85 | From Family to Fortune: How We Scaled Our HVAC Business to $9M – The Untold Journey with Aaron Ruddick

Welcome back to another episode of Freedom Blueprint podcast. And I am hanging out today with Aaron Ruddock. And we're going to talk a little bit about his journey in the HVAC and now garage space. Aaron, welcome, I know, busy guy, man. Owning two businesses as somebody who's done it for a lot of years. I know that it can be quite time consuming. So appreciate you making time for us.

Thanks, Justin. I'm glad to be here. We've been talking about doing this for quite a while.

You're very welcome. know, people ask me, I love the phrase, I hate to bother you when you're not at work. I'm like, I'm never not at work. Funny story, was driving, I was driving with one my son lost one day and I drive a lot with the radio off and no sound in the truck, just thinking. And he's like, do you always drive in silence? I'm like, it's never silent in my world. Cause my brain's always working on something.

What's that look like?

You're like, you're missing out all the conversations going on in my head. That's awesome. So I tell you, cause I'm very similar. Like I typically, when I'm driving, there's nothing playing and, my wife, Kristen and I had the kids out. went on a long RV trip. was like a six month RV trip. Gosh, it's probably been almost 10 years ago now. And, we didn't realize this until we got back from the trip. We never once turned the radio on.

I don't even know if it worked in the RV. I I guess it did. was a newer RV, but, but yeah. So I get silenced sometimes as gold and owning a business when you have a lot of employees, there, there seems to always be a lot of coming at you. Yeah. Well, awesome. So let's talk a little bit about your journey and we'll get in the, into the garage door or the garage space, not garage door, but garage space in a moment. But,

Yeah, yeah, there's always something.

You yeah, tell us about your HVAC company. It's reliable comfort right out of South Indy. And so tell us a little bit how you even got started in the HVAC space.

getting my first 40 hour paycheck, looking at my paycheck and going, well crap, I got a problem. I can drink more than that. And I did some soul searching and figured I didn't have a drinking problem. I had an income problem. So I started looking at what I wanted to do and came across an ad for heating air conditioning at ITT Tech in Indianapolis. And mom agreed to pay for trade school.

So I joined the, went to a trade school, a one year trade school and jumped into this industry and found an industry I fell in love with. I was fired from my first two jobs and finally found a home with a long time family owned company that really treated me well. And so that's, that's kind of how I got into it 35 years ago. And it is, it is literally in my DNA.

I love it. I recruited my two brothers into it. My four girls worked for me at the company. One of them works at a graduate company now, but all my girls worked for me. My son always worked for me. It is truly a family affair.

And that can be a challenge.

Could be a big challenge.

Yeah. you know, obviously Chris and I wrote a book about being married to your business partner and, we've always talked about that has a certain, obviously a certain set of challenges, but family in general, friend, like all those things have just such a crazy, crazy challenges that come with it. So how did you guys, how'd you guys stay balanced on that? Like her Thanksgiving's just wild.

Yeah.

You know, our mom, we employed our dad. did like every, what every family business does. I did, we did fire our mother. I told her, you know, I gave her promotion going back to be just mom, because she had to go. And that's a unique challenge. over the time I made my dad retire, I said, it's time for you to retire.

That's a unique challenge for sure.

And he was heartbroken, but then six months later, he's like, that's the best thing I ever did. So I made him do that. And we have a saying around here, your name gets you a seat at the table, your performance keeps you employed.

Dude, what a great motto. I think that's the, I think that's the probably the missing link that a lot of businesses, family run businesses have is that, you know, they, they feel like their name automatically keeps them at the table. So good for you guys for having that clarity and having the leadership abilities and skills to say, this is not the right either seat on the bus or the right bus for you at all. We're going to stop and let you off on retirement lane.

Yeah.

It is.

Yeah, it is. And it's hard.

We've had to have some hard conversations and we We send a lot of grace to to all of our employees, including our kids. And we won't we won't do for ours what we wouldn't do for everybody else. We don't believe in this nepotism. I mean, you're you're we've all seen it in this industry is, you're the golden child. And I would venture to say we're harder on our kids.

Sure.

than we are everybody else. We expect more out of them. And they've always stepped up to the plate and done well. So we have, out of the 37 people we have, nine of us are direct family. Either blood or cousins and nephews. And it creates its own challenges. But it creates a lot of fun. I love the fact that I get to see these guys on regular basis. But we expect them to play.

OK.

