Owned and Operated #172- From Dropout to CEO—Kelly Roberts on Building a $15M HVAC Business

In this episode CEO of Moss Heating and Cooling Kelly Roberts, shares her journey from college dropout to C-Suite member in a fast-growing HVAC company.

Kelly talks about the challenges of shifting to high-end residential new construction, navigating financial setbacks, and scaling from $7 million to $15 million in just one year.

This episode is packed with real-world insights on leadership and growth you won’t want to miss.

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Episode Hosts: 🎤
John Wilson: @WilsonCompanies on X
Jack Carr: @TheHVACJack on X

Episode Guest:
Kelly Roberts on Linked In

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Owned and Operated Episode #172 Transcript

Kelly Roberts: A CFO comes in and he basically says, Hey guys, love y'all, but I'm leaving. And I highly recommend that you file bankruptcy.

We were looking at going from 7 million to 15 million, which is what we did last year. You know, we're trying to do 2000 homes in new construction this year. I will be direct. I will tell you what you're doing wrong. And I will say it to you enough times until you hear me. Recently,

John Wilson: we've been experimenting with lead aggregators. And one of the ones I'm most excited about is a company called Mize. So what modernize does is they do direct inbound calls for home improvement. So it's a direct phone call. booking, which is way easier to book and has a much higher book rate than an ANG list or something like that, where you have to sort of recontact them and try to find that, that customer.

Modernize has a direct connection to our call center. So that's been a huge win. It also has some of the services that we've really struggled to get good leads for. Water heater replacements, HVAC units, and water damage restoration and water. Well, those ones have been challenging for us to get leads and modernize has been a really great partner for us.

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Jack Carr: Welcome back to owned and operated. We have our cohost here, John Wilson.

John Wilson: And, and we're blessed to have Kelly Roberts here with us today to Kelly. Thanks for joining the show.

Kelly Roberts: Thanks so much for inviting me on.

I'm a big fan of the show, so I'm excited to be here.

John Wilson: Yeah, this will be great. Well, I'm glad you've been able to learn from it, hopefully in the past from the smart people we've had on, and I know you're going to share a ton of awesome stuff too, so this is going to be fun. Kelly is the CEO of Moss Heating and Cooling and the CFO of Moss Utilities, and you did in fact hear that correctly.

I continue to recheck my notes. She's got a lot going on. Kelly, I would love it if you just give us a little bit, like, what does a day to day even look like, and we're going to break this down because I'm fascinated, but like, how do you do it?

Kelly Roberts: That's a great question. I think I take it day by day.

When. We originally started a lot of deep breathing. Uh, when we first started Moss Heating and Cooling, the idea was that I was always going to serve as CEO or general manager, be in some capacity. I was already the CFO of Moss Utilities at that time when we decided to partner with the owner of Moss Utilities to start Moss Heating and Cooling.

It took a while for the company to get. just quite honestly, large enough for it to take up my entire attention. And so that happened last year, we were looking at the year and we were thinking that we were about to double in size. So we were looking at going from 7 million to 15 million, which is what we did last year.

And about April of that year, we've been planning since about January. We decided to finally make the move for me to just move over to Moss heating, cooling full time CEO. And so in doing that, we hired a CFO for utilities and unfortunately it just didn't all work out. A couple of months after we hired him, we were good friends with him and we just decided that we would part ways, because it wasn't a good fit and we wanted to do it sooner rather than later.

Um, utilities at that time was considering, a very important transaction, employee ownership. And it was going to take somebody that really knew the business to be able to help orchestrate that deal. And so I came back, and we've just kind of taken it day by day. The idea is that, eventually one day I'm going to have to choose, because utilities is a massive company.

They do about 180 million of revenue a year. And so that is really a full time job. And then we have moss heating, cooling. It's really interesting, the differences between the two companies, but from a transaction standpoint, moss heating and cooling has just as many transactions as moss utilities.

It's just, you know, moss utilities transactions are so much larger. So one day I will have to pick a side. I just don't want to do it quite yet.

John Wilson: Can you explain, just walk me through, I don't understand 180 million in moss utilities. I just don't get it. So like, walk me through this.

Kelly Roberts: So, Moss Utilities started in 2016. We are a, civil contractor. So that's just a really nice way of saying that we put pipe in the ground. We put water, sewer, and storm pipe in the ground. Garrett Moss started the company out of his garage. His dad had been in the industry. He's actually fifth 2008 and he didn't have any desire to get into this business.

And one day he just decided to give it a go. To give it a go. Grew very quickly. The first year they did 20 million in, revenue. Very quick. And so, you know, this is 2016, it's 2025. We just did 175 million last year. We: are the third largest, wet utility contractor in DFW. We're one of the only people that can get considered for certain projects because of our size and because of our heavy equipment fleet.

John Wilson: In that first year, was it like subcontract? Like I don't understand how the labor pool works on zero to 20 million in a year.

Kelly Roberts: We are really blessed to be in the DFW Metroplex and we expect, and even in the beginning, we have pipe crews that just come into our business every single day looking for work.

So we have about six people per pipe crew, about 36 pipe crews now. And We had, they had enough contacts in the industry to, attract some labor and we've just continued to grow that labor. We're lucky to be in this area. Lucky. It's, 100 percent Hispanic workforce, but there's just a ton of work here and it attracts people to this area.

