Podcast Episode Summary

Podcast: Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast

Episode: The REAL Cost of Running a Trades Business in 2025 — What Most Owners Don’t Understand

Date: December 30, 2025
Hosts: John Wilson and Jack Carr

Episode Overview

In this candid year-end review, John Wilson and Jack Carr reflect on the realities and surprises of operating plumbing, electrical, and HVAC businesses through 2025. Their honest discussion covers wins, challenges, essential lessons, and strategic pivots—especially concerning recruiting, cost control, leadership development, and the ever-evolving landscape of the trades industry. The episode is peppered with concrete data, actionable advice, and a level-headed look forward to 2026.

Key Discussion Points & Insights

1. Headlines & Core Lessons of 2025

• Always be Recruiting: Both hosts stress that recruitment was make-or-break in 2025.
  • “Don’t skip out on recruiting, otherwise you’ll feel a lot of pain” – Jack (00:01)
  • Plumbing and HVAC sectors saw divergent fortunes due largely to their ability to recruit and retain talent.
• Changing Industry Environment: HVAC suffered a tough year industry-wide due to factors like refrigerant transitions, supply issues, and mild weather, while plumbing unexpectedly outperformed.
  • “October HVAC shipments cratered 49% year over year” – John quoting industry news (04:49)
• Variable Overhead & Nimbleness: Emphasized the need to keep overhead variable to weather unpredictable market shifts.

2. Business Wins & Successful Decisions

• Leadership Hires: Bringing on a new plumbing manager changed the game for Jack’s business.
  • “Good leadership really moves the boat.” – Jack (08:09)
• Financial Transparency: Opening up the P&L to both frontline and senior leaders improved buy-in and sharp decision-making.
  • “We do a monthly net profit financial session … frontline and senior leaders knew the score with that.” – John (08:26)
• Effective Communication Habits:
  • Jack: Instituted focused, 15-minute daily huddles for team alignment (11:21)
  • John: Leadership cohorts and structured leadership development paid compounding dividends (11:48)

3. Misses, Challenges & Unexpected Setbacks

• Recruitment Misses: Losing two top HVAC techs cost Jack’s company $1M in potential revenue during peak season (13:15).
• Incorrect Pricing: Pricing not aggressive enough—leading to high close rates but leaving profit on the table.
• Delayed Reactions to Market Changes: John’s business reacted slowly in cutting costs as revenue lagged preset budgets, showing the pain of carrying fixed overhead in a variable world (15:37–18:33).
• Personnel Decisions: Both acknowledged holding onto underperformers too long and the value of adopting a “hire fast, fire fast” mentality (19:07).

4. Surprises & Unexpected Lessons

• HVAC Was Tougher Than Ever: Both were hit by unexpected technical and market challenges in HVAC (20:04).
• Mental Load of Leadership: John discussed the stress and mental health challenges for owners during tumultuous and uncertain months.
  • “How do I show up every day for my team? ... I didn’t show up in, like, the way that my team needed.” – John (21:06)
• Change Management Can Be Smooth: Jack was surprised by how easily managers accepted (and craved) new structure once he rolled it out (22:35).
• Financial & Operational Data Simplifies Decisions: The more (and clearer) the data, the easier it is to make tough calls (24:16).

5. What Ended Up Not Mattering?

• AI/Future Tech: Despite fears, AI search and automation had no major impact on leadflow or the bottom line in 2025 (26:11).
• Acquisitions: Attempts at new acquisitions fizzled as the market was overpriced ('Nashville was too hot') or deals didn’t make sense (26:52). Last year’s acquisitions continued to show value, but no new ones landed.

6. What They’d Change in Hindsight

• Move Faster on Financial Data Systems: Wish they’d implemented robust financial and job-cost tracking sooner for faster and better decisions (28:56).
• Emphasize What's Working: Plumbing generated outsized growth and should have received even more attention (29:35).
• Stop Pursuing Unprofitable Verticals Sooner: Jack would’ve ended plumbing new construction work earlier (31:12).
• No More Premature Resource Investing: John notes he’d stop putting out salary and equipment before the department or project proved its revenue potential (31:34).
• Protect Focus (and Health):
  • Jack: Focus. Never let less-critical departments drift (33:21).
  • John: Health. Not enough exercise, not enough balance (34:04).

