#218 Why $20M Doesn’t Mean You’ve Made It

Summary

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.

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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."

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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.

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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.

Transcript

[Jack]

Today on the show, Jack and I and I won the argument. Talked about different sizes of company, what leadership looks like, and how to build a senior leadership team for a 20, 30, $40 million business. So enjoy the episode. It was a good discussion and I was right. Enjoy the episode.

[John]

It was great. Always. John.

[Jack]

$25 million is not what I thought it was.

[Brandon]

Yeah.

[Jack]

When we were, when I was, you know, growing and all this stuff, you know, 20 million to me was like, oh my God, like I've made this joke before.

[Brandon]

Yeah.

[Jack]

I thought at $20 million we would have it all figured out. And $20 million is still a fucking small business. Like it's a small business.

[Brandon]

Yeah.

[Jack]

It is personality driven. If you're H Vac alone.

[John]

I was just going to mention that.

[Jack]

Might only be 50, 60 people.

[Brandon]

Yeah.

[Jack]

Like 300 to 350,000 revenue per employee is really common in H vac. Like in plumbing, that's probably 100.

[John]

I think if you were to generally look up though average numbers of employees at any business at any given time. I think if you're running a 60 person business and employing 60 people, that's still a pretty decent sized business on the average. I mean, you have Amazon at one end that employs hundreds of thousands.

[Jack]

But I think there's also a lot of employees small. Like, so if I'm looking at like sophistication of the business, I agree.

[John]

Yeah.

[Jack]

Like 50 employees, you might not even have an HR person yet. Like your accounting department is probably one person.

[Brandon]

Yeah.

[Jack]

You just started having to deal with FMLA and you're not even having to deal with the actual shit that starts to happen later on as a business.

[Brandon]

Yeah.

[Jack]

Legal is not a thing yet. Contracts are barely in existence. Like $20 million is a small business. Like it's small. I don't know.

[John]

I mean like the, if you were.

[Jack]

It's a lot of dollars. Like if I had 20 million land in my personal checking, I'd be like, hey, that's cool.

[John]

I won't disagree with you on parts of it. I think that inherently. Right. If you were to look at all H VAC companies and pick out a mean median and mode going back to sixth grade.

[Jack]

Yeah.

[John]

The, the median company is much less than 20 million.

[Jack]

I'm not saying that for the industry. They're at small.

[Brandon]

Yeah.

[Jack]

Or they're, sorry, they're not big. I'm saying like as a, the, the quote I've, the quote I've been using is just about any can get a business of 20 million bucks. Because I really think that they can. After seeing, I've seen into like dozens of these things now, they're not that complicated. Like 50, 60 employees. Like we have 160. So to me, I'm looking at a 60 employee team and I'm like, oh my God. So walk in the park.

[Brandon]

Yeah.

[Jack]

You have like two managers, like a couple people in the call center. Like it's just not. Is nowhere near the level of sophistication that I agree.

[John]

I think from a sophistication level it's right at that turning point. So my, my mentality, and this is probably the same mentality that you came into and we're you looking back, you go, oh, I was wrong. Or maybe that was the goal. And once you pass, you went, oh, it really is small. But my mentality currently is that the 20 million mark is where you can actually start hiring C suite team and it starts to get easier. So you rock around. I don't think 20. 20 million. You could put a, a CFO in place. A CMO.

[Brandon]

Nope.

[John]

Too small.

[Jack]

Too small.

[Brandon]

Yeah.

[Jack]

It's 60 people. Yeah. Or like 80 people at the max.

[Michael]

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[Jack]

It's not that many people and I.

[John]

Think there's a differentiation. Right. I will say I agree with you, but I do think that there's a differentiation between a 60% H vac only company, 100 and like three plumbing or something like that.

[Jack]

Yeah.

[John]

Two $10 million H vac and plumbing and then one, you know, $1 million electrical or some. Some.

[Jack]

Because. Because our revenue, like we've got drains. We have. Yeah. H Vac plumbing, electrical restoration. Like our headcount to revenue looks different.

[Brandon]

Yeah.

[Jack]

Than H Vac only. Like our headcount to revenue. I think we're at like 220 per employee.

[Brandon]

Yeah.

[Jack]

300 something per field person, but 220 something per employee.

[John]

Yeah, which makes sense because like I was, I was salivating over buying a business the other day. I was like, yes, this a good business, good name. Then I broke them in the books and it's like okay, this business really is mostly an H vac company, like 60%. And then the other break was in plumbing and electrical. Yeah, but like a two man plumbing team. A two man electrical team or like a one man plumbing team. One man electrical team. And when you break it down like that, this $3 million company really is a $2 million H vac company and they decided that they're going to do too much with these other two things that are just going to drive headaches. So yeah, you know, it's much, you.