Jack Carr: Are the contracts more on the municipality side or are you working for like new homebuilders doing full subdivisions where does that kind of fall?

Kelly Roberts: That's what's really unique about our company is we started out doing mostly commercial work and we've been very lucky to diversify.

So yes, we will do a subdivision. We will do, a public infrastructure project. But we are mostly private development. So we are working in data set. We do data centers, schools, trying to think multifamily, we do hospitals, we do multifamily. We do, we do it all. We did not go straight for subdivisions in the beginning.

Cause that's what Garrett's. Dad had done previous. I feel like you guys are going to be talking to Garrett, but that's what Garrett's dad had been doing previously. And that took him out in 2008. Cause it was just a really hard time to be in that market. And so Garrett's idea was always to diversify and we've been able to do that and find some great partners along the way.

John Wilson: That's fascinating. I'd love to talk more about you. So you get into Moss. How did you enter? How did you enter that?

Kelly Roberts: So it's kind of a long story of how I've gotten here. Um, so it's kind of the typical story. I was a college dropout, back in 2012. I'd done a year at TCU and realized that I didn't know what I wanted to do and definitely couldn't afford to pay the tuition there.

And so I'm kind of bumming around Fort Worth trying to figure out what I'm going to do. You know, been a server at a couple of different restaurants and I meet someone and they work for an air conditioning company and it was a woman named Donna Matkin. She was the call center manager for a little air conditioning company out of Fort Worth.

And, she hired me. I have no idea why. I don't know what she saw in me at that time. I was a total bum. And did not have any professional experience. You know, I remember her sitting down and really teaching me how to talk to customers, how to write an email, how to be professional, how to be polite, how not to cuss.

And you know, it's, she really, she really built me out of. You know, just like a regular server to a call center employee. And it was kind of right place, right time, but right. As I was, I'd been there about six months when a bigger company from Dallas came in and purchased air ride, rolled them up underneath them.

And then from there, I just got great one great opportunity after the other. We had an EOS implementer come in named Scott long, who just. Like he, we just really, we were, it was kind of a meeting of the minds and he just spent the next few years pouring into me. So I went from, you know, kind of being the person calling and scheduling maintenances to running the service department for Crawford services.

And they were, you know, medium sized company doing about 15 in revenue a year.

Kelly Roberts: It was there that I met Garrett. Garrett was, you know, fresh out of UT. Also didn't really know what he was going to do with his life, and he was working as a design tech, at a big new construction department at Crawford, you know, that's how we met, while we were both there, we met our spouses, and just kind of continued a friendship.

He ended up moving on and eventually starting Moss Utilities, and I was. at a point in my career where, I was part of the executive team. I was part of, all of the EOS stuff we were doing for Crawford, but I could not convince, anyone to pay me more than 55, 000 a year, regardless of what I did.

And I just, you know, was. was barely affording daycare. I was like, I can do more than this. And I was like, I'm going to take a chance on myself. And so Garrett was on LinkedIn. You know, it's, we go back to LinkedIn a lot. I think LinkedIn is a huge resource for people. And I'm following Garrett along on this path of him starting this company and all of a sudden growing so big.

And I'm just blown away that this is the same guy that I used to, you know, Go out to Pete's piano bar with and stay out until two o'clock in the morning. Like I'm like, what is going on right now? And so I, just kind of out of blind faith go over and I'm like, Garrett, you know, I don't know what I'm going to do here, but let's figure it out.

And he was like, okay. You know, let's figure it out. So I sat at the front desk and I was like, what did I do? You know, I left like this mid level management job to go sit at the front desk and fight with, everyone to give me stuff to do because no one trusted me. I was like, you know, give me this. Like, let me solve this problem.

And I just kept asking, kept asking. And so eventually one of the things that I got, to do from the front desk is we had a CFO at the time who didn't know anything about construction accounting and he was Great guy, but just didn't come from construction. We had just, implemented a new ERP called spectrum and he couldn't figure out how to make the whip work.

And so sitting at the front desk, I figured out how to make the whip work and how to enter projected costs. And after that Garrett was pretty much like. Okay, you can do whatever you want, what you want to do. And I was like, well, I don't know, so I was in accounting for a year and then I was like, no, I want to manage projects.

I want to look at what we do every day. And so I went out and bought some red wing boots and a construction vest and started managing projects. And I learned how we put pipe in the ground. And, uh, it was such a cool experience to get to see what we actually do on that side. So I spent about a year and a half doing that.

And then that's when we really got into a lot of financial trouble. And I think that, you know, we just had a kind of a crazy situation where we had a CFO at the time, you know, great guy, still really good friends with this guy, but just got us into kind of a pickle a little bit. You know, the, one of the hard things about construction is retainage.

And we were, just having an incredibly difficult time cashflow in the business. And, so we did what anybody who's in a cash flow struggle does, you know, we took a merchant cash advance and we got into an asset based lender. Um, and, you know, at some point we're paying like 18 percent on our, you know, four and a half million dollar revolver.

