JD Beck·June 17, 2024

3x Revenue Despite Turnover, Hangovers & Threats | JD Beck Interview

JD Beck is a former U.S. Army officer and 8-year commercial elevator industry veteran (TK Elevator) who left corporate life to buy Mountain Valley Plumbing, a small pen-and-paper plumbing shop in Estes Park, Colorado in 2022. He paid $800k total ($350k business assets + $450k real estate) via an SBA loan with 25-year amortization, buying at roughly 2.5x SDE off a trailing average of ~$135k. In two years JD tripled organic revenue to $3.7M at the original business by raising average ticket from $330 to $1,200 (flat-rate pricing, ServiceTitan dispatch, tech-enabled sales), relocating operations to Loveland for better talent access, and building a premium customer experience culture. He also executed two bolt-on acquisitions — a one-man Severance shop for $90k seller-financed and JD's Plumbing (also ~$1M revenue, ~30% net margins) via SBA — bringing projected combined revenue to ~$5.5M. The journey was marked by extraordinary labor turbulence: nearly the entire original team quit when JD overhauled the business model, and subsequent hires included workers with substance abuse issues, theft, and physical threats. Despite the chaos, JD counts ETA as the best financial and lifestyle decision of his career, crediting low debt service (25-year amortization), motivated seller pricing, a captive repeat customer base (300 house keys in a gun safe), and his willingness to compete on quality rather than price.

Deal facts

purchase price: $800k total ($350k business assets + $450k real estate)
multiple: ~2.5x SDE
sde ebitda: ~$135k SDE (3-year trailing average); $75k SDE in 2021
revenue: $1.2M (2021, at acquisition); $3.7M organic (2023); ~$5.5M combined projected 2024
financing structure: SBA loan with 25-year amortization (real estate component); also acquired one-man shop for $90k seller-financed; third acquisition (JD's Plumbing, ~$1M revenue) via SBA loan
notes: Three acquisitions total under Mountain Valley umbrella: (1) Mountain Valley Plumbing in Estes Park, CO at $800k total; (2) one-man Plumbing outfit in Severance, CO for $90k seller-financed (name and Google profile only, no employees); (3) JD's Plumbing (~$1M–$1.3M revenue, ~30% net margins, SBA loan, higher multiple than original deal). JD stated debt service on original deal was only $3,000–$4,000/month due to 25-year amortization at low rates. Average ticket grew from $330 to $1,200.

Why this business

JD had read the HBR guide to buying a small business and was convinced that ETA was the best path to building real wealth without leaving Colorado. He wanted a business where the owner was not the linchpin, had repeat customers, and had a motivated seller. The Estes Park plumbing company clicked because the owner was elderly and disengaged, employees already knew about the sale, a licensed plumber was already on staff (solving the licensure problem), and the seller indicated he would close the doors if it didn't sell — signaling a motivated seller with a reasonable price. JD also saw the very low average ticket ($330) as pure opportunity to raise prices rather than a red flag.

What's working

Raised average ticket from $330 to $1,200 by implementing flat-rate pricing via The New Flat Rate platform and giving technicians tablets with a price book
Moved operations from Estes Park (6,000 homes, isolated) to Loveland (60,000 people per zip code) to access more customers and attract more technicians
Implemented ServiceTitan dispatching software, replacing pen-and-paper scheduling that could only handle one furnace per week
Built a culture and pay structure (commission-based incentives) that attracts skilled technicians; technicians now earn six figures and the company has a 4.9 Google rating (up from 4.4)
Same-day furnace installation from consignment inventory, versus previously being six weeks out — dramatically improving cash conversion cycle
Roll-up strategy: two add-on acquisitions gave jump-start customer leads and revenue in new territories, and third deal was approved by bank in two hours based on proven track record
Premium positioning: competing on speed, professionalism, and customer experience rather than price, in a market where customers will pay for quality

What's hard

Massive employee turnover: all but 2 of 7 original employees quit when JD rolled out new systems, software, flat-rate pricing, and expanded to Loveland — a complete operational overhaul all at once
Hiring in Estes Park was nearly impossible; listing job ads with the Estes Park address yielded no applicants, while listing Loveland brought floods of applicants
Made a series of very bad hires during the rebuild phase — including a technician who stole company credit cards (~$1,000–$2,000), threatened JD physically, and allegedly had gang affiliations; another hire was using methamphetamine
Labor challenges were compounded by substance abuse issues among technicians in Estes Park ('there's a lot of people who have some substance abuse problems up in Estes Park')
Q1 cash flow challenges are recurring; had to put money back into the business in Q1
JD acknowledges he was too slow to fire underperforming or problematic employees, especially in the early months when he was desperate for labor
The 90-minute commute from Denver to Estes Park was a persistent lifestyle challenge
Health sacrifices: reduced Brazilian jiu-jitsu from 3-4x/week to near zero for over a year; gym attendance dramatically cut

Notable quotes

I only had one moment where I kind of said screw it in the first two years I remember driving home one night it was like seven or 8 o'clock at night and I call my wife and I'm like babe if you're done with this I'm done with it and uh Mrs Beck to her great credit she said no I think you're enjoying it I think you're having fun you had a bad day and that's the only time I've ever thought about quitting.

It took me seven years to only get to two-thirds of the amount of cash I have on hand and I picked that up in six months of like running this business.

What I tell my guys is hey I want your average ticket to be 1,200 bucks but I want you to give that customer $2,400 of value.

I would say if you find the perfect deal it's probably not the greatest deal. You're looking for a motivated seller, a guy with a reasonable expectation of price, and a business that is not super relying on the owner and that has a whole bunch of repeat customers.