We don't allow people to exist here because they're family.

Yeah, my son worked for me when he was in high school and we always had a role that he could work for any of the businesses. You know, we've owned quite a few businesses like you can work for the business at no point do you report directly to me. And it's because I am harder on that kid.

than I would be any other employee and which you know now he's in the Marines so I shaped him well

We do the same thing. Yeah,

we do the same thing. You your direct report is not your direct payment. Now, we've gotten to the point now there's a couple of nuances, but it's typically, it's at a higher level than we've grown to understand how that will work.

Okay.

I hate contracting, I hate people, I want out. So much so I've got a number. I'll sell you my part of the business for this. To which I'm like, okay, I'll buy it for that. It's less than what I really feel it's worth. Even though we're losing money, I know that the thing has value. And so we bought it. And I told my brother Andy this day, so I'm the oldest, Andy's the middle, Adam's the youngest, Adam left. And I told Andy, said, I wanna do something different.

Right.

So I'd been to a couple of Service Nation Alliance events, some of the success days, and we had had a couple of different coaches, but none of ever really drove

It is definitely a different game.

Yep

I'm having to learn how to operate a company that I don't know the kids names of everybody that works for anymore because there's almost 35 people and I don't interact with everybody. So it's, it's now having to lead leaders and have leaders lead managers. And it takes a lot of different talent.

so we're close to 9 million now and you know, it is a, you know,

I'm involved in almost zero day-to-day decisions. I'm working on what's next, how do we improve this, what's that number look like, why does that number look like what it is? And I lead my leadership team that actually runs the business.

I mean, that's, that's the strategic side of it. I mean, that's the, I think that's the thing that's missing in a lot of businesses is having, having someone focused on the strategic. What are we doing with the business today to drive it forward tomorrow? What are we doing to grow? And to your point about the law of the lib, it is so, so true. And it's not just, owners and GMs, it's even service managers. Like you see, you know, departments as they grow. And if they grow from 1 million to 2 million to 4 million to 6 million.

A lot of times that is just, it's just a different leadership skills. It is not the same. And I think, I think a lot of times people's egos get in the way of not like of blocking them on what the difference is between the two. So let me ask you this.

in

The joke

around here is I'm just a pretty face. I'm the pretty face, the one that just, I technically don't do anything, but I'm the pretty face that strategically drives us forward.

Well, and the truth is, is the people in the day to day and especially techs, they don't know what strategic is. And they're not supposed to. mean, right where they are in their career, if they advance and they do other things, then obviously hopefully they will learn that. what do you feel like, so from a leadership standpoint, from that 3 million to the 7 million now, what is something that you've kind of learned throughout that journey that you're like, man, I really wish I would have

They don't. Yeah.

either known that back then or implemented that back then from where you are now.

Yeah.

and the trucks and all the structure. But we didn't know how to go do it. So it just sat there as an idea. And we talked about how do we streamline the customer process and numbers and.

but I didn't connect with the people to help me make it better. We were just day in and day out, doing the grind, beating our heads against the wall. Jim Collins in the book, to Great. The problem was we had it good. We had a good company and we made good money and we did good jobs and we had a good time, but we weren't great. We were better than average back then. I would say we were.

Mm-hmm.

We were better than average back then. I would say we

were probably high single digit net profit. And we thought we were good at that.

probably high single digit net profit. And I mean, we thought we were doing fantastic.

know, until I joined Service Nation and I heard this crazy thing that John LaPlante talked about called breakeven. And I'm like, what do you mean breakeven? We lose money half the months of the year. It's just how we operate. And I remember coming out of bootcamp, my brother was with me and I told him.

you know, we no more months under $200,000 because our breakeven was 195. So never again. He's like, how are going to do that? I was like, I have no idea. But we're going. Yeah. Yeah. So I started spending time with people going, okay, that's interesting. Tell me more. How do you do that? Why do you do that? And so we changed manufacturers. We went from a big OEM to a less known brand.

That's not important. We know the what, we know what we gotta do, we'll figure out the how.

because believe it or not, brand really doesn't matter.

I'm with you, man. I have a lot of conversation with, uh, HVAC contractors that, that disagree with me on it, but I I'm with you. I don't think that the name on the box for, I'm going to say 95 % of customers, the name on the box does not matter. Now there are customers that are like, I got to have this brand because I saw this commercial or I used to have one and it worked great. But man, that is a very, very small percentage. They're buying you, they're buying your company, they're buying your reputation, not the name on the

side of the box.