And basically we're just crushed. We're crushed under the weight of it. And so this is like March of 2020. Which, as you guys know, what happens in March of 2020 and yeah, it was a tough time. So a CFO comes in and he basically says, Hey guys, Love y'all, but I'm leaving and I'll give you 1 week and I highly recommend that you felt bankruptcy.

And so then it was just me and Garrett kind of looking at each other. Like, what the hell just happened?

We knew it was bad. We didn't know it was that bad. He's pretty much like tell me who to train on the bank rec as I'm walking up, you know, as he walks out the door and Garrett's like, well, Kelly, I guess just turn Kelly on it.

So I learned how to do the bank rec. We hired an interim CFO who is a CPA and he spent the next two years coming into the office for eight hours a day, just playing. Pouring into me and teaching me everything I know about being a CFO. It was in 2021 before we ever really had utilities figured out or, we decided to start moss heating and cooling.

I have no idea why we did that. It was a terrible idea. We were out of work, terrible. I mean,

John Wilson: It sounds like it works,

Jack Carr: But maybe bad timing.

John Wilson: I mean, hearing the story, I'm also like interesting pivot. You know.

Kelly Roberts: Well, we got really blessed in utilities, as you guys know, it. COVID right at that time. And so, you know, we had just, you know, kind of right place, right time.

We had, you know, PPE come in and help us get going. And then we had a bank come in and just be such an amazing partner to us and really see what we were capable of before we were capable of it. And they came in and they structured a deal that helped us get. helped us get here. And so, you know, by 20, by 2021, we are doing a lot better financially.

Our projects are starting to make money. We're starting to cash flow. And, uh, my husband has been in the, um, heating, cooling business forever. And with him and a partner that we had, we decided that we would start moss heating and cooling. And that company was going to be focused on doing high end residential new construction for HVAC and high end residential plumbing.

Took us a couple years to figure out that we are not plumbers.

John Wilson:  I talked to, a company, this was early on in my career. They were primarily new construction, but they were plumbing and they did the same thing.

They were like, it was awesome because we found out we could lose money in plumbing and HVAC new construction. I was like, that's great.

Kelly Roberts: Yeah, you definitely can. That's available to you. Especially when we just went after this like really high end custom world and there's absolutely nothing wrong with high end custom.

You know, we do a couple million dollars of high end custom work and HVAC now, and there's definitely a place for it. It's not as lucrative as it was about 10 years ago. Cause there's a lot of competitors in the market, you know, like 10 years ago. Crawford could throw a bit out there for just a crazy amount of money. Now, you know, they shop around a little bit more. So there's just not a ton of profit in it. It takes about three years to build a custom home.

John Wilson: Really like how big is that twelve thousand per foot or what are we talking about? Yeah,

Kelly Roberts: We've done all kinds of cool projects.

We've done things from. 10, 000 plus to 15, 000 plus. I mean, some of these houses are so intricate and it really does. It'll take three years to close those projects out. And so if you just think about that, and just think about it from a profitability fade standpoint, like you start out, you think you're doing pretty good. And then by that last year, you're just doing warranty because it's such a. You know, such a massive system that you've created. You basically installed a huge commercial application, you know, because we've done geothermal VRF and it's just, it's not a lot of money at the end, just to be perfectly honest.

You know, I hope that we figure out how to do those more profitably, but we haven't figured that out quite yet. So that's why we really switched to like a production, more of a production type model, which we like a lot more.

John Wilson: Do you think, you said 10 years ago, it was like a different environment, for custom, do you think that there was just because there was less people?

I mean, fresh out of 09, like I remember that well, of what the industry was like. So it was, there's just less people willing to jump on new construction or like what was different?

Kelly Roberts: A really interesting lens of what that world looks like, because I worked for a company that was kind of willing to always say yes,

And, and so we had some really just crazy profitable projects. I mean, I've seen contract values in the million, you know, million plus for a residential, so. construction home just for the HVAC. And so, I just don't think that those projects exist quite like they used to.

and you know, I think that also people figured out that we're still pretty new on some of that technology. there's a company here in DFW that exclusively does VRF. if somebody was to call me tomorrow and be like, Hey, will you install this really complicated VRF system in my 20, 000 square foot home?

I might be like, you know, there's a company here that does that. And they're going to do it a lot better than we are.

Jack Carr: It sounds like in do what you're good at and don't spread yourself too thin across all different platforms and areas. Because I mean, we talk about that a lot on here is, newer, newer contractors like to do a little bit of everything.

And it sounds like it just bites you in the ass at the end of the day.

Kelly Roberts: It really does. you know, we've been really lucky to grow Topline like we have, but we are still very much figuring it all out. the type of production work that we do, we stay away from the low end residential application and kind of go for more higher end residential production application.

So we're talking, you know, two, three systems, maybe sometimes four system production homes. things are just kind of different in Texas. People come here, they build these huge, big mansions for the same cost of like an apartment in California. So, there's just a lot of, opportunity for that type of work here.

John Wilson: Yeah. We had, Matt Ballard on maybe two months ago and he has sunrise in Vegas and I think it's probably like similar, like hot, lot of money. Cause like, I don't think, I don't think Cleveland has what you're describing. Like, that's not a thing.

