Podcast Summary: How Smart Home Service Owners Should Invest (P&L, EBITDA, and Enterprise Value)

Podcast: Owned and Operated: A Plumbing, Electrical, and HVAC Business Growth Podcast
Hosts: John Wilson & Jack Carr
Date: December 18, 2025

Overview

This episode dives deep into the mindset and practical frameworks home service business owners should use when deciding how to invest in and outside their business. Hosts John Wilson and Jack Carr explore how to think about ROI, resource allocation, enterprise value, and the critical role of operating expenses in maximizing both profit and long-term valuation. They candidly discuss personal experiences with growth, mistakes, experiments, and the nuanced decision to diversify business returns into other investments.

Main Discussion Themes

1. You Are an Investor—Even If You Don’t Realize It

• John Wilson: Stresses that every home service owner functions as an investor, even if they don’t identify as one. Owners are constantly investing resources, attention, and people. (00:00, 37:24)
• Quote:

  "Whether or not you think of yourself as an investor, as the owner of a small plumbing company like you are, you're investing resources, you're investing attention and people." – John Wilson (00:00, 37:24)

2. Growth Patterns & Easy Levers for Smaller Companies

• Jack Carr: Shares that smaller businesses can often leverage simple tactics (“easy buttons”) for rapid growth, like turning on LSAs (Local Services Ads) or answering phones during weekends.
• John: Notes that as a business scales, those easy buttons become exhausted, requiring more sophisticated growth strategies like optimization and acquisitions. (02:14–05:21)
• Quote:

  "We're seeing companies in the $1-3 million range still growing 50% year over year just by turning on LSAs or picking up the phone on weekends." – John Wilson (02:43)

3. Investing Inside vs. Outside the Business

A. Why Focus Inside First

• Reinvesting in your own business yields the fastest and highest returns, especially early on.
• Jack: Owning a business is attractive because of the “asymmetrical returns” when reinvesting in yourself. (07:54–08:28)
• John: The core business tends to offer better ROI than external investments, especially in the early growth years.

B. Capital Allocation Framework

• John shares his decision-making lens for expenses: Always ask, “Will this expense yield a return at least equal to your business’s multiple?”

  • E.g., If your company sells at a 3x multiple, every recurring $1 expense should return $3 in enterprise value. (10:58–12:29, 14:58)

• Example: Spending $3,000 per month on a software like Price Book Pro should deliver enough value to justify its impact on EBITDA and, thus, company valuation.

• Quote:

  "If you're bringing on an expense, what should the ROI be? Is the expense you're going to bring in, will you get a three times return? Because if you don't, should you do it?" – John Wilson (00:16, 11:54)

C. Balance Sheet vs. P&L Investments

• P&L (Profit & Loss) investments: People, software, marketing—impact EBITDA and therefore the enterprise value directly.
• Balance sheet investments: Tools, facilities, vehicles—often easier to track direct revenue impact but less influence on valuation at sale or bank financing.

4. Running Profitable Growth: Discipline Over “Pedal to the Metal”

• John: Explains how their company shifted from relentless spending for growth to being disciplined about profitable months and smart evaluation of every investment.
• No unprofitable months for almost two years—focus on sustainability over vanity metrics. (10:58–12:29)

5. Managing Attention & Leadership Bandwidth

• Jack: Introduces “Return on Attention” (ROA)—some investments (like a GM) don’t just impact P&L, but free up owner’s time for high-value activities. (15:46–16:27)

• John: Emphasizes the danger of spreading leadership too thin with too many initiatives. Two to three major projects per year is optimal, even for companies with a substantial leadership team. (22:33–23:51)

• Quote:

  "We have three priorities next year. Like really two. As we've gotten bigger, we've focused on less because we used to be all over the place." – John Wilson (23:58)

6. Enterprise Value: Build Always Like You Might Sell

• Both hosts stress: Always maintain a “somewhat saleable” business—keep financial discipline, clean P&L, and a focus on EBITDA, because this is what lenders and potential buyers care about.
• Building a sellable company benefits growth, bank credit, and exits. (15:06, 26:52)

7. When and How to Diversify Beyond Your Core Business

• Early diversification (real estate, side projects) can be a mistake, diluting focus and returns.
• John: Changed course—sold off side ventures to reinvest in main business, arguing, “focus gets you rich, diversification keeps you rich.” (28:25–29:54)
• Once the business is throwing off reliable profits (millions in EBITDA), consider separating cashflow (“A bucket”) versus enterprise value (“B bucket”) investments—referencing a Warren Buffett model. (33:09)
• Quote:

  "Focus gets you rich, diversification keeps you rich... I learned how multiples worked, and suddenly it became way easier because it was like any dollar that I spend outside the core business, for a while, I was just choosing to lose money." – John Wilson (29:54–31:05)

8. Personal Cash Flow Strategies for Founders & Growth

• Fastest growers often have a separate cash flow source (e.g., spouse's income, side businesses) to personally support themselves, allowing them to reinvest nearly all business earnings into growth and enterprise value. (35:44–36:19)
• Quote:

  "Some of the guys growing the fastest I know—they have an external source paying for their life, and they're just reinvesting 100%." – John Wilson (33:09–35:44)

9. Final Thoughts: Your Real Job is Resource Allocation

• John’s closing advice: Business owners are ultimately investors—allocating not just capital, but people, attention, and resources. If you’re not comfortable with that, you’re in the wrong seat. (37:24)
• Jack: Making smart investment choices is the quickest way to move from “owning a job” to owning a valuable business. (38:28)
• Quote:

  "Your entire job is resource allocation. Whether it's people, capital, or attention—that's the job." – John Wilson (37:24)

Notable Quotes & Memorable Moments

• ROI Rule of Thumb – "Is the expense you're going to bring in, will you get a three times return? Because if you don't, should you do it?"
  (John Wilson, 00:16, 11:54)

• Easy Levers for Small Companies – "We're seeing companies in the $1-3 million range still growing 50% year over year just by turning on LSAs or picking up the phone on weekends."
  (John Wilson, 02:43)

• Leadership Focus – "Even with a big leadership team, two to three projects at the same time is a lot. Any more than that is just burning cash."
  (John Wilson, 22:33)

• On Diversification – "Focus gets you rich, diversification keeps you rich."
  (John Wilson, 29:54)

• Resource Allocation – "Your entire job is resource allocation... that's the job."
  (John Wilson, 37:24)

Key Timestamps

• 00:00 – Framing owners as investors
• 02:14–05:21 – Growth opportunities for small vs. large businesses
• 07:24–08:52 – Discussing types of investments inside your business
• 10:58–12:29 – Framework: ROI tied to your business’s sales multiple
• 14:58–15:46 – Expense examples and responsible investment
• 15:46–16:27 – Return on Attention (ROA): Investing in leadership
• 22:33–23:51 – Leadership bandwidth and managing simultaneous projects
• 23:58–25:49 – Narrowing priorities as you scale
• 26:52–27:44 – Why EBITDA is all lenders and buyers care about
• 28:25–29:54 – Diversification: pros, cons, and timing
• 33:09–35:44 – Warren Buffett’s A/B bucket for cash flow vs. enterprise value
• 37:24–38:36 – The owner’s job: resource allocation and the path out of “owning a job”

Conclusion

This episode provides a practical yet thought-provoking masterclass in smart investing for home service business owners. John and Jack demystify how to grow responsibly, how to evaluate every investment or expense, when it's time to diversify, and—most importantly—how crucial focus and discipline are for long-term business value. Their candid stories, frameworks, and quotable insights are invaluable for owners at any stage wanting to build a thriving, sellable company.