle, but it's not too bad.
John Wilson: It's a, yeah, you just go find someone with a license. Like it's not that complicated. People make that to be like the thing, but the thing is getting customers to call you. Yeah. Um, then yeah, demand generation inside Watermint was a real beast that were just four years in getting a handle.
Jack Carr: And then, so let's switch it around because demand is going to be across any industry, right?
Jack Carr: Trying to grab that foothold is that generation of demand, especially in the beginning. There's some efficiencies of scope that you run into as you grow this bigger Wilson company brand. And then you say, Oh, we offer this. There's still a demand issue. I can definitely see. But what does it?
Jack Carr: Initial, maybe not on the electrical one, but maybe on one like drains or something that you opened up.
John Wilson: I think let's, yeah we'll stay on, let's assume the demands like taken care of and we can cover that a little bit. So I think the first couple of hires matter a lot. So like the first hire matters a ton.
John Wilson: So do the next couple of guys, because that's like. It's the infrastructure for what you're building. It's the base on what you're, on what you're building your house. So if you get guys and this is to me this is a hiring maturity thing. So now we have most of our hiring process dialed in.
John Wilson: We understand what we're looking for. But most of my failures on hiring was I really didn't have a good idea of who was a good culture fit. Were they going to do what we needed to do? Were they going to hit my expectations? So those first couple guys have to really drive the bus. So when I think about our success in in WaterMitt and in electrical yeah, once you get the demand, can your guys do anything with it?
John Wilson: And our electrical guys, we were really blessed to have some very motivated, very hungry guys off the rip. That we're excited to serve our customers, excited to offer options. And they came out ripping, like we have, we had, that's always such a good
Jack Carr: feeling. Oh yeah.
John Wilson: It's wild. It's those
Jack Carr: aligned people that are just, Oh my
John Wilson: gosh.
Jack Carr: Absolute hunters.
John Wilson: Yeah. They're amazing. They're awesome guys. And like the reason, like I'll sit there half my days and look at electrical and be like, I did part of this. I did not do what this had turned into, like electricals on track. It's like on a run rate for five and a half million dollars
Jack Carr: in one year, two years, 14 months.
John Wilson: Oh my
Jack Carr: God.
John Wilson: Yeah. Yeah. Like it's unreal. It's unreal. We've never had, we've never had a launch like that before. That's good. But Hey, that first hire. He's amazing and he's a great coach and he turned into a great leader and that was awesome. But he really drove it and fed the process for the first nine months.
John Wilson: Like he stepped into management five months ago. And then the next couple of hires Hey, when they got leads, they did something with it. They were willing to offer options. They really understood our sales process. You understood how to flip it. So dialing in on. If you only have two to five people, one person on a division, like everyone has to pull their weight.
John Wilson: And I, that lesson to me goes all the way up to 138 people, which is my current team. Everyone's got to pull their weight. But like, if you only have two or three people yeah, they got to be dialed in on what you're doing. So is that
Jack Carr: where that kind of next level is, right? The first level is you start, you get the first, maybe one, two, three people, and then the next level is five.
Jack Carr: And then the next level where does it hit? Like 10 people is the, it's, if you have 10 trucks at half a million dollars each, it's a sustainable business now. Like where, where's the next step? Where's the step where it's set? Where did you
John Wilson: find that
Jack Carr: it was?
John Wilson: So right now ours is still ramping like a lot. Like number, we're still chasing down demand which is a good spot to be in. It's a good problem to have. Yeah, it's a good problem to have. So we literally, we don't have enough guys to go out and perform service and sales. And The jobs that they do sell are blowing our former KPIs out of the water on the metric of installers to sales.
John Wilson: So we don't have enough installers. So we're like, they have a half a million dollar backlog for that's three people have sold a half a million dollar backlog. So we're like, we're chasing down recruitment basically as fast as we can. So I don't feel like we're at sustainable yet. We launched by the end of October, we're going to have six service selling techs and we're going to have 14
Jack Carr: installs service selling.
Jack Carr: So you have a service selling tech and then an installer model kind of, it's the same as a service sell sales tech and it's like HVAC. Yeah. Yeah.
John Wilson: You can think of it like HVAC, except there's no comfort advisor. So these guys are the comfort advisors, basically.
Jack Carr: Awesome. And so when starting up, maybe not this one, cause it was an acquisition, but one of the other ones, what did you find was this key spot?