That's not a thing here. Like, it would be with, I'm trying to imagine what that would look like. There's Ryan Holmes. I don't know if Ryan Holmes is in Texas, but it's sort of these like builder grade, you know, 300, 000 feet. yeah. So that's what we see up here. So I'm like, I'm trying to envision this and I'm having a hard time cause I'm just, that's what I'm used to for production.

Not like multi million dollar production homes.

Kelly Roberts: Yeah, and that's really kind of our target is that 1, 000, 000 plus home, which they just build, you know, they build thousands and thousands of them here. You know, we're trying to do 2000 homes and new construction this year and they're all, you know, like, if we were to sit down and look at an average system count, I would put it, I'd put it at probably 2 is what I would say.

Two systems. That's not loud. I almost want to say two and a half, but I'm going to say two.

John Wilson: How many homes did you guys do last year?

Kelly Roberts: We did right around a thousand.

John Wilson: What is the infrastructure requirement to go from a thousand to two thousand homes?

Kelly Roberts: Well, so Texas, we do all of our labor with subs. That's the only way that you can compete in the new construction market here. And it's funny that you said, Sunrise. So that was actually the first owned and operated podcast I listened to because I was talking to somebody and they said, Oh, you're a new construction.

You have to listen to this podcast episode of this guy who's doing it out in Vegas and kind of how they're making money. And I actually took that episode and went and beat. I went and talked to, I say beat up, I shouldn't say beat up, but I went and talked to all my vendors. I was like I just think that they're relieving money on the table here.

That's such an important thing. Like if they just go unchecked and I'm kind of off topic, but you have to go back and talk to your vendors every single year. Or you're leaving money on the table.

I think that I was able to kind of negotiate about a 6 percent decrease and our largest vendor on material pricing. with this type of new construction, we're looking for about a thousand dollars a home. That's what we want to make. And so if I can negotiate 6 percent discount on materials, we're getting somewhere, we're doing something.

John Wilson: Well, just the nature of how fast your business changed. Like I don't even think once a year is enough. Like if, Hey, you're saying I'm going to double, I'm sure in the previous year it's 500 or something like that's like once a quarter in, in my, like, Hey, our business is actively growing.

If you're putting in 4, 000 boxes, like you can do a lot of damage. Cause if it's two systems per home, like that's crazy.

Kelly Roberts: One of the cool things is we get this like national account pricing. So when you do this type of work, like Linux is already, you know, created all of these contracts with different home builders.

So we're really kind of tied to some of those numbers. So where opportunity for savings is really the material, you know, Ductwork, I mean, anything that we use on those jobs, and then the ability to figure out how to use less. That is what our focus is this year. how do you use less?

John Wilson: Have you visited Matt's place?

Kelly Roberts: I would get on a flight tomorrow. You want like an intro?

John Wilson: Yeah. Well, one of my directors is going out there in a week or two, like we're not in construction, but I think he does. they're just such a machine like the pre production.

is, is incredible. And like, I think that's their magic. in, you know, I'm not trying, you know, Matt, don't listen to this, but I'm not trying to inflate his ego too much, I'll introduce you. You should go. So back to infrastructure request, cause I'm still just like a thousand to 2000 homes.

So we subcontract. What happens with, like, do you need another purchaser or two? Do you need more PMs? What did you have to change to double?

Kelly Roberts: We are one of those companies who, when we were all at Crawford and other companies. the thing that really made us want to start this company is we wanted to pay people what they were worth. That was always something that was very important to us.

So it is very easy for us to attract people because we pay people a whole lot more than everyone else does. and so when we say, Hey, we need a project manager, there's about. four people in our building that are going to call previous companies that they worked at and get us fresh labor in the door the very next day.

So it looked like project managers was the big thing because that's who really manages the entire project. We allow them to purchase for the project. We allow them to schedule the sub. So it was increasing project managers. The one thing that we're really trying to increase this year. So we have, a design team, in house and we have added some really great talent to that team.

We can sometimes be bad about kind of hiring somebody that somebody's brother because we like them. And we're like, Hey, we're going to give that person a chance. And so they kind of come in and they like teach themselves how to do, duck design. And so every single year we get a little bit more skilled labor in the door.

And so we just hired this woman who I'm just so excited. She's here and she's just got all these ideas already. And so I think that the thing that we always do is we ask people what they think, like Okay, where are you at? Do you, are you overloaded? Are you not? What would you do to make this better? And we listen and, you know, so we're kind of at a point with the design team that they were like, okay, we're overloaded and we don't really know how to get to the next stage.

So that's when we decided to bring in a new design person.

John Wilson: The PM role is really interesting to me. So how many houses can a PM manage a year? And like, how do they, how do they win? Like, what does that look like? Cause that's a ton of responsibility.

Like you can buy, you can plan labor. So how do you like set that role up for you and them to win?

Kelly Roberts: That's a great question. when I've completely figured that out, I'll answer it. But what we've done right now is we just try to give them resources, you know, so we have superintendents in the field that oversee the labor that gets done.

So we have a really cool Workflow called monday. com and that's kind of helped us create like our p. m. task, everything from start to finish of a project, p. m. Can handle a lot. Well, I mean, we've had weeks where a p. m. Had 50 different roughs going on that week. and you know, that kind of ebbs and flows through the summer months.

