HVAC Full Blast

Welcome to HVAC Full Blast, where you get industry inputs for real results.

Today, we're diving into a topic that resonates with business owners and leaders at every stage, navigating business expansion, merging company cultures, and overcoming the chaos of growth. Let's get started.

Alright. Welcome back. It's Mary Carter and Steven Ross, just two people with four first names.

And today, we decided to wear matching outfits.

Hey. Stripes for the win.

Yeah. You know, sometimes you just gotta stay in your lane and have a little reminder of that. Right? And, and in order to stay in my lane today, I decided that, it'd be great to maybe learn from somebody else, and you were so kind enough to invite on a guest.

I am. I am. Yeah. I'd like to introduce Tim Mosley. Tim and I have known each other for quite some time, probably all the way back to two thousand eight or so. But we also spent the last seven years as business partners.

We sold that business at the end of twenty, twenty twenty four. And, so, Tim, I I think with there's some things that we'll learn from Tim. I mean, just to give you very a little quick background.

Tim was in the marines. He was a pilot.

He's got an undergrad engineering degree. He's got an MBA. He started his own company back in two thousand eight as a duct cleaning company. He added on heating and air. He added on plumbing. He added on electrical. He brought in me as a business partner.

And so there's a lot of different ways we could go, but, Tim has learned a lot of lessons over the last ten or fifteen years. I thought we could pick his brain a little bit.

Excellent. Welcome, Tim.

Oh, appreciate that. That's, you left that nothing out except pest control. I forgot about pest control.

Yeah. Yep. So Tim Tim now ends a pest control company. Wow.

Wow. Very, very interesting. I would definitely wanna dive into some of that, pilot life, but, that's so great. Nice to meet you, Tim. And now that you have, you know, really sold that first business, what what are you up to now, and and what's it like to be kinda out here in the wild?

Yeah. So I really appreciate you inviting me on with the show.

So, yeah, we sold the business in September of last year, and, it is fantastic.

Payroll went from ninety five thousand dollars a week to nothing.

And, I I've gotta be honest. It took about six months for, let's call it PTSD, but it's not really PTSD. Well, maybe it is. But for me to stop waking up at two o'clock in the morning sweating and worried, every now and then I that still happens, but I have to remind myself that it's not real. Go to sleep. Go back to sleep.

Yeah. Yeah. I mean, they they say you worry because you care. Right? But, yeah, I think we'll call that PTSD. Right?

Yeah. And it's real. It's it's really, really real. But, yeah. I've I've, you know, had to rethink my life.

I gotta tell you that, men in particular tend to define themselves by what they do. And, all of a sudden something I've done for sixteen years, I no longer did. So that that was that was tough. That was a tough part of it.

But, I I think I worked through that, and I've jumped into a bunch of other stuff. So I'm as busy I'm as busy as I've ever been.

So, life is good.

So in our partnership, I was kinda sales and marketing, and Tim was everything else.

I managed a couple of salespeople. Tim managed the other sixty five employees, and we called that a fifty fifty partnership. Yeah. But, but it it but Tim's like, the operations side, running a business, I mean, everything from, you know, payroll, as Tim mentioned, the accounting side of it to setting up, you know, making sure our management structure in place is correct.

So, Tim, you're now doing that full time. You're you're helping other companies evaluate their operation structure and putting together, hey. How are you gonna grow? What's your game plan?

What are your strategies moving forward? How do you restructure the company for that growth? Is that is that an accurate summary of kind of what you're doing in?

About halfway through that journey around two thousand sixteen, got introduced into a great system, and implemented it into the business. And it focuses on, on exactly what you just said, a lot of structure, processes, but people, issue solving, data, vision, all of that stuff. And that really helped me kind of bring all of that stuff that's going on in the business together. And when I say together, not just me in my head, but also the leadership team because that's the biggest limiting factor for a lot of companies when they first start.

They get to about four, five, six employees, and that's about as much as one person can responsibly manage.

When you get past that, they start losing control. Culture goes downhill.

People don't get paid right.

Disagreements, you don't have any way to resolve those. So you really have to have a way to create some systems in place and learn how to duplicate yourself and shed responsibilities.