7. Themes & Mindsets for 2026

• Always Be Recruiting (ABR): Jack’s main takeaway—proactively recruit even when fully staffed (34:48).
  • “My one rule for 2026: ABR—always be recruiting. ... That’s what kicked our ass in 2025.” – Jack (34:49)
• Lean and Lethal: John’s 2026 motto—trim processes and reduce red tape, stay nimble.
  • “Our mindset for next year is lean and lethal. ... Process can’t get in the way.” – John (35:30)
• Leaving Behind Vibes for Data-Driven Plans: Moving from 'vibe'-driven budgets to granular planning based on ROI, gross margin, and net profit (37:32).
• Financial Clarity and Real-Time Tracking: Constant pulse on gross margin, profit, and departmental performance enables rapid course correction (39:10, 44:27–46:05).

Notable Quotes & Memorable Moments

• On the fallacy of revenue and the importance of gross margin:
  • “There’s a misconception ... I sold you an HVAC unit for 10k, I know you can buy that thing for 4—you guys made $6,000. No, we didn’t. All that goes into overhead ... At the end of the day, [the team] get[s] an actual view under the hood.” – Jack (10:42)
• On the value of leadership transparency:
  • “Just open up your P&L to the team ... talk openly.” – John (10:03)
• On not reacting fast enough to bad financial signals:
  • “We started noticing an issue in June ... we believed in [the plan] ... In August, it’s like, hey, three months in a row we are not where we thought.” – John (16:47)
• On hiring and firing lessons:
  • “Some of the best interviewers ... are people who do a lot of interviewing because they’re good at interviewing, not good at their job.” – Jack (19:07)
• On moving from ‘vibe’ to a regimented plan:
  • “Our budget was kind of a vibe ... now it’s a 15-page document with exactly the steps we will be performing ... half of that list has already been implemented.” – John (37:32)
• On focusing on gross margin as true business ‘revenue’:
  • “Our real revenue now is gross profit.” – John (48:28)

Key Timestamps

• 00:01 – Don’t skip out on recruiting—central theme for 2025
• 01:32 – Business round-up: turnaround mode, plumbing division struggles
• 04:49 – “October HVAC shipments crater 49% year over year”
• 08:26 – Opening financials to team, monthly net profit sessions
• 10:42 – Employee misconceptions about revenue and the reality of overhead
• 11:21–12:28 – Habits/systems: daily huddles and leadership cohorts
• 13:15–14:04 – Big losses: losing top techs, underpricing, misjudged hiring
• 15:37–18:33 – Delayed reaction to soft revenue and bloated overhead
• 19:07 – Hire fast, fire fast—you don’t know until they’re in the job
• 24:16 – Data clarity changed everything in decision-making
• 26:11 – AI/search hype fizzled—just not relevant in 2025
• 26:52–28:02 – M&A: Failed attempts, overpriced market in Nashville
• 31:34 – Stop premature resourcing—don’t spend before revenue
• 34:48 – “Always be recruiting”—Jack’s rule for 2026
• 35:30 – “Lean and lethal”—John’s rule for 2026; avoid process becoming a bottleneck
• 44:27–46:05 – All roads lead back to gross margin focus
• 48:28 – “Our real revenue now is gross profit”

Takeaways for Listeners

• Recruitment is year-round, not seasonal, and absolutely critical.
• Financial transparency and clarity—especially at the gross margin level—empowers your entire organization.
• Leadership development and company culture are compounding assets.
• Stay nimble with overhead; fixed costs can cripple you if the market shifts.
• Let data drive both strategic and tactical decisions, not vibes or hunches.
• Don’t let technical or tech trends distract; focus on what directly affects your business.
• Big growth rarely comes easy—maintain discipline, do the basics well, and be transparent with your team.

Looking Ahead

• Always be recruiting and never rest on your laurels with team building.
• Lean and lethal: minimize bureaucracy, keep the business agile for whatever 2026 brings.
• Move from ambiguity to granular clarity in financials, and let numbers—not gut—drive both day-to-day actions and long-term strategies.
• Gross margin is the true revenue; OPEX should be a percentage of actual gross profit, not just top-line sales.

This episode is a masterclass for any home service business owner wanting an unvarnished, practical look at what it takes to thrive—by the numbers and from the heart.