We're kind of trying to figure out what our capacity level is per p. m. and we're also looking at. Is it time to bring in just a purchasing person where all they do all day long is just purchase because to be perfectly honest, like we haven't figured out how to make the profit we want to make yet, you know, and I think the, one of the things that the biggest issue for us is material and it's, you know, is it a question of do we just overorder?

Is it a question of should the PM not be the only person responsible for ordering? there's a lot to it. one thing that we do, or at least I think we do it well, is we. Manage fade on projects. Well, so because of my background in accounting, one of kind of the very first things I did for this company was get them on an E.

R. P. That's construction focus. So every single month they're sitting down, they're looking at their weapon. I've even added this third party software called brick that helps us do all of our whip reporting. And so every single month they get in, they see a list of all of their projects and they tell me how much cost they have left on that project to complete it so that we can carry a proper under over billing on those.

they're looking at their costs. they have a really great platform and a spectrum, which is our ERP to be able to get in and look at job costs. They're responsible for approving their invoices too. So as invoices come in, they compare it back to our book price.

And they're really responsible for ensuring that that job comes in on budget.

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John Wilson: Is there like a bonus by job or by month.

Kelly Roberts: That's great. I came from a world where everyone has, they're kind of tied to a number and tied to an incentive based on a number We have not.

Got our project managers on that yet. Now I will tell you they are paid very well from a salary perspective. but we're just not to the volume level where we want it, where we're starting to think about things like that. and how we get them more involved in saving, you know, instead of ordering the extra bag of flex, not ordering that extra bag of flex, because it gives you an extra two, you know, extra 50 on the job or whatever that number is.

So we're trying to figure out how we can reward them where it's a win win for. Both us in the company or for them in the company.

Jack Carr: So, you guys did 7 million last year. How many project managers did that take?

Kelly Roberts: So, 1. 2 million the first year. The second year, 7 million. But remember, this is when we have plumbing.

So, we're doing plumbing service, plumbing new construction, and then HVAC, new construction, mostly custom at that point, and then service and change out. we were really lucky to be blessed with a retail partnership in Lowe's. So we do about 65 percent of our, change out through them.

Won't get into that a ton yet, but that was the year we decided that we weren't going to do plumbing anymore because we just really, we lost a ton of money on plumbing. God bless anybody that knows how to do new construction plumbing. So the next year, you know, we stay, we stay stagnant. We do 7 million again because we've lost, just a big portion of our business and service and, new construction plumbing.

Right about the end of, so I guess that's 2023. We really start developing some great big relationships with production homebuilders where they are confident in us. They start turning over neighborhoods to us that other contractors have, and it goes kind of like gangbusters a little bit overnight.

So July of 2023, we have a 2 million. By about April of the next year, we have a backlog of 20 million. Because we have created so many partnerships. and people are just really starting to trust us and they turn over so many different neighborhoods to us.

We get into a great relationship with Taylor Morrison doing builder rent projects. So that's the other market that's just kind of going kind of crazy and DFW right now is builder rent projects. and those are 300, sometimes 400 unit. contracts, so we had a contract of, two and a half million for Taylor Morrison and, those just kind of came to us very quickly.

And so we spent 2024 going through that backlog, you know, right now we have a 24 million backlog in new construction. So we're hoping to hit that, you know, 15 million mark just in new construction alone this year.

Jack Carr: Yeah, as two guys who are residential service only, can you talk more about, like, I love B2B.

I've always been super interested in it. John has a zero interest.

John Wilson: Lost a lot of money in construction. There's something about losing millions of dollars.

Jack Carr: Some trouble, but can you talk about more of that relationship building and like what going into that, right?

you're switching how you're looking at, who you're going to go after, I guess, who you're going to work with. I mean, that's a big shift. Do you guys have sales development managers or like who's making those contracts? How does that all work?

Kelly Roberts: So we are really blessed to be part of a much larger organization in Moss Utilities.

So you can drive down any highway in DFW, you're going to see this great big connex with Moss Utilities on the side of it. because our name is also Moss, I can walk into anywhere with a moss heating cooling name tag and they're like, Oh, I know who moss is. I'm like, yeah, probably actually don't know who moss heating cooling is, but you do know who Moss Utilities is.

And so we were really able to leverage some of those pre existing relationships to get in the door. And once we were in the door, we had the right people to keep the relationship going. We try, you know, we do the same things everybody else does at the end of the year, you know, we'll get all these really cool gifts and we'll go visit with each one of our home builders and talk about the year and, but constant communication, but we don't have a business development person.

My husband works for the business and that's really his role is to, you know. Really pre construction. So review all the bids, make sure that they're going out when they're supposed to go out, go walk the job site with somebody, talk to this manager. So he kind of handles that portion of the business, but it was really just the name recognition from Moss Utilities that helped the relationships we already had in the market.

And then, it's actually really funny, but our largest home builder came to us from one of our competitors called Tempo Mechanical. Tempo is very much like Sunrise. They do, Kind of a lower end production model where they're going in and doing one system homes and they even prefer for those houses to be one story because they just know how to do this so efficiently and we could never really touch what they do in that particular market and they were dealing with a home builder that just didn't really fit that and they called us up one day and was like, hey, We would love to introduce you guys to this home builder and, you know, they introduced us.