And if you don't have a way to do that, it's chaos. And that's why most, at least in the, services businesses, they they don't get really off the ground. You can create a great job for yourself, and make really good money with four, five, six employees. But that that wasn't my goal is to create a job, is to create something of everlasting value that gave me options at the end of that road. And, we chose to take the sale option, but there were other options available.

So let's think through that for a second because, you know, we were talking in one of our earlier podcast episodes about just the overall heating and air economy. And so one of the things that happens is you have a bunch of companies kinda start up, and then bigger companies gobble them up. And then the employees at those companies sometimes spin off, and they go out, and they start a bunch of companies. And so we're in kind of one of those cycles right now where lots of people are starting their own heating and air companies, plumbing companies, electrical companies.

They're spinning off because the company that they work for got bought by somebody else, and they thought maybe now's a good time to go out on my own. So you gotta let's say you got a heating and air technician. He goes out on his own. He's the sole employee.

He's gotta do everything. He's gotta generate leads and and get business and go find it and, and do all the accounting and do all the work that it you know? And so you did that. That was I think that was two thousand eight.

You went out on your own. You started a business. You had to do everything.

And then at some point, you say, wait a minute. I gotta bring on my next employee. But when you bring that employee on, one hundred percent of that employee's income is income that you would have had if you hadn't brought on that employee. So that's a struggle for a lot of guys that start their own businesses, bringing on that first employee. How did you How did you pay them? I mean, think three think all the way back in two thousand eight, but how'd that go? Because you you did it successfully.

You make it sound like I'm, like, some sort of hero. But, I knew better than that. And, so my first business was actually a franchise.

And they really helped kinda get all these things organized in my mind, how to how to move forward. So I came in, you know, as a as a sole sole proprietor basically.

And, it took me about six months to hire two full time. And at that point, you know, every time we hired somebody at that level, you have to reorganize the whole business top to bottom. So you have to be comfortable with that and every time you hired somebody you had to shed off some of your roles so that, so so that I could focus more on the things that I love to do and that I'm great at.

And that's really the goal is always keep in mind everything you do, but differentiate between those things that you don't like to do and you're not good at, and those are the things you wanna get rid of. You wanna hire people that that do like to do those things because there are people out there that like to do payroll, And there are people out there that like to do the things that all the things in business that you don't like to do. So hire those those jobs into the business and allow you to focus on the things that you like doing and your good at. For me, that was business development, sales.

I never quite got rid of everything that I should have, but, I I recognize where my greatest benefit to the company as a whole would be, and that's what I designed the company around as best I could. Right?

I think what's really coming through for me about your story here is, you know, how process driven you are. Right? And and oftentimes, when we see employees from the military, right, really great processes kinda laid in there, and and can often be, you know, really great employees because they like the process. And so it's interesting to hear you go from, like, marines and then franchise, you know, you're kind of, like, inheriting their process. Right? And then you go to now sole proprietor, you know, really running your own ship here.

And, you mentioned, you know, the expansion of employees being one of the markers where you were bubbling over to, like, maybe I need to find more process.

Was there anything in particular or anything that happened, like a story that you were like, oh, no. Like, we're in over our heads. I I gotta find the tool here.

Every day.

Yeah. So because I started with the franchise, they came in with all those processes, and that was fantastic. I was able to learn from that and apply that to, the additional lines of work that we had at HVAC Plumbing Electrical, along with the process system that I implemented in twenty sixteen.

So the challenge is to get it out of your head and into other people's heads.

And I'll caution you the answer is not to document one hundred percent of every process you do because that makes a very cumbersome document seven hundred pages that no one's ever gonna read. Try to keep it very simple and high level and that way when it changes or you need to alter it you change vendors, you change payment processing, you change whatever. It's a it's a one line fix instead of seventeen lines that you have to dig in and spend forty five minutes dealing with. Mhmm. So yeah. So get, get together with your team, meet often, have effective meetings, right, that follow an agenda that you do the same thing every time.

Many people hate having meetings because they never know what to expect. They start late because people show up late, and they go long because you you over discuss problems.

So those little things that if you can put all that together will really help move the company forward. And if you if you don't master those skills, you're gonna get stuck. You're gonna hit a ceiling, and you're not gonna know why, and you're not gonna be able to punch through it.

Oh, I think we could do a whole episode on running good meetings.

That's Oh, yeah. Yeah. Sure.