Jack Carr: Not, excluding out demand driving factors, right? Advertising things like that. But in terms of just operations, what was the working capital? What did that look like for a healthy start?
John Wilson: Honestly, I don't even know. Cause it was like a guy, it was like a guy in a truck. Yeah.
John Wilson: So that's probably not a great answer. Cause I'm sure that a guy in a truck is a big sacrifice, but like we wouldn't notice that. We didn't even really notice the dent on payroll or assets until eight people.
Jack Carr: So the joys of kind of a dishy answer. I didn't notice buying a truck and tools and fronting a headcount.
Jack Carr: Didn't even,
John Wilson: Yeah. But we also had an electrical business too.
Jack Carr: Yeah.
John Wilson: So it was we already had. Like these personnel, we already had the assets. We already had the inventory. So like for us, it was just like, Hey, we should do this. Now it became a capital problem when it's like, Oh, I need to buy five trucks.
John Wilson: I noticed then
Jack Carr: Oh, okay. Yeah. But at that time when you're making that big capital expenditure like that. Realistically, right? You know that the demands there to buy those five trucks. Yeah. So it's you're back at that good problem to have versus when, you're at that three. Cause I'll be frank with everyone.
Jack Carr: We're hovering around that 3 million mark. Yeah. And so we're finally ready to add that second. Yeah. Kind of division. But that 3 million mark is still, totally, you're
John Wilson: playing a different, you're playing a different game than I am. You're playing a different game, but the joy is it's going to make a much larger effect faster in your business.
John Wilson: Like for us, we weren't, we're noticing it, obviously I'm driving that bus, like I'm pushing as hard as I can on this thing. To go, I'm working directly with the, like the technicians, I'm working directly with the field manager. I'm working with their trade manager. I'm like, I'm in it. I'm helping drive lead.
John Wilson: I'm helping do all the things, right? Like it has my attention. It has a lot of my attention. But it like, yeah, it's growing super rapidly, but it's still not even 10 percent of revenue.
Jack Carr: Yeah.
John Wilson: Whereas like for you, you can make a huge dent. In your organization with your focus that I cannot
Jack Carr: and most of the time, kind of from what I've heard industry standards plumbing tends to be right up there if not more so than when somebody has owns a plumbing and HVAC company plumbing side tends to creep up to a higher gross than the HVAC alone. So really excited though to get that out to all of our HVAC customers.
Jack Carr: It's been a great response. What is the next? And it equals out. Go for it. It
John Wilson: equals you out in the, down, in the, in the down months. Like plumbing is so much more stable. Yeah. So much more stable versus HVC uh, what's that joke? It's like a girlfriend on heroin. Like when it's good it's bad.
John Wilson: It's really bad. That's HVC . That's
Jack Carr: Yeah. Never heard that one, but I'll save that one now. A
John Wilson: banker
Jack Carr: I know
John Wilson: Told me
Jack Carr: that. Yeah. Yeah. What's. So this is obviously extremely successful, right? That you're doing, you've driven it it's going, you have the playbook down. Is there potentially more on horizon?
Jack Carr: Are you taking an eye for cool repair? Are you looking into, appliance repair? Yeah. Yeah. Absolutely. Absolutely. Absolutely. Chris Hoffman, right? He posted that thing the other day that said I'm paying. We're paying the same as him. He's in our market, which is the worst thing possible, by the way, for anyone out there.
Jack Carr: I wrote him a message. He wrote me back. He's I don't look at it that way. And I was like, of course you don't look at it that way. I'm sure we're not competing. And I'm like, yeah, of course you're not competing. But realistically we're in the same market, he's saying, Hey, it's, we're, our PPC a click, right?
Jack Carr: Yeah. And he said, appliance repairs, five bucks. I couldn't imagine that. That would be amazing. And looking at
John Wilson: I think cost per lead is like a big, this is something that we're investing in insane amount of my time in
Jack Carr: right now
John Wilson: is like scalable marketing efforts. Um, and what I'm, what we're learning.
John Wilson: Because aside from like demand LSA, PPC, like you can still find ways to drive sub 20 leads and we're doing it. It just it takes a lot more, but that was, when we got on LSAs originally like 15, 16 months ago, that's what it was like electrical LSAs were 11. It was crazy. But the problem is, and you might experience this.
John Wilson: Or you might not, but it's really hard to launch a new service with LSAs because you don't have, you don't have the back end. So Google like rates you on each trade with your LSA reviews. So if you don't have the support for plumbing, but you have an HVAC it won't send you as many leads. But you're probably large enough in HVAC that you're going to be fine.