We probably do two, 3 million with that home builder now every year. So a lot of luck basically, that's what I'm trying to say. We were just really lucky.

Jack Carr: Let me do the brand recognition thing is cool though. I mean, the fact that you're able to leverage that, yeah, it's already, people already know the name, especially in construction, it's right up, it sounds like an easier transition

Kelly Roberts: Yeah, that's the other thing that was really cool and, you know, sometimes really frustrated me about Garrett is Garrett spent so much money on marketing and logos and branding before we ever had any of that money to spend. And I just remember I would get so mad at him because he would He would put moss on absolutely everything.

And I will tell you that was the smartest thing he could have ever done because the moss name is so well known in DFW and we just, and mossy and cooling just really gets to ride their coattails on that. and so, you know, again, before we had the money to do it, we have just been really great about branding our trucks look great.

that's awesome. Our uniforms look great. Everybody's got, you know, nice North face jackets. We just, we tried to, You know, if you get into EOS, like one of our uniques is that we care about our image. We care about what people see. And so that's really helped us.

John Wilson: We were once described as omnipresent and that's probably a huge win for you guys. Cause I think like people don't probably really remember. They just remember the moss and like, yeah, that's going to do it. That's amazing. All right. So first year 1. 2, second year, seven, third year, seven, fourth year, 15. That's a lot. That sounds like fun.

How much, like there's a service component in here too, that we haven't touched on yet. so like, what does that look like? Is it the same cruise? Is it captive labor? Is that subcontractors too or like walk us through that part?

Kelly Roberts: So we have, we provide a one year warranty to every home that we, service.

We have two warranty guys and we stole those warranty guys from one of the biggest, best companies. They are, paid extremely well, because they're extremely knowledgeable, and they run all of our warranty for us. Now we have a really small service department for a company our size. We actually only have outside of those two warranty guys, we have three technicians.

And now we've gotten up to five or six and, you know, kind of ebbs and flows with the summer months. so, you know, right now we have three technicians in our service department. And so really our goal, and We haven't quite figured out how to do this, but it's one of our primary goals this year is to really learn how we convert the new construction client to a lifelong service customer.

John Wilson: Yeah.

Kelly Roberts: We've played with all kinds of different ideas there. Sometimes it's kind of hard to get the builder to give us the information of who's moving into that house, which is just really silly to us. And so, you know, we've considered the idea of, you know, doing a one time maintenance for each of those customers to just gain their, gain their information, create a relationship.

And so that's really. How we plan to grow that service side, is just converting new construction clients to our service business. because you know, our service and change up business has only grown because we, developed a relationship with Lowe's because we had a manager here who had a relationship with Lowe's and they gave us 27 stores in DFW.

And believe me, I know that like one of the no, no's of starting your own business is. to develop a retail relationship because they're discounted. Like I know why we weren't supposed to do this, but we did. And, you know, so now we do like 65 percent of our revenue out of lows. and we're really hoping we just, we're on the precipice of getting another retail relationship on that, is very coveted in DFW.

And I can't talk much about it yet, but if we get it, we're really hoping that that grows our change of business by about 2 million, 2 to 3 million, just change out per year.

John Wilson: So one of the people I admire the most in our industry, her name is Ashley and she runs a massive business in Ohio.

It's a three location. Like very large business and they got up to three locations and they got up to, yeah, they're between 50 and a hundred, just pure residential swap out. And the first 20 years, all they did was Lowe's and Home Depot. and that carried them through 40 million freaking dollars.

And then they just, transitioned away from it and became like a retail, just a normal, service provider, but they just kept growing. So, I mean, she's amazing and their business is amazing. I think she's coming on the show in the next couple of weeks and we're going to deep dive into it because it is fascinating.

Yeah, it's really interesting, and like we've tried to make those relationships too so yeah, no, I'm all about it. I think that's great. 27 is amazing. That's a ton of stores.

Kelly Roberts: Hey, you know, so that really is what built our change out department pretty much overnight.

John Wilson: Have you guys thought about white labeling the, the Lennox boxes or something like that? We bought a couple of new construction companies over the years, and we still get service calls from them with it. It did exactly what they wanted it to do. It just did it for the next owner, which was me, and it was great. But, they, I was like stickers on water heaters and, but in HVAC, like, I don't know if Lennox does it, but Goodman definitely does where you can white label it.

Or there was a company where near we are, and they covered the whole front line. of the box. I don't know if you guys are interior or exterior, like Phoenix or something, but they covered the whole in front of the box with like a two foot tall sticker. Like it was absolutely egregious, but nobody could, nobody could cover it up.

Kelly Roberts: I love that.

John Wilson: Yeah. I mean, cause if that's the easiest way, like we still get phone calls from, Hey, aren't our plumbing put in this water heater in 2005 and I'm like, yeah, it's crazy.

Kelly Roberts: The stickers do work, we put the stickers on, we're hoping, you know, I feel like we're still relatively new, so we're kind of waiting for those first service issues to happen where they're calling in on the number.

John Wilson: It's like the moss truck thing, like you'll be happy in a decade.

Kelly Roberts: Yes.