Though true. And full disclosure, it took me a long time to buy into setting an agenda. I just I just fought it, and I thought, no. People like the free flow conversation.

And what I found yeah. What I found is that, actually, that drones on and on and on. And then I personally couldn't keep up with the deliverables and the takeaways from the meeting because a conversation might have, you know, branched into a hundred different ways, and I couldn't keep up. So the agenda actually became a way for me to hold myself accountable. So, I mean oh, man. Steven and I, he like to talk around here. We could probably do that for a long time.

Yeah. Yeah. Hey, Tim. When so you you you started out duct cleaning. You added heating and air, which is kind of natural fit.

But at some point, you said, hey. Let's expand into plumbing. Yeah. And and some companies don't expand well.

Like, I've I've seen a few heating and air companies. They add a plumbing department, they try to give it a go, and then a year or two down the road, it's like, that didn't work. And they have to kinda pull back and shut it down.

What are some of the struggles if you're if you're gonna go multi trade and and kinda add on another trade? What what what do you think causes some companies to struggle with that or not do well? What did you do well that kinda kept the plumbing going?

Okay. So, you know, first of all, plumbing is difficult. I'll just tell you that right now. But so is electrical and so is pest control. So, I can tell you what I did to to bring those different lines on, into the company.

Put a lot of effort and time into thinking through as much as I could. So, couple tools out there, SWOT analysis, most people know what that is, SWOT.

If you don't, Google it, strengths, weaknesses, opportunities, and threats. That's a really good brain teaser. It just kinda gets you thinking about different things. Think about it relevant to adding plumbing to the business, for example.

There's another tool out there, the seven Ps of marketing.

That is also one you need to search online.

But it's centered around marketing, but it touches in all aspects of the business. It also gets you thinking about a lot of different things.

Also really important, if you're not a subject matter expert, you find one somebody that is and make sure you get along with them. And I was lucky to have done that with plumbing and with electrical. Both of the guys that I brought in, were masters of their trades and, just good people and and easy to work with.

Nice. Nice.

So with the, we we we can also talk about acquisitions. So we we bought an electrical company. You remember this. We bought an electrical company in twenty nineteen that, I think at the time we had just started electrical in the business in, like, March of nineteen.

In October, we bought another company. We bought an electrical contractor. He was doing about eight hundred a year. And, so many things to think about with that.

And I still have the notes, but did the swap, did the seven p's, just random brainstorming, talked to different people, talked to my electrician who was on board. And, our my goal was the day of the acquisition, the day of the sale, you know, we walk in, we tell the employees, get a lot of eye rolls and all that kind of stuff. I still remember Marcus, rolling his eyes.

And, but, you know, we thought through all the way through getting the stickers ready for the trucks, so that we were down for a day next day we're operating and I think people appreciate that because it takes the mystery out of not sure it certainly helps you look a little more competent. You know they who knows you we don't know this guy we don't know his company and if you come in and you fumble it just it doesn't set it doesn't set a good stage. So, we went through a lot of effort to make sure that that first day went as well as it could.

And I would call that acquisition a success because the next year twenty twenty, so this is October of nineteen twenty twenty, we did a million dollars in that department and that was of course COVID hit us hard that year. And we were able to, I'm not gonna say grow, but it probably is in comparison growth, but we were able to maintain our levels, combination of the two companies put together in twenty twenty.

So it's I would call that a success.

How about how about, like, culture clash? So you you've got a company that's running pretty well. You go buy a company, and now all of a sudden, you gotta put them together. And Mary and I have spent some time just talking about culture and the importance of it and so on.

And what was the biggest challenge Yeah.

Blending two different cultures together?

Yeah. So we brought twelve, fourteen people on board that we didn't hire. And, some of them were really good people, and some of them were the kind of people you didn't really want working for you. Right?

At least I, you know, I didn't want them working for me. But nobody got fired the first day. It it tended to work itself out because if you're consistent with your core values, you're consistent with your message, eventually people will decide on their on their own. Do I wanna be here and participate or do I wanna leave?

So we did have some turnover. I think, when we sold the business, there was only two of those, dozen or so that were left in the business. But those two, number one was a top level electrical, technician, and the other one was my general manager. So that that was a great if if nothing else worked out, just, just finding John would have been worth that investment.

