Owned and Operated - Episode #220: Buy vs. Build: Start or Acquire Your First Business?

Release Date: July 8, 2025

In Episode #220 of the Owned and Operated podcast, hosts John Wilson and Jack Carr delve deep into the perennial debate of buying versus building your first HVAC or plumbing business. This insightful discussion provides listeners with a balanced perspective, drawing from the hosts' personal experiences and industry expertise. The episode is meticulously structured to guide aspiring entrepreneurs through the complexities of making this crucial decision.

1. Introduction to Buy vs. Build

The episode opens with Jack addressing a frequently asked question from listeners: whether to buy an existing business or build one from scratch. He emphasizes the importance of entering the market, stating:

Jack Carr (00:00): "The one that I do get a lot question is buy or build. Specifically in HVAC and plumbing. I still live by the motto of it's better to be in the game than not at all."

John briefly chimes in, setting the stage for a comprehensive discussion.

2. Perspectives on Buying a Business

Jack's Approach:

Jack shares his experiences with acquisition, highlighting scenarios where purchasing a small business proved advantageous. He recounts a personal success story:

Jack Carr (03:29): "I bought that size of a business and the only thing I'll say that the benefit of that was that my phone was ringing day one."

He underscores the immediate cash flow benefits and market dominance that can come from acquiring a well-positioned business.

John's Concerns:

Conversely, John raises concerns about the current market conditions affecting acquisitions. He points out:

John Wilson (04:12): "But if shit's expensive, which right now interest rates is a thing on acquisitions. I'm not all geared up on deals right now."

John is wary of the high interest rates making acquisitions financially daunting and stresses the potential cultural mismatches that can arise when integrating a newly acquired team.

3. Building a Business from Scratch

Jack's Philosophy:

Jack champions the idea of building a business, especially in today's dynamic market. He reiterates his belief in the importance of risk mitigation:

Jack Carr (05:21): "As long as you're doing some risk mitigation. Because I think there's enough opportunity on the whole that if you can just get in the game, you can change your life and win."

He acknowledges that while building offers control, it comes with its own set of challenges, especially for those new to entrepreneurship.

John's Insights:

John complements Jack's view by emphasizing the significance of cultural fit when starting fresh:

John Wilson (08:29): "Which I think you're going to have that in my big."

He explains his low tolerance for operational inefficiencies and cultural misalignments, preferring to build a team that aligns with his values and operational standards from the outset.

4. Resource and Skillset Considerations

A substantial portion of the discussion revolves around the resources and skillsets required for both buying and building.

Jack's Take:

Jack highlights the risk profiles associated with each approach:

Jack Carr (17:40): "I think the answer is like, what's your skill set?"

He advocates for aligning one's personal strengths with the chosen path, suggesting that operationally minded individuals might lean towards building, while those with strong marketing or financial backgrounds might find buying more feasible.

John's Counterpoints:

John counters by addressing the financial implications of starting a business with limited funds:

John Wilson (26:00): "I think if you say I'm going to go out and buy a, a million dollar business, SBA is going to say what, 10% down? So that's 100,000."

He argues that starting a business requires substantial initial capital, especially to cover operational costs and generate sufficient cash flow, making buying less attractive in high-interest environments.

5. Market Conditions in 2025

The hosts analyze the current market landscape, particularly focusing on interest rates and their impact on business acquisitions.

John Wilson (30:03): "Yeah, that's where my kind of thinking is. In 2025 I will say that interest rates suck."

They discuss how the high interest rates (around 9-10%) make financing acquisitions more expensive and less appealing. Additionally, they touch upon the labor market, contemplating the sustainability of trades amid technological advancements and AI integrations.

Jack Carr (31:08): "The safe investments are Hands on my thinking. Maybe, maybe not."

Both agree that while the market remains robust, the cost of borrowing and operational challenges necessitate a careful evaluation of the buy vs. build decision.

6. Summing Up and Final Thoughts

In their concluding remarks, John and Jack summarize their respective stances, recognizing that neither path is universally superior. They emphasize the importance of personal circumstances, financial readiness, and skill alignment in making the decision.

Jack's Final Words:

Jack Carr (38:50): "I still say buy because if you can get a good brand that has some level of trust, you can retain most of the customers on your first buy."

He encourages listeners to enter the market strategically, leveraging existing brands and customer bases to ensure immediate cash flow and business stability.

John's Closing Argument:

John Wilson (26:14): "I've never heard of her. What?"

He reiterates the value of building from the ground up, especially for skilled technicians who can command higher wages without the financial strains of starting a new business, advocating for a low-risk, high-control approach.

Notable Quotes with Timestamps

• Jack Carr (00:00): "It's better to be in the game than not at all."
• John Wilson (04:12): "If shit's expensive, which right now interest rates is a thing on acquisitions."
• Jack Carr (05:21): "There's enough opportunity on the whole that if you can just get in the game, you can change your life and win."
• John Wilson (08:29): "That's cultural. That's a cultural problem. And that's what sounds like a pain in the balls to me."
• Jack Carr (17:40): "What's your skill set?"
• John Wilson (26:00): "I think if you're starting with 100,000, you should not start a business."
• John Wilson (30:03): "Interest rates suck."
• Jack Carr (38:50): "You can retain most of the customers on your first buy."

Key Takeaways

1. Buy vs. Build is Contextual: The decision hinges on individual circumstances, including financial capacity, skill sets, and tolerance for risk.

2. High Interest Rates Impact Acquisitions: Elevated borrowing costs make buying less attractive, tipping the balance towards building for many.

3. Cultural Fit is Crucial: Whether buying or building, ensuring cultural alignment within the team is paramount to avoid operational hiccups.

4. Skill Alignment Drives Success: Entrepreneurs should critically assess their strengths—operational or marketing—to determine the most suitable path.

5. Market Conditions are Dynamic: Staying informed about economic factors, like interest rates and labor market trends, is essential for strategic decision-making.

Conclusion

Episode #220 of Owned and Operated provides a nuanced exploration of the buy versus build dilemma for aspiring HVAC and plumbing business owners. Through candid dialogue and real-world experiences, John Wilson and Jack Carr offer invaluable insights, equipping listeners with the knowledge to make informed, strategic decisions tailored to their unique business ambitions.

For more in-depth discussions and actionable advice, visit www.ownedandoperated.com and tune in to future episodes every Tuesday.