John Wilson: Was the best idea I ever had. At the time, I didn't have the money. It's going to be the same thing. We're going to talk again in the decade. It's going to be great. You're growing on the back of a high end, new construction, and then retail partnerships.

And I mean, you've really been able to blow up out of. Can you give me a sense of how many houses get built in DFW a year? Cause I have no, I have no concept.

Kelly Roberts: Oh gosh, I couldn't tell you. But I know that we have three or four relationships with builders that build at least three to four thousand. So, I mean, it's gotta be just a ton.

John Wilson: Yeah.

Kelly Roberts: That's a great, that's a great question. Hmm. That'd be a really interesting way to measure our market like saturation too. Yeah. That's great. I mean, 95, 000 people moved here just last year.

John Wilson: You guys all need to calm down. I think that Sunbelt states are just wild. They're just absolutely wild to me. Like I went to Dallas, in August last year.

And first off, it was disgusting. It was like 110 degrees or something outrageous. And then like. I don't understand how people move to a city that like basically doesn't have water. Like, I don't get it. Like, where do you guys get the water? Like, I visited Phoenix and they're like, now we're growing like crazy.

I'm like, you have no water. Like, how are you growing?

Kelly Roberts: Yeah, you know, it's funny. I just said, invited to something where the governor was speaking and the majority of it was about that. It was totally over my head though. So I don't remember a lot about it, but yeah, it's definitely a problem that somebody is going to have to figure out.

John Wilson: And you're going from one to 2000 homes a year. And that's going to take some PMs. what does the other office staff look like? like who's on the team?

Kelly Roberts: So we have 48 employees at Moss. heating, cooling. and so we have three people in the call center, a call center manager, service manager, three techs, three design techs now, four to five PMs.

and then install manager, sales manager, that's a, the install manager is the sales manager, three, salesman, so comfort advisors. We don't do a selling tech model. We do a comfort advisor model and, install coordinator.

That's about it.

Jack Carr: So what are the comfort advisors doing? Are those mainly for the Home Depot calls or, Lowe's calls, or are those going to, They get new construction work.

Kelly Roberts: No, they don't have anything to do with new construction. So we were in three separate departments. So like if you were to look at our P& L, you'd see three separate departments, three separate general ledger codings.

and so each department has their own budgets, their own responsibilities for what they want to hit. So change out, they, we do, you know, we do all the other crap that doesn't work. Paper leads, Angie's, you know, all that stuff. I just recently implemented service scalers because John, you said to do that.

So I'm doing it. I'll tell you how it works out. you know, so they run those types of leads. They run tech leads. We try to feed them with as many leads as possible. Some of those are really great and some of them are a massive waste of money. so they're just responsible when somebody calls them once they're heating an air conditioning system replaced, that's who goes and gives them options.

We haven't found the right people. I think that's such a unique. Person. cause I think that in my brain and a lot of people's brain, techs are people who want to fix stuff.

They don't want to talk to people. And so trying to find somebody who is both, good at fixing stuff and talking to people has proved to be a challenge.

John Wilson: For, you know, this is just like an aside. I, something that's been kind of interesting, over the past and it, it genuinely sort of breaks my brain. I, I think it's because we've gotten better at doing things, but, maybe.

Maybe not. I have no idea, but like the Angie's list of the world, the modernized that like lead aggregators, they have been like really winning for us. And maybe it's, we're just doing more HVAC or, I don't know, but like, I think it's, I know we did a ton of work on our rehash. I know we did a ton of work on our speed to lead process, but like other people are doing that too.

So I'm not sure why it's suddenly working for us, but. Like, it's amazing. Like, we're getting a better return on investment from Angie's than LSA right now. No, I mean, I just think it's lead aggregators have always been like a thing, like a challenging thing. And, yeah, I mean, you're, you're, on one hand, I think.

Like, yes, that makes sense. And on the other LSA has been a real challenge for the industry for like a year and a half or two years now. And I'm like, wouldn't that mean that everybody moved over to lead eggs?

Jack Carr: Well, everyone moved over to LSA and that's what made it hard is competition. So fierce. And so now you're moving back to Angie's to get away from the fierce competition.

I got, I got to stop talking about it here. Kelly, how are you thinking about don't do it. You have a ton of street cred in DFW So have you ever considered? Moving towards a in person mark, I guess in person legion. John, what do you call it? You have a specific name for it that makes more sense than me trying to explain this

John Wilson: Yeah, we call it field marketing, but I think in this case, it would be like home shows.

Kelly Roberts: You know, one thing that we're trying to do is partner with, real estate brokers that we know. So this is kind of a new thing for us. So we, had a couple of friends that had big brokerages, you know, hundreds of agents in their brokerage. And so we've gone and sponsored things for those guys and got up in front of them and talked.

So kind of, you know, just trying to get them familiar with us. So when they do have, cause every single one of those realtors know some guy driving around in a truck and he, they've been calling him for 10 years. And so our idea is, Hey, when the guy in the truck doesn't answer the phone, just call us.

And this kind of opens this up to all of their clients. So that's something that we're trying right now. all the things that we've done, I will tell you that marketing has been the absolute hardest, worst, just marketing. We, we can't figure it out to be perfectly honest.

last year we went big, we did a commercial. We. advertised on a local radio station. we didn't get anything out of it. I mean, I can't go back to service Titan and look at a single person that called in and mentioned that they saw us on a commercial. so anybody thinking about doing a commercial don't, unless you're just this huge big box company and you can afford it.

