Owned and Operated - Episode #218: Why $20M Doesn’t Mean You’ve Made It

Release Date: July 3, 2025
Hosts: John Wilson and Jack Carr
Description: In this episode, John and Jack delve into the misconceptions surrounding business milestones, particularly the belief that reaching $20 million in revenue signifies ultimate success. They explore the complexities of scaling a plumbing, electrical, and HVAC business, emphasizing the continued challenges and growth opportunities even after hitting significant revenue marks.

1. Introduction: Rethinking the $20M Milestone

The episode kicks off with Jack Carr setting the stage for a candid discussion about the true implications of achieving $20 million in revenue. Contrary to popular belief, Jack asserts that reaching this milestone doesn't equate to having "made it" in the business world.

Jack Carr [00:25]: "$25 million is not what I thought it was."

2. The Reality of a $20M Business

Jack and John discuss their initial perceptions of $20 million in revenue, highlighting that it still classifies a company as "small."

Jack Carr [00:35]: "I thought at $20 million we would have it all figured out. And $20 million is still a fucking small business."

They delve into the typical structure of such businesses, noting the reliance on a personality-driven leadership model and limited departmental sophistication.

Jack Carr [00:48]: "Might only be 50, 60 people."

3. Headcount and Business Sophistication

The conversation shifts to the correlation between revenue, headcount, and operational sophistication. John provides perspective by comparing their business size to industry giants like Amazon to contextualize the scale.

John Wilson [01:14]: "If you're running a 60 person business and employing 60 people, that's still a pretty decent sized business on the average."

Jack emphasizes that even with $20 million in revenue, companies often lack comprehensive departments such as HR or legal, limiting their operational maturity.

Jack Carr [02:41]: "It's not that many people and I think there's a differentiation between a 60 H vac only company and a multi-service provider."

4. The Challenges Beyond Revenue

Despite reaching $20 million, businesses still grapple with core challenges such as cash flow issues and headcount management. John reflects on his experiences, noting that the fundamental problems persist regardless of revenue growth.

John Wilson [06:25]: "It's much the same piece to have the same headcount issue. You still have the same cash flow issues. It's actually almost, it doesn't go away."

Jack concurs, adding that the workload can intensify as the business grows, making the $20 million mark feel even more daunting.

Jack Carr [07:00]: "It's almost worse."

5. Building a Senior Leadership Team

A significant portion of the discussion centers on the importance of developing a robust senior leadership team. At the $20 million level, companies can begin to hire C-suite executives, though Jack argues that even then, many businesses are too small to justify full-scale C-suite roles.

John Wilson [03:17]: "I think the 20 million mark is where you can actually start hiring C suite team and it starts to get easier."

Jack shares insights from his own experience, highlighting the challenges of integrating roles like CFO and CMO into a business that isn't yet operationally sophisticated enough to support them effectively.

Jack Carr [09:04]: "I am the functional CFO... we're not there yet."

6. Internal Promotion vs. External Hiring

The hosts discuss the success rates of promoting from within versus hiring externally. Jack emphasizes the high success rate of internal promotions in their company, attributing it to the deep understanding of company culture and operations that internal candidates possess.

Jack Carr [23:16]: "How we don't know them... it's probably 30 and... our success rate for promotion is 100%."

John adds that promoting from within not only aligns with company culture but also fosters upward mobility and retention among high-achieving employees.

John Wilson [22:46]: "From a cultural standpoint, you want people who are high achievers, you want people who want to win."

7. Leadership Development and Future Strategies

Jack highlights their commitment to leadership development, detailing a structured program designed to elevate frontline employees into senior leadership roles. This approach ensures a steady pipeline of capable leaders who are intimately familiar with the company's operations and culture.

Jack Carr [19:43]: "We've built very senior teams... all of our senior leaders are doing something like that."

They discuss the importance of creating systems that allow for consistent promotion and development of internal talent, which Jack believes is crucial for sustaining growth beyond the $20 million mark.

Jack Carr [22:15]: "If you were regrowing a new business today and I was going from 10 to 20, I would hire senior leaders much earlier."

8. Recap and Final Thoughts

In wrapping up, John and Jack reiterate that while $20 million in revenue is a significant achievement, it should not be mistaken for having fully "made it." Instead, it's a pivotal point that necessitates continued growth, especially in leadership and operational sophistication.

John Wilson [25:54]: "If you are 20 million or 10 million, you can start hiring those positions that make it a real business."

Jack concludes by emphasizing the importance of early investment in leadership development to navigate the complexities of scaling a business effectively.

Jack Carr [25:56]: "We have to continue creating opportunity for them... building teams under smart people has been the win."

Key Takeaways:

• $20 Million is Still a Small Business: Achieving $20 million in revenue doesn't eliminate the challenges associated with scaling a business. Companies at this level often lack the comprehensive departments and operational maturity of larger enterprises.

• Importance of Leadership Development: Building a strong senior leadership team is crucial. Promoting from within ensures that leaders are deeply connected to the company's culture and operations, leading to higher success rates.

• Operational Sophistication Matters: Beyond revenue, developing robust systems and departments (like HR, finance, and marketing) is essential for sustained growth and scalability.

• Continuous Growth Beyond Milestones: Reaching significant revenue marks is not the end goal but a stepping stone that requires ongoing investment in people and systems to drive further success.

Notable Quotes:

• Jack Carr [00:35]: "$20 million is still a fucking small business."
• John Wilson [03:17]: "If you were to look at all H VAC companies and pick out a mean median and mode, the median company is much less than 20 million."
• Jack Carr [09:04]: "I am the functional CFO... we're not there yet."
• Jack Carr [19:43]: "We've built very senior teams... all of our senior leaders are doing something like that."
• John Wilson [25:54]: "If you are 20 million or 10 million, you can start hiring those positions that make it a real business."

This episode serves as a reality check for business owners who may perceive revenue milestones as the sole indicators of success. Instead, it underscores the importance of continuous improvement in leadership and operational frameworks to truly "make it" in the competitive home services industry.