No. And so I learned

from asking people and joining best practice group was again, the number one thing I would do is get it connected with people that helped me get better. And I just, learned how to go from single digits to low double digits to, know, I've my sweet spot is about 15 % net. That's, that's what I shoot for. And there's guys out there that are worth a 20 high five kudos. Congratulations. You're amazing.

Mm-hmm.

But I found

a really comfort spot in that 14, 16 % net range. And I mean, you can have a great company that serves you well. And you can give to your people, you can serve your community in that range. that's kind of where I have leveled in at. And I'm comfortable.

Well, and good, good for you for having that clarity, right? Like, okay, so here's what, yes, I know other people are doing this, but there's also other things behind the scenes that really you don't know about. But I think that's a, that's a good point. You guys are like, here's my sweet spot. Here's what I like. I'm going to, I'm going to keep it in this, in this zone. Good for you. And you know, what's amazing to me is I think that it is such a bad move. think every contractor should be part of the best practice group and

it.

You

and I are both part of service nation. Those guys are top notch. We've been a part of them for a very long time, as well as you and a lot of our other friends. There's great networking. There's great community. Um, and then having some accountability from coaches or whatever that looks like is, think it's really crucial to the business. And I mean, you look at any professional athlete, guess what? They got coaches. They typically have multiple coaches. There's a reason for that.

Did you?

There's a reason that Tiger Woods still has a coach. say that I don't even know if Tiger Woods still golfing. So I may, that may not be a good example, but Rory McElroy, right? He still has a coach. He just won the masters. He didn't win the masters and go, I'm done. I don't need, I don't need a putting coach. I don't need to drive and coach. I don't need any of that. I don't need a strength and fitness coach. I don't need it. I don't need any of that.

He does.

He definitely is a putty coach after what he done on 18.

Yes.

Thought he was gonna duff that one. like, my gosh, that's so terrible.

Oh man.

Yeah, we were sitting there B-Dub's watching that and that place just erupted when he missed that. It was crazy.

I'm a, I'm not a very good golfer. enjoy golfing, but I don't play it enough to get too serious about it. But I can't imagine the pressure of trying to make a putt. Like for me, my personality, I would be more like the Phoenix open, you know, the whole, I think it's like hole 16 where they're like throwing beers and screaming and yelling. That would be, that's more my style. Like I need everybody to act a fool that, that really quiet.

I'm in my own head. I don't need that. I need the loud. Like bring it.

Bring on the action. Very cool. So, so sold the business. You're still operating it as the GM. And now you've got into a new venture.

of Kyko Garage and Solar Solutions. So, a lot of people, not solar.

No solar,

no solar. No, Kyko Garage Solutions. Yeah, we do doors, floors, and more is the tagline. Yeah, so my brother had a friend that owned a garage door company and it owned it for 30 years. And we're sitting here one day talking and he camps with this guy on a regular basis. So they set him on a campfire.

I literally, solutions.

And he was bemoaning business and he was a small guy doing about a million dollars out of his garage at his house on his farm. And he was just bemoaning about business. And Andy was telling me about this. I'm like, why don't we buy it? He's like, you want to buy it? I'm like, why not? It's home service business. It's what we do with garage doors. It's service, it's replacement, it's upgrades. You know, why don't we do it? And so he talked to him and I sat down and talked to the guy and

He's like, why do you want to get in the garage door? I was like, I'm just interested to see how I can help. And his exact words were, I love garage doors and garage door people. I hate business. I'm like, then you're not going to be best friends. I love business, sales, structure, leadership, and I don't want to touch a garage door. You don't want me putting in garage doors. And so we made a deal. I wanted to buy part of it, leave a part of it.

Yep.

He wanted to sell 100 % of it. So he has a three year agreement to stay on with us. But I mean, his exact words is, you treat me so great, I will sell garage doors forever. So I turned him loose to do what is in his strength zone to nurture and sell and find garage door work. And I've got an operator there. I spend about eight hours a week on the company. I'm there, I do the...

So I turned him loose to do what is his strength. To nurture and sell and find garage door work. And I got an operator there. I spend about eight hours a week on the company. I'm there, do the

Kind of the sales leadership, financials, and I've got a whole operations team. I've got the garage team. So we took a company that was Kyko garage doors.

sales leadership, financials, and I've got a whole operations team, I've got garage team. So we took a company that was Tyco Garage Doors.