[Jack]

Know there's, I've been talking with a lot of multi location operators and I think I understand that. You know, this all started because I said 40 million like isn't that much and I still roughly agree with that. I think it's mostly like headcount related. So you know, take that for whatever you want. But I think 40 million is just not that much. If 40 million is like 200 employees for, for us. So that's so you know, complicated business. But it, you know. Yeah.

[John]

Doubling down. John is doubling down. Doubling on 40 million is not that much.

[Jack]

Doubling down, doubling down. I guess maybe it's double clicking. Maybe it's because it's within. I like I can see it like 40 million is next year for us. I'm like.

[John]

Maybe it's just me because I deal with a lot of people who are in the smaller, you know, 3, 4 million really trying to break that first 5 million mark. And you, and you remember it's a grind, it really is a grind early on. And so we look at these numbers like 10, 20 million, 40 million as like this holy grail of oh, once I get there it'll be better. But ironically the thing that I've found out by working directly with you is that the problems are actually the same.

[Jack]

Yeah.

[John]

Like it's 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]

Like almost worse. Yeah.

[John]

I mean because you missed by 20% at if my goal is 150k and I missed by 20%, like that's two units. Yeah, I got sell two more units next month. Like I can make that up for us.

[Jack]

It's 100 jobs.

[John]

Yeah, it's a lot, it's a lot of work and that's almost scarier for me to a point to like I've idolized this position of 20 or 40 million. 20 million has been my idolization. Like I want 20 million by 2030. And so like I can finally hire C suite who can like help me out. And you're here, you're just killing my dreams.

[Jack]

But well, you can't. Well, I think like you could hire some people, but yeah, like we're not even. A CFO is sometime in the next couple of years. But a CFO needs enough money to do something with like they're, you know, that's a sort of a core part of their job. And like is our reporting tight? Is our accounting? Like there, there needs to be a lot of other stuff in place before a CFO can come in and actually do CFO level shit. If you just want someone to close the books, that's not a cfo, that's a controller. So just like maybe know who you're hiring for cmo. Like we're not even thinking about that. Like some people talk about it at 50 million. So 2, 210, 20 employees.

[John]

Yeah, I think it's more like essentially it's really just. Yeah. You don't have a cmo, but you're not handling the day to day marketing operations. Correct.

[Jack]

Right.

[John]

You don't have a cfo, but you're not handling the day to day finance operations. And so when I say C suite team, it's not necessarily like the title of a C suite person. It's more so the idea of other people are handling this, other people are handling departments where they're fully handling department and you as the owner are no longer doing the individual.

[Jack]

You still own them. Like to start to give perspective. Agree.

[John]

But it's a different ownership.

[Jack]

No. I sit functionally in the cmo, CFO and CEO seats. Today I am the functional cfo. Like the roles, the tasks that a CFO that if I went and hired one off market would perform would be like 30% of my time.

[Brandon]

Yeah.

[Jack]

So they would come take that and then hopefully do a lot more. But like I'm sitting in that role. So we're, we're not there yet. Yeah, I, I think I, I also probably thought that CFO was 20 million, but like it's just not.

[Brandon]

Yeah.

[Jack]

And half of the education was. What does a CFO really do?

[Brandon]

Yeah.

[John]

Which to be honest, I'm not 100 sure because we see the terms fractional CFO and see it, you know, a.

[Jack]

Lot of times, which I like hot take. I Think the fractional CFO is kind of dumb. Most of the time people just need a controller. Controller.

[John]

Yeah, yeah, controller. So we just need a staff accountant to be.

[Jack]

Yeah, yeah, exactly. I think. Well, so I made that mistake too. Like, hey, I just needed someone to literally do my accounting. Yeah, like that's staff accountant. And maybe a senior staff accountant. Definitely a controller at 10 million. And I was hiring fractionals, expecting them to solve it. And it's like they couldn't do anything because I didn't have an account. Like you literally need clean books for a CFO that you'd do anything.

[Brandon]

Yeah.

[John]

So, but that's the same for like you don't need a cmo. But I do need somebody to manage the people who are managing the LSA accounts, the PPC accounts, the ROI on all those. You need somebody in charge of strategy who can handle the strategy behind, hey, are we going to do this or are we going to spend it like this? And so I do think 20 million is that point where you can start making some really good.

[Jack]

We built very senior teams. Yeah, we built very real teams. I think, I think.

[John]

What does that mean, very real teams?

[Jack]

So I just did this episode with Brandon.