John Wilson: But we originally launched electrical off like a 15 review GMB, which really struggled because we couldn't get our electrical license to be attached to our other GMBs.
Jack Carr: So that, that's actually what we ran into initially was some kind of weird licensing thing that Google didn't like. So we finally got that and the plumbing license came in right as the HVAC.
Jack Carr: So we just packaged it all together. We're still waiting on, it's been two and a half weeks and we're waiting on what do you call it, all the verification process. It takes forever. You just gotta call them. Yeah, I did. I called him yesterday and a couple of days before they, they said they're waiting on one person's background check.
Jack Carr: Come on, man, get it through. Oh yeah. Did they tell you who? Itching? No. He's not.
John Wilson: So what we had to do is we had to like I'm all for the background check thing and I'm frankly, I'm glad Google does it, but you just choose the same people every time.
Jack Carr: Yeah.
John Wilson: That's the way to do it. That way, it'll be done.
John Wilson: And then you just go to their office and, or their desk or wherever. And you're like,
Jack Carr: get it done. All my guys, they put it in super quick. It wasn't an issue with my team. It was just somebody on the team is holding up the process and they won't tell me to just delete that person, which but we're really excited because LSA is going to be, we've been doing good numbers without LSA.
Jack Carr: We just have to focus on other avenues, but LSA will be great.
John Wilson: How are you thinking about pricing for a brand new trade? What are you doing about price book? How are you walking into this?
Jack Carr: Oh, gosh that's been probably the most, some of the biggest nightmares trying to figure out how to price it and the market and everything like that.
Jack Carr: Because we, there's a great group on Twitter, right? We all know that there's a bunch of plumbers. We're all pretty close. Yeah. We see plumbing, electrical. And so I've been reaching out to those guys, including yourself on trying to figure out, Hey, how much per hour you guys charging, which markets, everything like that.
Jack Carr: And so Isaac Owens went up in Chicago, that's pretty close. I reached out to him, Sam Leslie, rich, pretty much some of the big names and said, Hey, what are you pricing this at? What's your going rate dah. And then we, my GM actually used to work for, he was the GM of a really large plumbing.
Jack Carr: And HVAC company down in a city near here. So he has some connections with local plumbers and we can see their rates. So that's been extremely helpful. And we've been just Like I said, it's trying to slam it all into service site as quick as possible. So we're just getting, lavatory. So
John Wilson: you just do Pricebook pro or something doesn't have it all built out.
Jack Carr: Yeah. So Pricebook pro does, we don't, we're not using Pricebook pro at the moment. So it might be, can I ask
John Wilson: why? Cause it feels like that's the easy button, right?
Jack Carr: We didn't need it with HVAC cause we already had our Pricebook. Yeah. So there was no need. And then I wasn't expecting. This kind of, so it does sound like an easy button.
Jack Carr: It's a potential definitely. Cause they, they use some great numbers in there, right? They use averages from across the nation and all that kind of stuff on time. And
John Wilson: I don't personally use it. Like we have our own system for all our trades, but you don't use service line. No, we don't use Pricebook Pro.
John Wilson: Oh, okay. Yeah. But, yeah, so Pricebook Pro, if you're not on a service site, Pricebook Pro is like it's a pre built Pricebook that helps you just basically have a Pricebook, I think, in an hour. It's meant to be very quick. We've never used it because we had a system that provided all of our including electrical, so when we launched into electrical, we didn't even have to think about pricing.
John Wilson: Which would have been a real pain. Bye. Bye. Because it, it was already built into our other system that had plumbing and HVAC. But yeah, I didn't even think about pricing. That'd be a lot to have to come up with all that off the rip.
Jack Carr: Yeah. The nice thing though, is when I signed up for Service 10, I actually clicked the box that said we were going to move into plumbing.
Jack Carr: And so they have a default set of job types that they add to your account. Initially on, on kind of the thing and I went through and deactivated them all. I can go back now and activate them all and it gives me the time it takes on each job they're estimated, which I'm guessing is pretty close to their price book number.
Jack Carr: And so I'm just plugging and playing with that. We just met with our rep for plumbing supplies, and then we have another one tomorrow that we're meeting. So these are all factors that go into, to determining your price at the end of the day. And so we're going to be really crunching down on that.
Jack Carr: As long as we don't lose money I'm pretty happy going into it. It's a solid start.
John Wilson: Yeah.