And then I went and completely rebranded it to, I put a little mascot monster on her. Kyko is actually the name of the monster. That is his name. And Kyko came from his two kids, Kylan and Colton. That's how I came up with Kyko. He wanted me to keep the name and I had to figure out what am I going to do with this dumb name.

And then I went and took a little eerie break to put a little mascot monster on her. Kyko is actually the name of the monster that is in there. Kyko came from his two kids, Kylan and Colton. That's how I came up with Kyko. He wanted me to keep the name and I had to figure out what we're gonna do with his dumb

name. So there you have it.

because it really doesn't make

sense. So I had to make it make sense. So we made it a little monster and it's orange and purple and green. Somebody told me the other day it looks like Nickelodeon. I looked at him like, it kind of does, but it's kind of fun. And so then we added garage floor refinishing. We grind and polysparic finish garage floors. And then we added lifetime warranty high-end garage cabinets. So we do garage doors, we do floors, we do cabinets.

So I had to make it make sense. So we made a little monster and it's orange and purple and green. Someone told me the other day it looks like Nickelodeon. And I looked at him like, kind of does. But it's kind of fun. And so then we added garage floor refinishing. We dried and polished and finished garage floors. And then we added lifetime warranty high-end garage cabinets. So we did garage floors. did

We're going to eventually get into lighting and other stuff. At some point, my goal is to go devote full time to that. At some point, I will exit reliable comfort and go play in the garage remodel world. I tell people I want to build garage man caves because some of the transformations we make on these garages are amazing. We did a front porch yesterday.

We're going to eventually get into lighting and other stuff. At some point, my goal is to go to hook full time to that. At some point, I'll exit the live of comfort and go pan and drive three mile a row.

Yeah.

that they had old brown worn out carpet.

We tore the carpet off, we dried it and flaked it, and it is just amazing what we can do to these places.

It's pretty interesting to see how that space has grown. Garage door, just that extra space where, you know, and maybe that's part of it is, you know, as people tend to stay in homes longer, they're spending more money to upgrade. But I think that's pretty neat. I know I've got flooring on my garage. I love it. Because then when I'm working on something there and it's built, it's not a big deal.

No, is truly me. It's durable, lifetime warranty on the stuff. And I into it, I said, okay, I want to do this. And what I found was all these franchises wanted me to buy their franchise. And I'm like, I don't want a franchise. And so I had to look long and hard to find a wholesaler that had the dealer model. Because again, I don't want to build a franchise for a franchise.

Yeah.

and buy into their programs and their minimum purchases. That's not win-win. So I found a great distributor in Wisconsin that does the training. They sold us our first trailer set up and we went up there for training. They came down here for training. Same thing with the garage cabinets. I found a great distributor model that wants partners to,

Right.

they manufacture and we we wrapped their stuff.

So it's been, it's been a really good transformation. The biggest challenge with that is I went there for companies that operated like typical contractor finances, financials, you know, give everything to the accountant at end of the year and say, make me pay as little taxes as possible. Yeah.

Here's my shoe box. Yeah, here's my shoe box.

And so I had to go in there and departmentalize and monthly financials and budgets and forecasts and KPIs and

You know, doors should be this margin, know, labor's here. I just, it is a, you know, the funny comment was made by the bill, the guy that used to own it. It's like, we never lose money. I was like, how do you know? You have no idea if you did. Yeah. No, you have no idea. Yes, you had money in the check you can. But it's been, it's been a great, we, we took it and we moved it out of his property. We bought a building for it. We put them in a building.

Kristen would be so proud to hear that.

Bill.

I can't even feel it.

and got the branding, wrapped all the trucks. And I'll you, one of the first things I did is I found my marketing company, my rebranding company, and we happened to use Lemon Seed. Fantastic organization. They did so good with it. And yeah, we just, was my, that was one of the first people I went to and said, I'm going to buy this. I want you to do it. And now went to online access and talked to, talked to them about doing my website.

Yeah, Crystal's been on the podcast a couple times.

and started to do that stuff. And all that comes from the network that I've built over the last six years through Service Nation. I mean, that's another thing about the best practice groups and building that network of connections is you know who you can trust. Hey, when I'm going to do this, I know who I'm calling. And yeah.

And in the...

Mm-hmm.

Right and get a real answer.

