America's new millionaire class: Plumbers and HVAC entrepreneurs

This article and a lot of the discussion fails to make clear that there is a big difference financially between being a plumber/electrician/hvac tech and owning a plumbing/electrical/hvac business

The whole article is about trades business owners selling for seven figures. When employees are discussed it’s to say they see a 20% pay bump after acquisition but that some owners worry about the fate of the workers post sale. What makes it seem to be conflating owners and non-owners to you?

The article seems pretty clear; it talks mainly about the two business owners, one is Aaron Rice and the other is Dana Spears, as well as the relationship with private equity over time.

Seems like every article that sings the financial praises of blue collar "tradesman" work fails to make this distinction. You don't become a millionaire being a plumber. You become a millionaire by owning a plumbing business. Those are two totally different things.

> a big difference financially between being a plumber/electrician/hvac tech and owning a plumbing/electrical/hvac business

It seems to cost about $10 to 50k to acquire the tools, vehicle and licenses to start a plumbing business. Is there something else that’s substantial beyond the normal attention to detail and savvy that every small businessperson must have?

It’s a grind to run this kind of business. You’re sometimes dealing with life and death situations (you’re liable for someone’s electricity or heating 24/7). Talent is really hard to come by at a reasonable rate, especially reliable master electricians or plumbers and the trades people that work under them. And then it’s an extremely cost and labor intensive business involving large machinery, equipment, and vehicles - inside people’s homes. (Watched my dad scale one of these businesses for 30+ years, his work was stressful and unending)

Well for one when someone’s AC is out during the summer, heat is out during the winter, their water doesn’t work, or worse yet is flooding, then that person has a pretty poor negotiating position. Plumbers and HVAC can basically name their price for emergency work.

And the licensing system ensures that everyone has slaved away so long to get into the "I can make the big bucks now" club that they won't compete on price once they're there.

A similar problem with "farmers." A farm worker, and a person who owns a farm, are two totally different economic situations. Both work hard, but the economic outcomes are quite different.

lol. 24/7 heat and electricity are not life and death situations. There are billions of people who live without either everyday

In North American winter temperatures?

you’re not wrong. But on the other hand, there are events like this. https://www.npr.org/2022/01/03/1069974416/texas-winter-storm...

So at least sometimes, it is life or death.

One thing I've always been curious about is: How many trade business owners come from the working class and actually started out as grunt-work tradesmen, somehow ending up owning their company, and how many are from the business class and have never touched a pipe wrench or wire stripper? You never get the picture from these articles. My uninformed suspicion is that the majority of actual owners are not practitioners, and instead acquired or inherited their business. Would love to be proven wrong with data.

Inherited seems quite possible. Historically a lot of trades were family businesses. A son or daughter may have come up through working for the family shop.

A possible alternative path is to take over management of a business from its current owner, and eventually buy it out. Also, just a little bit of seed money might make the difference, e.g., buying a van full of basic tools is expensive, but it's not SpaceX expensive.

I've hired workmen who turned out to be "a couple guys with chainsaws and a pickup truck." So it might be possible to ease your way into a business by starting with smaller jobs.

For someone with an oxygen machine, yes it is. Many of those billions just don't have the option for this, they would end up committed to a hospital or dying because the treatment would never be seen as viable.

And now that I say it: hospitals need electricians too. Electricity goes out in a hospital for too long, lots of people die.

And actually a third point: electricity -going out- is not the only thing that could kill a client, it's not too hard to start a fire.

True, but in most cases, the owner started as a successful, lone plumber.