Jack Carr: We just need to get everything lined out here in the next week or so.
John Wilson: Yeah. So what's the growth plan for you? Like where do you expect this to go when you launched? Like I knew what I was doing with or not knew what I was doing.
John Wilson: I didn't, I had a general idea of what I intended to do with electrical. Like what did you plan on doing with plumbing?
Jack Carr: So I. Ours is strange because one of, so we're in the middle of an acquisition that I can't talk a ton about, but it'll essentially double the size of our company, maybe triple, give or take.
Jack Carr: And so they already have a plumbing division as well at that company. So we're trying to just get our team and our systems ready for that merge. And so we launched it on our side. And then as we merge up with the plumbing, merge up with the HVAC the hope is that it'll increase the demand enough to hold the new, our new team member, but also be him be ready with our new systems to be able to manage them.
Jack Carr: Does that make sense? And our hope that is a one third there, two thirds HVAC, one third plumbing. My hope is in probably the next two to three years to try and grow the plumbing division side to the same size as our HVAC company. That, that's the goal. And so we'll have a total of three techs and a manager moving in probably, hopefully in two months.
John Wilson: Yeah. So when you're, you asked me the working capital question and my answer was cheating because we had we, it was intentional.
Jack Carr: So like a body
John Wilson: construction based company intending to add electrical and using that labor pool to fill our team. So it's not like we tripped into that.
John Wilson: That was obviously a portion of the plan there, but when you're thinking about launching it. Like, how did working capital, how did that work for what you were trying to do?
Jack Carr: So our number one goal was exactly what you said, HVAC has a shoulder season, water heaters tankless, they're not rocket science to install, they're pretty high ticket items.
Jack Carr: If we could just grab, a few of those per month, we'd be in a really good place for our team, as well as for the new the new manager. He could handle that himself with one of our installer guys as a helper to learn the trade. And so that was our initial focus is we were going to come in here and just, that's actually what we did and all of our advertisement and demand is generated around water heater replacement tankless.
Jack Carr: And then what I didn't expect was we got all these kind of drains and. Oh my, can you change my shower head for me? Can you do this? Can you do that? And so that was the unexpected part that we weren't prepared for from a capital point or from, our management point, we were just expecting to come out there.
Jack Carr: We have our pro press. We have our, our specific tools to do a water heater job. But now we're floundering in the sense that if we start doing drains, do we need to buy that 10, 000 seesaw camera, whatever they call by rigid. And then we need the commercial size snake and then, all this stuff.
Jack Carr: We're trying to play on this balance beam because I know the new company that we're acquiring has like a Jetter. They have all this stuff. So we're trying not to double dip on too much, but at the same time, meet the demand of the customer set there, happy customers. Yeah we put aside about 50 K.
Jack Carr: So not a huge, it's not a crazy amount, but for our startup that includes demand generation, advertising, it includes the time between getting to the new company merge and our single manager is going to be running it. So it's his salary. And then on top of that some light tools, but now I'm rethinking that we might have to go back to the drawing board or a few other big.
Jack Carr: Big purchases. We'll see.
John Wilson: Yeah. I don't know. Like I have a friend that he launched a plumbing company like five years ago, seven years ago, and there are three, four guys. He keeps it small. They just added drains. Like you can say no.
Jack Carr: Yeah. The drains is so nice.
John Wilson: Yeah. Ish like the drains is nice, but you need to invest like 200 grand.
Jack Carr: Yeah. Cause the problem with drains, at the end of the day as well is you need the truck. You need the, you need everything. There
John Wilson: is literally no reason for someone to go out and clean a drain. If you can't snake it. Excavate it. That's where I was going to go higher frigging thing.
Jack Carr: And then drains really at the end of the day, right there, the low ticket items, the actual drain cleaning, the higher ticket items, the jetting, the higher ticket items, the sewer replacement or the re pipe, which we really are not even close to dealing with right now. So I wouldn't
John Wilson: even, I wouldn't, I would just say no.
Jack Carr: Yeah. We're focused. Like I said, our focus is water heater replacements. And then we might keep the guy busy with some. Odds and ends, maybe some house snakes, the sink or whatever, but not mainline. So we'll see though. I don't know. Everyone's killing me. It's revenue that's just sitting on the table, like looking you at the face and going, Hey,
John Wilson: Oh my God.
Jack Carr: Yeah. Go for it and then send it out, send it to someone else. Like I'll send it to the company I'm merging with and say, yeah, happy here's a sewer before you transfer over to me.