And they can tell you there's some things I wanted to do. And they told me, don't do that. Here's why. Here's why you don't want to do that. And it was a great journey. So bought it, rebranded it. They were doing about $1 million. We're getting ready to close our first full year in two weeks. And we're going to do about $1.7 million the first year. So pretty good growth. Adding the other products. Not super profitable.

Nice, very cool. Pretty good growth might

be an understatement.

Yeah, that's nice. Not super profitable because it's expensive to grow. It's expensive to rebrand. Yeah.

Right, well and you're basically starting a new business. So branding, building,

hiring, training, like it, yeah.

Yeah, but it's designed to go from, know, we'll end the first year, you know, actually the first year, first fiscal year was a loss. But this year we'll wind up in that, you know, the goal is right at 10%, but I'm going to build it right at that 15 % net and just build it and, you know, let it do its thing. And the one thing I'm doing there quicker than I ever did here, systems and processes.

Yep.

You know, how does that door, how do we order that door? How did it come in? How does it go out? How do we jump cost? How do we control material? How do we control labor? I said through a breakout one time with a guy that said the two things you have to control the most is material labor. That guy was brilliant by the

Yep.

Yeah.

By the way, that was you in charge.

I mean, it's true. mean, labor material, the two things that'll just smash your business faster than anything else. it's, and honestly, a lot of times it's two of the fat, like two of the easiest things to keep a regular handle on, which is, know, but you gotta watch it every day. You can't watch it every month. You can't watch it every quarter. can't damn sure. You can't watch every year. It's gotta be every day. Well, cool, Aaron, that is such a good story. I know you got a ton of stuff to do.

It is.

You did?

As we wrap up any kind of closing thoughts you've got for the audience.

Yeah, the number one thing, the thing that's really helped me the most over the last five years is I became a student of leadership. I went and actually went became a John Maxwell certified speaker trainer coach. Just because I want the content helps me develop myself. You know, never underestimate the amount of stuff that you can learn from.

Mm-hmm

Podcast from audiobooks. I mean, I go, I listen to, think, three or four different podcasts on a regular basis and audiobooks. I try to do a couple audiobooks a month. Best audiobook you can listen to is a book called Rhinostris Success. It is an hour and a half. I recommend the audiobook way better than the physical book because the guy that reads it, right.

I have not read that.

Well, good, because I wouldn't read the physical book.

I am an audible guy.

The guy that does

the audio book has tons of energy. It's about being a rhinoceros and taking the world by storm and just going out and making stuff happen.

What is

it? We say that name of the book again.

which got rhinoceros success.

I was struggling because apparently I can't spell rhinoceros. Rhino success is what I got.

No, I couldn't either. Don't ask me how to spell it. Yeah. Yeah. But it's a, it is a fantastic

little short hour and a half book that you can, I love it so much. I listened to it once a month for a year. I mean, the first day of the month, I turned it on. listened to it every single month because it just kind of keeps me focused. And so that's a big thing is, you know, number one, always be learning.

Very cool.

and always be feeding your mind with good stuff. And secondly, when life gets hard, when business gets hard, have your key people you can call to say, man, I'm having a bad time right now. I need it, you know, we call it therapy with, you know, the buddies I call is like, hey, I need some therapy, let's talk. And whether it's virtual, whether it's, you know, online, whether it's just a phone call.

is have those key people in your corner that don't, that can lift you up when you get down. One of the great things about me and my brothers is there was three of us that started this. I couldn't imagine doing this by yourself because I always had those two that when one of us is down, those, you go pick them up. And none of the, three of us never got down at the same time. And so how do you have in your corner that's going to pick you up and help you along the journey? Because we do.

Mm-hmm Yeah

Because you

You never want to go through this alone. So that's the biggest thing. That's the biggest thing that's helped me is, you know, connected with the best practice group, go to conferences. And even if you

never want to go through this alone. So that's the biggest thing. That's the biggest thing about me is connected with the best practice group, go to conferences. And even if you...

don't walk away from there with a ton of new things you learned, seeing the people and talking to the people and building the relationships is so valuable. That it is a big

It's a big help in business. So that's all I got.

Network is

equal to your net worth. So good message, Aaron. I appreciate it. That's all great information. Thank you so much for sharing and appreciate you coming on, man. And let's catch back up.

You okay?

and keep us posted on the adventures of the garage door business. And I want to hear about the growth and let's be honest, there's always challenges. We want to hear about all of that, the challenges and the success as well. So Aaron, thank you so much for coming on, man.

You're welcome, Justin. Take care.