Marketing • Productivity • Management • Operations • Business Tips • 63 minutes

John Wilson’s Acquisition Strategy for Rapid Growth

May 31, 2021

Episode Overview

“Learn from it and keep moving.”

John Wilson

In his early 20s, John Wilson says he knew he wanted to model his professional life after iconic investor Warren Buffet. Wilson is CEO of Wilson Plumbing & Heating in Ohio and also owns The Wilson Companies, a private investment company that pursues acquisitions in the trades.

Wilson candidly discusses how he’s learned from his mistakes, benefited from peer groups, and advised owners to identify their strengths and weaknesses and fill their role accordingly. 

Here are John Wilson’s insights on rapid expansion as a trades-based investor:

Masterminds can change everything.

Wilson readily admits that when he first undertook the process of acquiring companies it was a bit of a train wreck. Then he joined a masterminds peer group. 

“We were the smallest company there, and just tried to absorb everything we could,” he says. “The group got us on ServiceTitan in 2017. That got us on flat-rate pricing, gave us an idea of how to handle fleet, an idea of what culture should be like, and a success-driven culture. So, we got a real inside look at what a $5 million-$7 million company looked like when they operated.”

Surround yourself with entrepreneurs.

Every hire should raise the average IQ of your organization, Wilson says. That assures every hire will help you grow.

“I look for people who are humble, hungry, and smart,” Wilson says. “It can be someone who has worked inside a franchise or is a service manager of some type. Preferably not in the industry. I don't want someone HVAC- or plumbing-related. They should be involved in some type of entrepreneurial effort.”

Learn your role and fill it. 

Some people have vision, and some are best at daily operations, Wilson says. 

“My job is to strategize, allocate capital and build the business,” he says. “My job is not to run the business. It would be a train wreck if I did, because I’m not very good at operations. 

“You need people who are going to always be driving forward, and then you need the people that are actually going to execute what you're trying to do. Two very different people. That's never the same person.”

Defining the art of acquisitions: rolling up. 

Wilson first acquired his family’s business, then bought a second company (merger and acquisition) and two more companies as tuck-ins. 

“They’re all now under one umbrella, Wilson Plumbing & Heating,” he says. “That’s the platform company. Then the mergers and tuck-ins are rolled in. It’s frequently used by conventional private equity companies.” 

Your first acquisition will be a leap of faith. 

Wilson did seller outreach for his first acquisition by Googling local plumbing companies and then sending them letters. He sent out 50 queries, got five responses, and bought one company.

“You’ll learn from it and keep moving,” Wilson says. “At the time, I had no idea what I was doing, so I decided to double the size of the company.”

Create a 100-day plan for acquisitions. 

Wilson’s operations are now a bit more sophisticated than when he first plunged in. 

“We now have a 100-day plan for when we acquire a company,” he says. “We have a folder. We sit down on Day 1 with the company and have a tell-all, ask-me-anything meeting. 

“We go over their benefits and the handbook. We go over how the company runs, who the players are, and show the org chart. And, then there’s a very detailed list of what the next 100 days look like.”

Private equity is accelerating in the trades. 

Some private equity companies are looking for fast profit on a turnaround sale, but that’s not Wilson’s game plan. 

“Some in the private equity game will give you a good financial offer, but they’re going to wreck your culture,” he says. They’re going to own it for five years and flip it. I’m a different kind of buyer. I have a 20-year minimum timeline. 

“I’m a strategic buyer, and I want people to be taken care of.”

Sellers should plan their exit. 

Wilson says sellers should personalize what they want their exit to look like. 

“What they actually want the next three to five years of their life to look like should be the determining factor in how a transaction happens,” he says. “We’re actively in outreach with five sellers and will probably close on two of them within the next six months. They all have different profiles. Different ages. 

“Some want to continue. Some don’t. Everybody needs to figure out how much money they need. Seller psychology is huge.”

Recommended research and reading

Rich Dad Poor Dad by Robert Kiyosaki Buffett: The Making of an American Capitalist by Roger Lowenstein The Outsiders by William N. Thorndike The Millionaire Next Door by Thomas J. Stanley and William D. Danko

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