[Brandon]

Yeah, we.

[Jack]

Something that we've invested a ton of time and energy and dollars into is elevating or bringing in senior leaders. Frontline leaders too. But I'm really focused on the senior leader portion of the team. And so when we're talking about real teams, I mean I have teams now that are performing not just tactical tasks but also strategic tasks with little to no supervision from me. So Jesse and I will have a conversation on something in marketing and the impact is hopefully millions of revenue, 100 to 200,000 of cost investment and we'll like work through it. It was his idea, he brought it to me, we talked through it. His team executes on it. But like all of our senior leaders are doing something like that. Sales to fulfillment to inside operations to marketing to finance, everyone. So there's those five buckets of senior leaders, HR6. So everyone's working on similar level of strategic projects. It's no longer this tactical day to day stuff.

[John]

So this is a really, I think important question that for me. So at that point, right, you have these teams in place, you've done a good job. Jesse's talking to you. Yeah, marketing's talking to you. HR talking to you.

[Jack]

Yeah.

[John]

You're this kind of top position that's dealing with senior leaders or six of them, which is sounds about right for headcount wise and Direct reports. Are you at a point though where you could replace yourself because. Right. Or more.

[Brandon]

More.

[John]

The better question, for my personal sake is at 20 million, were you at a point to be able to replace yourself?

[Jack]

No.

[John]

Effectively?

[Jack]

No. But I also, I also didn't see that as an option.

[Brandon]

Yeah.

[Jack]

Today's break is brought to you by Owned and Operated newsletter. Go to owned and operated.com and sign up for a twice weekly drop that we send to 40,000 contractors with actionable tips on marketing, hiring and growing your business. Join the 40,000 other Home Service contractors already signed up and learning. Enjoy the rest of the episode.

[John]

So.

[Jack]

So something that's been like recycling through my head a lot is when we had Michael Gurdley on it was like episode number three or four and love him. He's a lot of fun. We're partners on Holco Comp. And in that episode, I remember it, he was sitting inside his software company Dura. He just hired a CEO. I don't remember that guy's name. And they had just crossed 200 employees. And he was sort of describing his day to day life and his day to day life was. He was just like, I don't really know what to do. Like there's. Which, you know, we've talked about this a lot. I'll get to. But I don't really know what to do. At 200 people. Every single thing that could be done inside a business tactically hands on something is being done by someone. Like that is someone's job. Opening the mail is someone's job. Making coffees is someone's job. Like everything is owned. There's no more floating tasks that the owner has to pick up with a bucket. And that happened for us recently where in total like 162 employees in Wilson. But in total we're at 182. That's, you know, there's like a few other things in there. So 182 team members and we. I, there's nothing for me to catch anymore. And so I, this is the point. We talk about it a lot. When owners cross $3 million where they cost 3 million, they're like, well, I'm kind of out of the day to day. And what they mean by that is they're no longer turning wrenches.

[Brandon]

Yeah.

[Jack]

And they're like, well, what do I do? So then they go buy a boat and a lake house or whatever. I'm not going to go buy a boat. But, but it's a similar, like, oh, okay. Everything I have been doing is now functionally Replaced and a big part of why that happens. Some of its headcount. Obviously we hit it before Michael did for whatever reason. Different industry, I don't know. But a lot of it was senior team. Like the senior leadership team. Like they are doing an incredible job, like just a really incredible job, every single one of them. And they've all stepped up into this, like into real leaders. And I think that has made it so that I'm now sort of like, okay, strategically, tactically, there's nothing left for me to catch. If I, if I don't come into work today, we're still going to do 150 grand of sales. Like, nothing will change on our p. L. If I don't show up for the next week. I'm about to piss off for two weeks. And like nothing's going to change the vibe.

[John]

The vibe is going to change.

[Jack]

The vibe will change the vibe. There will be less high fives around the office, which is good. That means we built a team that's very capable of just like running this ship. So yeah, I could replace myself or I could be like, what's the strategic thing I should be focusing on? So, you know, we've talked a lot about like leadership and how it develops as the company grows. Like I'm in this new stage of leadership where I'm really focused on coaching the senior leaders.

[Brandon]

Yeah.

[Jack]

Because if I don't show up for two weeks, it doesn't matter. Like, vibes would be off and like that would be irresponsible. But like, if I wasn't on vacation, vacation's good rest. But if I just like pissed off for two weeks, like, I know these small business owners are like two or three million dollars and they just like go on like a two week bender. Like. Yeah. So not me, but the senior leaders now, like they've taken on the brunt, the weight that I used to carry. So your question was, can you do that 20 million? And the answer is yes. I didn't.