John Wilson: Yeah. So give you a lead, Spiff point off the deal. Yeah. Yeah. Yeah. The problem. That is the problem with drains is the amount of money it takes to actually do it.
John Wilson: It's just so real versus a guy in a truck in a pro press, that takes a couple grand like drains is like, you can blow 150 and not blank.
Jack Carr: Yeah. That's a definitely a conversation I want to have though on another date with you because I'm extremely interested in what that looks like.
Jack Carr: It looks like
John Wilson: HVAC
Jack Carr: drains is HVAC
John Wilson: in
Jack Carr: terms of what are the, What is the 150, a truck, some tools, snakes, the camera, I'm not getting to 150 in my head is why, so I'm thinking like, what am I missing? Oh, man, and it was a lot.
John Wilson: You're gonna do it. You're gonna be like, shit, it was a hundred.
John Wilson: Oh,
Jack Carr: yeah,
John Wilson: the excavator. Like you're that's the 70 grand you're missing is the excavator.
Jack Carr: Yeah,
John Wilson: You could like you can rent stuff and that's what people do. But
Jack Carr: trailer, excavator, trailer, yeah, what's your
John Wilson: driving look like? Do you have someone that can haul around a 20 foot trailer? Do they have a CDL?
John Wilson: Do you need a CDL in your state? I don't know. And that's rented or owned and then yeah, you can rent cameras. You can rent drain equipment, but then you're not making any money.
Jack Carr: Yeah. That's the problem. We sort of seven, everything out that comes to,
John Wilson: I'm all for drain. I'm like, sign me up any day of the week.
John Wilson: But you were just like, yeah, dude, we got 50 grand. And I'm like, that's not going to get you there. No,
Jack Carr: that's good advice to see that these are the pitfalls that I'm asking for is, um, if we added another 30, it still wouldn't get us there without renting all the rest of the equipment per job.
Jack Carr: And then I think if I were
John Wilson: you, I'd be like really honed in on what can we do? skillset for and how do we optimize and train sales on the things we can do? And then like drains is its own sales process versus plumbing. Like it's a totally different thing. Like how you deal with it, how you flip, that's totally different than somebody going out and eating water heater or tankless.
John Wilson: So I would be dialing in on okay, how do I get up for three eyes in 90 days? And then how do we train them on the sales process so that they each pull in 40 to 60 grand a month and then you don't need drains to do that.
Jack Carr: Yeah. Yeah. There's a company in our area called Water Heater Pros.
Jack Carr: It's the coolest company. Yeah. I love that stuff. That's all they do is water heaters. Such a good gig. That was real smart on whoever designed that, that franchise. Yeah. I,
John Wilson: I, I want to do the same thing. Like we're. Thinking about launching a little like fulfillment version. So like we basically go to market with that brand and then we just fulfill the sales and just go absolutely nuts doing it.
John Wilson: So that's we're, we are actually doing that with duck cleaning.
Jack Carr: Okay. We have
John Wilson: like it, it's own fulfillment brand and then we're just like doing the work.
Jack Carr: Yeah. Sweet. We want to wrap it up.
John Wilson: Yeah. I feel like this was a good intro. This was good. This was really interesting. I think. I want to spend a little bit more time in here. We'll save that probably for our next talk, but we're going to talk into, yeah, I do want to dive into the marketing. I want to dive into demand generation and like where we've flopped and where we think you should be looking out for, because that's been the big thing.
Jack Carr: For everyone listening, John and I have talked about it. And although we love the we're going to mix it up a little bit with some of some of the episodes like these, where they're really focused on deep. What behind the curtain? What does it look like? What are the questions? How do you get to that five million mark?
Jack Carr: And then still mixing some of those those fun model. I don't know what you call them. Going through the models of different businesses. Yeah. Explorations,
John Wilson: man. Yeah. Exploring. Chasing down curious,
Jack Carr: curiosities. Especially when we find them. I think it's going to be a good mix for you all. It'll really get to the bottom of some interesting topics that, I love.
Jack Carr: This is right up my alley as well, yeah.
John Wilson: Alright. Sweet. Yeah, next one. We're diving into how you're going to feed those texts. Yeah,
Jack Carr: that'll be interesting. Everyone's going to love that one.
John Wilson: Yeah. All right. Thanks for joining us again. Thanks for tuning in to owned and operated the podcast for home service entrepreneurs.
John Wilson: If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at app Wilson companies. I'll see you next
time.
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