One of my favorite memories, Mary, is of Tim. We had a technician one of the requirements was technicians had to wash their vans. And we had a technician deciding he didn't wanna wash his van. What he was gonna do with his van is drive through a car wash. And so he drove his company van with a ladder rack on the top through a car wash and did about a hundred thousand dollars worth of damage.

And so one of my favorite memories of the team bringing that back up.

Yeah. So so, Tim, there's some joys of owning a business that sometimes you don't expect, like when one of your employees drives your van through a car wash and does a hundred thousand dollars worth of damage. What are some of the lessons what are some of the surprises you had as a business owner where you were like, oh my gosh. Like, I didn't know I was gonna be dealing with this?

And for those of you who are on our audio only experience, my face is gobsmacked.

So there.

There's all kinds.

That hundred thousand didn't include the damage to the van because I fixed that on my dime because I was trying not to do a claim. So thankfully, that claim didn't hit the insurance until the year before we sold.

And the, the auto insurance went from seventy thousand a year to a hundred and seventy thousand. And my agent was like, that's the best you're gonna get. Oh my god. Dang. So, yeah. That was fun dealing with that. But, I mean, if you're you're talking employee issues?

Well, just I mean, just surprises. I mean, I think I I know I had lots of surprises being a business owner for the first time. I didn't know if there's any that jumped out at you. Like, hey. I didn't realize we're gonna have to to deal with this.

Sales tax, sales and use tax. We got audited for that. I you know, I'm like, we're we're in a state where we don't pay sales tax for services.

So I didn't I didn't have a sales tax number with the state, but come to find out you're supposed to pay sales tax on everything you buy that is out of state. And I didn't even realize we bought that much stuff out of state.

But the South Carolina Department of Revenue felt like we did. And, they came in and audited us and their first number was like one hundred and ten thousand dollars That's how much you owe us. I was like, What?

And we eventually, after spending days, weeks, months, hours on a daily basis dealing with that, finding these receipts that were three and four years old, going back to vendors and getting receipts, proving that we did actually pay sales tax. It ended up being like twelve at the end of the day, but oh my god, that that was a nightmare. So my advice is understand the laws of your state and get a sales and use tax number and just file zero every month if it's zero. And if it's not zero, pay the hundred bucks, you know, instead of having to deal with that whole process.

Thankfully, we we didn't get audited and we're still in a window, but we didn't get audited for income tax, you know? So that would be a nightmare. Not because you're not trying to hide anything, but you have to prove everything. And it's just like, oh my God, that's a nightmare.

I've got a question about maybe business ownership and, you know, kind of along the the nightmares theme, but hopefully, maybe pull this into a different territory.

Are manufacturers evil? Do they just want to come and load your barns and leave you with a bunch of products and say goodbye, I hope you sell this one day?

Isn't this a train sponsored call? That's not been my experience. No.

That's not my experience.

So I would love to hear that.

The distributors that we work with generally were great and they got us, and we got them and they more times than not, gave us the benefit of the doubt. And they no. Lots of examples where the distributors really, you know, the people between the manufacturer and the and the dealer, really stood up for us. And that's something to look for when you when you look for a distributor.

Lowest price is great, but not if the service and isn't there and they don't back you when when trouble hits.

Yeah. That's good. And and that's that's a really good point because there is a layer in between. Right?

Most manufacturers some do, but most manufacturers don't really have that direct dealer model, because, honestly, you know, the distribution network of the United States and beyond is complicated, and we need those distributor partners. And they offer that layer of services and capabilities to pull in different kind of marketing opportunities or promotional opportunities and and training and incentives and whatnot. So, so we love all of that those things. But, but that distributor relationship becomes incredibly important, especially as you are partnering with a manufacturer.

Right. Yeah. How did you how did you you know, when you would vet distributors, how what were you looking for when they said they got us? Like, what did that look like?

Yeah. So sometimes it's hard to figure that out in the beginning. So you tend to go to the lowest price and then if they don't work out, you go to the next lowest price and so on and so forth. Eventually, you find somebody you like.

So that's tough. I mean, the TM's are in a very tough situation going in, especially those that aren't the least expensive in the market, don't carry the lowest quality products, to come in and prove themselves. That's that's tough. It's a, it's a tough place.