[Brandon]

Yeah.

[Jack]

And it was fully. Because our senior leaders just weren't there yet. I think if I had, it's one of those, I've done it once, I would do it differently now. Things where I'd like, I'm working on a project with some friends and it's growing fast and I'm approaching that like, oh, we're at $5 million now. We're hiring senior leaders today.

[Brandon]

Yeah.

[Jack]

Like we're solve this.

[John]

Well, that was kind of the question.

[Jack]

Where I was like, I, you know, but that's because it doesn't matter. Like, that's not, you know, we have the cash flow and it's like a different thing. And I've done it. So I. Now I just know the steps. Okay. Yeah. Okay, great. Five million bucks. We'll probably be at 10 next year. Let's just hire a controller now. Let's eat that salary. But I could have never made that decision because I didn't know the steps five years ago.

[John]

You know, the steps, the position with the job industry looks like what they're supposed to do.

[Jack]

Yeah.

[Brandon]

Yeah.

[Jack]

It's so, like, you can do it at 20 million. Like, if I was regrowing a new business today and I was going from 10 to 20, I would. At 10, I would be hyper focused on the leadership team and building them the way that we've done it now. At 30.

[John]

Yeah. I was going to ask, do you think that would increase velocity or do you think that would slow velocity? Because. Right. A lot of times the worry is.

[Jack]

Yeah.

[John]

Well, a lot of times what actually happens. Right. Is a, you're too small maybe at that. Eight to 10 million.

[Brandon]

Yeah.

[John]

They replace themselves with a CEO or president or GM or whoever who has P and L responsibilities. This person doesn't care that much.

[Jack]

Yeah.

[John]

Or they're not great at their job or they haven't been trained well. You know, like the myriad of things that could potentially happen and then it slows velocity. They get fired within a year, owners back in running again. Do you think that there's a potential at some point? And what point is that where. Where you could continue with that velocity at the rate that it's at? Because my belief is that it doesn't happen without multiple good leadership team in place. You can't just change out the top and then hope it runs well. It's like, hey, you need kind of multiple people who all understand culture, understand the drive, have fit, have worked, and that is the 20 million mark.

[Jack]

Yeah.

[John]

But I'm open to your take on that.

[Jack]

Yeah. I mean, I don't think it needs to be 20. Like the. The. So rolling through our leadership team, you know, we. The most important investment that we've made in our team has been our leadership development program. And there's two tiers, and we just broke this down a ton with Brandon. One of the episodes aired. The other one I don't think is aired yet. But, like, we went kind of deep on this where we cover the first two tiers of leadership, we do not cover the third. And that's a really big gap that we're going to try to resolve in the next year. So we have a now a way to elevate frontline team members to leaders consistently. Like that's now a machine. So it's no longer a herculean push a boulder up. It's just like, okay, this is a process now. So I think that has made a lot of things easier because we have people who understand the business, the culture, the problems, the opportunities, being elevated into leadership positions. And it's like the best of us core value. Like these are amazing. People bought into what we're doing, being elevated. Like, it's awesome.

[Brandon]

Yeah.

[Jack]

And then so half of our leadership team now at this point, half of our frontline leaders were promoted into that position from the field.

[John]

Just crazy.

[Jack]

Yeah, half of our. Or not even half, every single one of our senior leaders was promoted into their position from lower in the company. Some much lower.

[John]

Like someone that's like the stories of like the guy who used to wash dishes and then now is the CEO at one point. It's always the inside.

[Jack]

Well, I've talked a lot about Allie on the show. Allie came in as a call taker. She's a director now. Like she's literally damn near top of the org chart. Yeah. But so Jesse came in as marketing manager. He's director of marketing now. It started with just him and now he has like 10 people reporting to him in his team. Paul came in sales, management Director, Sales. Now 60 people in this vertical. Lori came in as call center manager. She now has 30 people in her vertical. She has dispatch call center. She has inside operations, which is like a lot. There's a lot going on there. So some people came in as managers, some people came in as individual contributors. But they've all been promoted through there.

[John]

That's incredible.

[Jack]

So I think they can happen. Like if I was doing this again, what I would be focusing on, and I want to focus on, let's say Lori for a second. We just did a great episode with her, like breaking out how to manage remote calls. I think that was like a month ago. She's amazing. And if I was doing this again and I was at $10 million, I would be hiring amazing managers that I think could elevate to senior manager or director at some point.

[Brandon]

Yeah.