Like, just don't do it. It's a trap. But, you know, so we're now we're trying to figure out like things like service scalers, because we never did Google ads. We never really, you know, this is really just a kind of a, you know, me and Garrett are really kind of just construction people trying to figure out how to make a heating and air conditioning company run.

And, you know, so we're, we're figuring out the marketing thing, but I'll tell you, that's been the hardest thing for us to figure out. I mean, we've done magazines, we've done all kinds of stuff.

John Wilson: You've got a lot going on. I mean, you've got like some real. players, you know, like you've got Baker and you have Milestone and, ABC. But you know, when I was down there last August, we'd just visited with some friends, so I visited, Jimmy at Baker and I visited Josh with rescue and everyone's struggling with leads down there.

it was like a bloodbath is the way they were describing it. Like tens of millions of dollars of revenue down because they couldn't get the leads. So I really like being in the market. I'm kind of into what you're doing.

So like, they're not going after the 20, I mean, maybe they are, but they're not like chasing down those 27 low stores. Where's like everyone in the world is trying to drive more leads through Google LSA. so I really feel like you've got a unique advantage here.

Kelly Roberts: You know, the other thing that we've had to realize though is that we may just not be able to, you know, while we've really, grown new construction organically, we don't think that we're going to be able to do that on the service and change outside. And so we are actively considering acquiring other companies.

We're looking at a company right now, because the, You know, DFW is a great place to be, but as a heating and air conditioning contractor, it's a very tough place to be because you have the big three, big five air conditioning companies that have so much of the market and can just spend so much money on marketing that you really can't touch them as far as brand recognition goes.

and then you've got 3000 other people who are just can, you know, kind of undercut you on price. So it's an extremely competitive market. So the way that we have kind of gotten to now is we're going to have to find successful service and change out companies and. you know, hopefully maybe acquire one a year.

John Wilson: Yeah. the market is just huge too. there are very few markets in the U S that have multiple over a hundred million dollar operations and DFW is one of them. Like it's just a, you know, that's crazy. There's like two other cities that I can think of that have that.

Kelly Roberts: And they're massive, like milestone in one year.

John Wilson: Baker's huge. I thought Baker was 65, but they're 130. And I'm like, that's crazy.

Kelly Roberts: That is crazy. You know, it's funny when you see that on the new construction side in this market too. I mean, there are multiple. new construction companies that are over a hundred million too.

So not just the residential change out service guys, but the new construction guys are really big too.

John Wilson: Well, I think what I want to do is sort of our close out question here is, somebody else out there. is like, man, how do I work my way through and end up being the CEO and CFO, of a startup home service company?

What advice can you give for folks? You've had an amazing career. Like how do they get where you're at?

Kelly Roberts: I think a few things. One of the things that I think is, when you see a problem, raise your hand and volunteer to solve it.

If you can figure out how to think through problems, people will continually promote you, period. If you can do the heavy thinking for them, you're getting promoted. I always said yes to if somebody said, Hey, can you handle this? Hey, can you take this on? Hey, will you do this? You know, Hey, we stay here till eight o'clock tonight to figure this out.

The answer was always yes for me. Yes, I'm willing to do that. and, you know, I had a good attitude about it. I also had a lot of motivation around it. not only did I say yes, but yes, and I wanted to figure it out. And so I think that helped a lot. especially for women,

a lot of women get like, just, just kind of, they're meek and they don't want to raise their hand and they don't want to be the person that's loud at the table or be the one that's direct. And I don't have any issues with being either one of those people. I will be direct.

I will tell you what you're doing wrong. and I will say it to you enough times until you hear me and we correct it.

John Wilson: I think it probably will. I think that's awesome. And you also have your own show where you help talk about being a female leader in the trades.

Kelly Roberts: Yeah. So we started pressure tested, last year. And it was really funny because a few guys around the office wanted to start a podcast and. Of course, I just raised my hand. I was like, well, you're not going to, you know, invite me to be on your podcast. Like how dare you?

And I was like, okay, forget it. Y'all have your own podcast, but I want to take it over once a week and talk to women in construction. And they were like, okay, whatever. their podcast just never really got off the ground. They couldn't all, decide on what they wanted out of it. And in the meantime, I just started recording. And then all of a sudden I had, nine episodes recorded. And I was like, well. let's release them. Let's see what happens. And we did. And, we have 10 episodes scheduled over the next, three months. And I've just found the coolest women, really selfishly.

It was about finding women that I wanted in my own network. I wanted to sit with really smart, powerful women. And that's exactly what I've been able to do. and people have, attracted to it and they really like it. So it's pretty cool.

John Wilson: Well, Kelly, thanks for coming on today. This was awesome. I appreciate you sharing it with us today.

Kelly Roberts: Thanks for having me on.

John Wilson: If people want to connect with you and ask you questions about how to do this, how do they get a hold of you?

Kelly Roberts: Definitely LinkedIn.

John Wilson: Awesome. We'll provide that link too. Thanks for coming on.