Trane has the advantage of having a fantastic relation or market presence and reputation.

So people get it when it's a little more expensive for a piece of a Trane equipment.

And it does sell. That name does sell product.

And that as a dealer that's what I was looking for. I was looking for, you know, something that people would instantly trust because they don't know me but they know Trane and they trust Trane. They'll eventually, once we develop our relationship, they'll eventually get to know me and trust me.

But having a name that people trust, coming in the door really helps as opposed to, like, I don't wanna throw anybody well, I can't throw brands on it. I can't say brands. Yeah.

Yeah.

But but having a band brand that people trust is, you know You know who I'm talking about.

That's great. That's really good. That's that's, that's a super interesting way to look at, you know, not so many different decisions that you've outlaid in, you know, what, couple couple of minutes here, twenty minutes or so.

It's it's a pretty complex web that you're weaving.

It is complex. Yeah. But, it was fun.

Here's a question, Tim. I mean, you know, kinda piggybacking on that idea that, hey. If you're buying brand equipment, it is gonna be more expensive. Yep. But we we made a conscious decision that that's the route we wanted to do to go.

But, also, the the counterbalance to that is, hey. What we're gonna get eventually graded on and what we were kinda keeping our eye on was our net profitability or EBITDA of the business. So on one hand, you go, hey. We're trying to drive a percentage here that we need that percentage of profitability to go up, but we're turning around and we're making the decision at the same time to buy brand name equipment.

How do how do you reconcile that? How do you say, alright. I need my profit margins to be as high as possible, and I'm gonna buy more expensive equipment.

Well, I think I think the marketplace, expects to pay more for brands that they know and trust. And if you're a dealer that is charging the same as, a brand that is lesser known or is known to be on the lower end of quality and, other things, then I think you you need to understand that you should be charging more. And and customers customers will pay it if you present it right. If you're not having success with that, take a look at yourself and make sure you're following good processes in the processes in the sales side of your business.

Yeah. It's it is one of the more interesting discussions as a sales trainer that I have with people is they're like, well, hey. You know, why why would I spend more on equipment? I wanna make more money.

And I'm always telling them, hey. The way you make more money is you sell more expensive equipment. I mean, that's the, you know, that's the the paradox there a little bit is it's maybe a little counterintuitive to go, hey. The way to make more money is to sell the more expensive equipment, the the brand.

So Ten percent margin. So ten percent on ten thousand is a lot less than ten percent on twenty.

Yeah.

For sure. For sure.

Looking back, I mean, hey. You you kinda made it to the end. You you did this for you you mentioned sixteen years.

What are some things you did real well? Were you like, hey. We didn't know how this turned out, but we we took a shot. We gambled. It was a little risky, but we did it.

So as a team, we were really good at solving issues.

And if you're going to move the company forward when an issue presents itself, you got to have some way to do that. Have some way to solve issues and make them go away forever. We were also very good at traction.

And when I say traction, I mean getting things done, accountability, discipline within the organization.

And that's setting appropriate goals.

Ninety day goals, twelve month, three year, ten year, point the point the entire company in the right direction and you start by setting those goals.

Having effective weekly meetings that start on time, same day, same agenda, start on time, end on time, That's super critical. It's super hard to do. But once you do it ten times, it's part of who you are, part of your culture. So, the biggest danger I think, with leadership is having a great idea which you know it's a great idea.

Everybody says it's a great idea. They all agree it's a great idea. You do it twice and then you stop enforcing it or you stop going. If you have a policy as an owner, you have to walk the walk.

You have to do what you say or your team will slowly, gradually stop doing it or all at once stop doing it and then you have to deal with that.

So, lots of lessons learned. So, we did pretty good at those things.

Not so great.

Let's see.

Probably with, like, data, you know, we I I didn't have a really good scorecard to use, a weekly scorecard.

I should have done it and I didn't I didn't.

We towards the end we started doing daily huddle calls which really helped and that kind of substituted for a scorecard in a lot of ways. But if I were starting off again, I would have an effective scorecard that had actionable items on it weekly. A lot too many times we try to run our businesses on P and L's and income statements that are six, to eight weeks old data. It's too late to fix it and change it. Have actionable items on that scorecard that if you get off, you'd fix it for the next week before it hurts your bottom and top lines on your p and l.