[Jack]

Because that has been the win for us. Like having a Jesse and a Lori and an ally and a Brandon who have all gone through frontline leadership. Like they're directly managing the work being done, whether it's call taking or technicians or whatever. And then being able to continue to Move them up to the organization and, like, build teams to support excellent people. That has been the win. So at 10 million bucks, I would like. If I came in and bought a $10 million company today and I had to replace the whole leadership team, I would just do it in one fell swoop. Like, how can I. How can I place six people immediately? Because I feel like it would be solved by the time you hit 15. Like, they would need, like, a year to, like, get their feet under them, but then they're. They're good to go.

[John]

That's super interesting. That's actually a lot of really good information because we, like I said, we're trying to get there in the next year.

[Jack]

Yeah.

[John]

So we'll be. We'll be crossing that. And it's a lot of. It's a lot of movement. Yeah, it's a lot of movement. And if you try to move them up from within, now is the time to start that, that procedure. I think it also.

[Jack]

If you can get people that are bought in now, like, we have some frontline leaders that are not yet, but within the next year, like, they're going to be ready for their vertical movement. So we have to, you know, continue creating opportunity for them. But I think being able to build teams under smart people has been the win.

[John]

Well, and I mean, from a cultural standpoint, from a upward mobility standpoint, is like, you want people who are high achievers, you want people who want to win. And those people are not going to stay somewhere where they're stagnating. There's no growth. And so creating the opportunity, even outside.

[Jack]

Of that, like, operationally, our hit rate for hiring an outside manager, like, our success rate is like 30%.

[Brandon]

Yeah.

[Jack]

Like, it's low.

[John]

Well, and because culturally, they're coming into something they don't necessarily understand, no matter.

[Jack]

How we don't know them. Well, they don't know us. We don't know the team. They don't know the problems. Yeah. Like, it's. It's. It's probably 30 and. And that might even be generous. Like, we've had a really tough time over the years placing outside managers in. Now, we have had some success stories and they're doing great. Like in H vac, we've got some great outside managers plumbing. We have one outside manager, and they're doing amazing. But just in general, we've let go seven, you know, in sort of the same, you know, timeline. Whereas our hit rate, like our success rate for promotion is 100%. Like, we have not up a promotion ever for moving them up to manager. So. So from like a surety of success. Yeah. Inside hires, for sure.

[John]

Amazing. So what it sounds like to me to recap is 40 million is a tiny little business. Super small, Not a big deal. If you're below that, screw you, buddy. You don't know what you're doing.

[Jack]

I think it's probably better to put it in relation to headcount because I do struggle to see a business under 100 employees as like, that real. Because you're still missing fundamental systems departments. I mean, you're. You're literally missing entire departments at 100 people. You don't have an HR department. Like, you probably have some outsourced HR thing. Like, you don't know how to handle HR at scale yet. You don't have a full marketing department. You maybe have like a coordinator.

[Brandon]

Yeah.

[Jack]

Your accounting department is one or two people. Like, it's just not. It's not like filled in yet. It's not mature.

[Brandon]

Yeah.

[John]

It's not a mature business. And with that, there is really great things that you can do early on though. 10 million, 20 million is start to hire frontline leaders, start training them, getting them ready for division managers or directors positions. Sounds like. Which is awesome.

[Jack]

Yeah, I would. If doing it again, I would have hired senior leaders much earlier or people that I thought can be really talented senior leaders. I would have hired a controller at like $8 million. Like we. This business that we have, it's like working on, it's like $5 million this year. We're going to hire a controller this year. Just so it's done. Like, I'm done. I'm done not having good financials. Yeah.

[John]

Well, it's so important and. Yeah, that's awesome. Sweet. So, I mean, that's. That's the basic. 4 million is not anything, but. But if you are 20 million or 10 million, you can start hiring those positions that make it a real business.

[Jack]

I say it's not anything.

[John]

Just I'm just condensing. Recap. Recap.

[Jack]

Yeah, I make sure to like, subscribe.

[John]

And let John know that he's. I. He still owes me one because, like last week he was right about something and I just need you guys to absolutely tear him apart in the comments. Yeah, please. Yeah, me for the little guy. Take down the man.

[Jack]

Just like get to 20.

[John]

Just like. Yeah, you're right. You know, I haven't been just trying to just do it over the last like four years.

[Jack]

Just do it, bro.

[Brandon]

We'll be there.

[John]

Just get to 40.

[Jack]

Just like I mean, I'm not there yet. So in my example, I'm not yet a real business.

[John]

Damn.

[Jack]

It's tough. It's tough for me to hear self.

[John]

Deprecating things right there going.

[Jack]

Yeah, it's tough for me to hear like, we still feel a little wild west. Yeah, 40 will be grown up.

[John]

Oh, I love it.

[Jack]

Like sub.

[John]

Like and sub.