A few weeks ago I visited a company that is 20 months old and running at a 10 million dollar annual pace. In plumbing.
The owner is no plumber. He was a software engineer, and his last business built software tools for the trades. Through that work he learned that half of all ongoing home maintenance calls are for plumbing or HVAC. He chose plumbing because he didn’t like the seasonality of HVAC, and because it was a huge, fragmented market that stays busy year-round. If he could get the model right, it was easy to see how it could scale.
But the numbers aren’t what stuck with me. The meeting was.
The Question From the Guy in the Truck
I got to sit in on their weekly team meeting. Almost everyone in the company was in the room, mostly plumbers, and one by one each of them reported their numbers. By numbers, I mean each plumber gave a forecast of the revenue he expected to end the month with.
When they finished, the finance lead walked the room through a projected profit and loss statement built from their own forecasts. As he explained how much of their cost goes to materials, one of the plumbers interrupted him.
When quoting a job, the plumber said, they can’t see the assumptions behind the quote. They put in the job code and it spits out a price, but it doesn’t tell them whether that job assumed a 200 dollar faucet or a 400 dollar one. That kicked off a discussion about getting plumbers access to that information so they could choose better job codes.
The whole thing started with a question from a guy in a uniform with his name on it, who was heading out in his truck to the next job after the meeting. Not a manager. And that’s when it hit me. This owner had learned something before he even started that took me 22 years in business to figure out.
The Les Schwab Playbook
A couple of years ago I listened to a podcast about Les Schwab, an entrepreneur who started a tire business in the Northwest and grew it into a multi-billion dollar company. From the beginning, Schwab built the business to align incentives with his team. With every store he opened, he shared 50 percent of that store’s profits with the local team running it.
The result was a team of people who genuinely cared about their store and the business as a whole. When they won, the business won, and the other way around.
That podcast inspired me. It turns out it didn’t just inspire me. The owner of this plumbing company had heard the same episode, and it sent him digging into books and podcasts on employee incentive alignment. That’s actually how we met. We both work with the same coach, trained in the Great Game of Business framework.
Like Schwab, this owner started his company with that aligned approach. And it’s working. On pace for more than 10 million dollars a year at 20 months old, and profitable shortly after his first year.
The Answer I Took 22 Years to Find
I’ve been a business owner for 25 years, and the hardest part of the job has been dealing with employees. For most of that time, I never understood why.
I thought ownership was a lonely journey you played by yourself or with a partner. A constant dance between getting the business to profitability and keeping your team happy, knowing they all want to make more money to take care of their families too. It took me forever to see the misalignment underneath that dance, and how much of my struggle over the years was rooted in it.
And here was a guy who did it right from the start. He gave his team a stake in the outcome, a reason to care, and the weekly context to act on it. I’ve seen what this approach can do inside a company that’s been around for two decades. What I hadn’t seen, until a few weeks ago, was what it looks like when you begin that way.
His business will ultimately end up much larger than mine. He started with the answer I took 22 years to find, pointed it at a bigger market, and had no old habits to unlearn.
Start Aligned
Most owners treat profit sharing and open-book management as risks, or as levers to consider later if growth stalls. Les Schwab started that way. This plumbing company started that way. And what I saw in that room wasn’t a lucky outcome. It was an aligned one.
If you’re willing to share both information and a stake in the outcome with your team from the beginning, you may be surprised by what it does. Not just to your growth, but to your experience of running the business. Instead of dancing between business success and employee expectations, you’ll be rowing toward profitability together.
If you’re in the early stages of thinking about starting or buying a business and this intrigued you, two resources worth your time: the Founders podcast episode on Les Schwab, and Bo Burlingham’s book A Stake in the Outcome.
Don’t quit your daydream.
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