Why Profitable Home Service Companies Keep Running Out of Cash

John Wilson (0:00)

Why growing home service companies run out of cash?

Tyler Martin (0:03)

Cash planning, cash forecasting is what's kind of preventing them from getting them where they want to go.

John Wilson (0:07)

And I think that it's a problem that never goes away.

Tyler Martin (0:10)

I see some clients get into a never-ending thing where it gets really hard to get out if they don't pay attention to, like, don't take too much money out of the business. It's hard to catch up after a while.

John Wilson (0:19)

We were a $30 million business still struggling with, like, where's it going?

Tyler Martin (0:23)

Profit is opinion, cash is a fact. Profit's cool, but it doesn't necessarily mean cash. Cash doesn't lie.

John Wilson (0:29)

How much cash do you think a company should keep?

Tyler Martin (0:30)

The rule of thumb usually is.

John Wilson (0:39)

Welcome back to Owned and Operated, a top 150 business and entrepreneurship podcast. I'm your host, John Wilson. And on this show, we talk about the home service industry. We talk about my own home service business. And we talk about how to build inside home services, which is a lot of fun. Today, I have a returning guest.

Tyler, welcome back to the show.

Tyler Martin (1:00)

Hey, John, what's going on? Love hearing every time we talk, the numbers get bigger for Wilson Companies. It's a fun, fun journey for you, I'm sure.

John Wilson (1:08)

It is, it's pretty wild. Yeah, it's pretty wild.

Well, Tyler, Tyler Martin is from Profit & Grit, and it's CFO for the trades. I don't know when we had you on last.

Tyler Martin (1:22)

I think it's my first appearance. I was lucky enough you guys invited me on. I did in your private community.

John Wilson (1:28)

I went on your show. Yeah, yeah, yeah, yeah.

Tyler Martin (1:30)

Yeah, you went on my show, and you did an awesome show by the way.

And we talked about things. And this is before you blew up by the way with all the acquisitions. You, I think, tell me if my data's wrong. When we met, I think you had either done three acquisitions, they, you called them all turnarounds, and you'd kind of work through it, and you said, hey, maybe you become an expert at turnarounds. And although I didn't ask the questions, I really regret, I could ask so many good questions in hindsight, but I didn't ask, like, hey, are you planning on doing more acquisitions? And then you've blown up in acquisitions since we talked. So I'd like to think I played a small part in maybe poking you a little bit to start back up.

John Wilson (2:10)

Yeah, no, I think that's great. That is funny. We went through a couple of years where we didn't acquire anything.

Really 24 and 25, we acquired nothing, which that was the first year I haven't acquired a business in like seven or eight years. The reason was, which we've talked about on the show, the reason was we've been for a while, 2026 has been our North Star year of, hey, we're going to get to 2026 and we're going to go multi-state, and we're going to go multi-location. I've said that probably like a hundred times on the show. You can watch the evolution of that if you go back to 2024 I'm interviewing everyone I can on multi-state operations and multi-location operations and trying to unpack it and understand how do they do this? How do they think about GMs or like even like how do you, who gets credit for revenue? Like really just trying to understand what it's like to run three, five, 10, 20, 30 locations.

See over the past few years, we like to kind of took a break from acquisitions and then just spent that time building the framework that we felt like we could build on top of. Which like worked. I mean, it worked. You know, we will, by the end of this year, we will do seven or eight total acquisitions this year. And we would have gone from around 30 million to like, I don't actually know how much revenue will complete this year, but like run rating 90 is like sort of like where we're going to land. So it's a triple starting at 30, which is a hell of a thing. Yeah, it's pretty crazy.

Tyler Martin (3:55)

John, one of the things that stood out to me when we talked on my show, you had talked about one thing that got a little bit out of hand was the accounting as things were happening. Are you finding taking on this many companies? I mean, obviously you have the people are a big part of it.