Mhmm. Be real specific. Like, what would be a problem where you would say, hey. We identified this on a daily huddle or through a scorecard, and then here's the action item that fixes that.

Give me let's do job costing on every job.

You know, fifty, sixty, seventy jobs a day, we would do job costing. The software would kick out a report. And if there was, below our target, we we're gonna talk about that one. And we're gonna dive into it and find out why it happened.

And if it was an issue, right, we're gonna solve it, and try not to let it come back. And a lot of times, it was just technician training, You know, so it helped the service manager know what to focus on next week in his training. So, yeah, this technician kinda screwed this up and that's okay. We just want everybody to learn from it.

I'm glad you said software because I'm always very interested in this.

Are are you kind of a two parter? Are you a technologically savvy person?

And when it comes to, you know, software in your business, were you resistant at all, or do you just embrace embrace and can't get enough? So You mentioned scorecards. It's it's kinda interesting to hear that you wish you had more scorecards, but do you like you know? Talk to me about that journey.

Yeah. So technologically, I'm a seven or an eight out of ten.

Okay.

Better than most, but not as good as a lot of guys. I can tell you though, if I need to learn it, I will learn it. So if it was a problem that I felt like was worth my attention, I would figure it out.

Google.

Google. Google.

But, yeah. So I ran the business with Outlook and QuickBooks, until two thousand fifteen. So Okay. There's, Outlook for scheduling jobs and, QuickBooks for the numbers, you know, for the accounting and finances.

Can I say what software we used after fifteen?

Yeah.

I just said QuickBooks, but everybody knows QuickBooks.

So we started using Yeah. Yeah.

We started using for the Titan in two thousand fifteen.

We were one of the first people to start using it. It was an effective tool in our business. But, no. I'm I'm I like software. I like the concept of AI. Not that we used it in the business enough, but, no. Anything that can enable people to do their jobs better or better yet reduce the number of people that need jobs within the company, I would consider it.

Yeah. It's definitely become, you know, a hot button for some who maybe are resistant to all of the changes that we see around capabilities with technology. And, and I'm not even talking about, like, fancy equipment. I'm talking about, like, you're saying business operating systems.

Like, how are you gonna be able to, you know, work those muscles faster so that you can get to changing the problems that you're talking about? And a lot of times, you'll see people recommending these these operating systems. And, you know, again, the resistance I find out there, I think it's warranted because sometimes it is complicated. And it's like you said, you might have to learn something.

But but have those people that know it.

Yeah. If you if you go to a software that you hate three years later and you have to change changing softwares is a nightmare. Just think about the, the tokens for, credit cards. If if you save credit cards in your software, you will not be able to migrate them.

Them. They say you will. Every one of them says you'll be able to do it. None of them will make it easy.

And by the time they they finally get around to it, you will have already migrated all your customers manually. So it can be a very painful decision, if you make the wrong decision. So, if I've always said that as a business owner, you have to know what you're good at and what you're not good at and you have to be honest with yourself. And if you're not good at that, you need to recognize that how important software and IT is in every business.

If you're not good at it, hire somebody that is good at it because you will get left behind. You will make mistakes and you will lose customers because your competitors are using.

Super valid. Yeah.

Well, that was good. I I appreciate you coming on, Tim. I we didn't give you any heads up on what the questions were gonna be. We just kinda launched to match it to see how you did. So, I appreciate it. Now you've got you've had incredible experience going from sole proprietor to managing seventy employees and three trades, and and now you're helping other people do the same. So thank you for being on today.

Yeah. And echoing that, like, I'm I'm, like, fired up to run a business. Like, I do I know you came in to say, you know, there were there were some hardships and dark days and, you know, life life's good now, but I don't know. You make you make it sound appealing.

Well, can I give out my contact information? If anybody I love talking on the phone about business, free advice, but I'm also not liable if you screwed up.

Yeah. We'll share it.

Put my name at gmail. That's it. My name at g mail.

We could definitely, share in the show show notes as well. Totally. That's a that's a huge offer. And, and you know what? It sounds like, there's a lot that you could learn from Tim. So if you wanna reach out to him, definitely do it.

Love sharing. Thank you.

Alright. Sounds good.

Well, thank you always for, your time for listening to us, and we will see you next time.

Alright.

When we do jazz dance. Dance.