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

In Episode #172 of "Owned and Operated," hosts John Wilson and Garrett Moss engage in an insightful conversation with Kelly Roberts, the dynamic CEO of Moss Heating and Cooling and CFO of Moss Utilities. Kelly shares her remarkable journey from a college dropout to leading a thriving HVAC business with a $15 million revenue stream. This episode delves into her strategies for business growth, overcoming financial hurdles, scaling operations, and fostering effective team dynamics. Below is a comprehensive summary capturing the essence of their discussion.

1. Introduction to Kelly Roberts

Kelly Roberts joins the podcast as a dual leader, managing both Moss Heating and Cooling and Moss Utilities. John Wilson introduces her roles, highlighting her significant contributions to both companies.

Notable Quote:

Kelly Roberts [01:31]: "I'm excited to be here and share our journey with your listeners."

2. Kelly Roberts’ Career Journey

Kelly recounts her path from dropping out of college in 2012 to becoming a CEO. Initially working as a server, she transitioned into the HVAC industry through an air conditioning company, where she developed critical skills in customer service and professional communication under the mentorship of Donna Matkin.

Notable Quote:

Kelly Roberts [07:03]: "I took a chance on myself and learned everything from the front desk up to managing projects."

3. Building Moss Utilities and Moss Heating and Cooling

Moss Utilities, founded in 2016 by Garrett Moss, rapidly scaled from $20 million to $175 million in revenue by 2025, becoming the third-largest utility contractor in the Dallas-Fort Worth (DFW) area. Simultaneously, Moss Heating and Cooling expanded to $15 million, focusing on high-end residential new construction.

Notable Quote:

Kelly Roberts [05:12]: "We are one of the only companies considered for certain large projects because of our size and equipment fleet."

4. Overcoming Financial Challenges

In March 2020, amid the pandemic, the company faced severe financial strain when their CFO advised filing for bankruptcy. Kelly and Garrett narrowly avoided this by taking control of financial operations, hiring an interim CFO, and restructuring their financial strategies to stabilize and grow the business.

Notable Quote:

Kelly Roberts [11:27]: "We knew it was bad, but we didn't realize just how bad it was until our CFO walked out recommending bankruptcy."

5. Shifting Business Models: Custom to Production

Initially, Moss Heating and Cooling pursued high-end custom HVAC installations in luxury homes, which proved less profitable due to intense competition and the intricate nature of custom projects. Recognizing the need for a more scalable model, Kelly pivoted towards a production-based approach, focusing on volume and efficiency to enhance profitability.

Notable Quote:

Kelly Roberts [14:35]: "We found out we could lose money in plumbing and Hvac new construction, so we switched to a production model that aligns better with our strengths."

6. Scaling Operations

Scaling from servicing approximately 1,000 homes to an ambitious target of 2,000 required significant adjustments in infrastructure. Kelly emphasized the importance of leveraging subcontractors to manage labor demands and enhancing project management through tools like Monday.com to streamline workflows.

Notable Quote:

Kelly Roberts [19:43]: "We do all our labor with subs, which is essential to compete in the new construction market here."

7. Recruitment and Team Building

Kelly highlights the company's commitment to attracting top talent by offering competitive salaries and fostering a positive work environment. This strategy ensures a steady influx of skilled project managers and design technicians essential for managing the increased workload.

Notable Quote:

Kelly Roberts [24:52]: "We pay people what they're worth, which makes it easy to attract and retain top talent."

8. Marketing and Lead Generation Strategies

Marketing posed significant challenges for Kelly and her team. Traditional methods like commercials and radio ads yielded minimal returns. Instead, they found success through strategic partnerships, notably with Lowe’s, which accounts for about 65% of their change-out revenue. Additionally, leveraging the established brand recognition of Moss Utilities facilitated new business opportunities.

Notable Quote:

Kelly Roberts [27:30]: "Marketing has been the hardest thing for us to figure out. Traditional ads didn’t work, so we shifted to building strong partnerships."

9. Service Department and Customer Retention

A robust service department is crucial for converting new construction clients into lifelong customers. Moss Heating and Cooling offers a one-year warranty and employs knowledgeable warranty specialists to ensure exceptional service. Kelly is exploring strategies to enhance customer retention, such as one-time maintenance visits to establish lasting relationships.

Notable Quote:

Kelly Roberts [36:41]: "Our goal is to convert new construction clients into our service business by building strong, ongoing relationships."

10. Advice for Aspiring Leaders

Kelly offers valuable advice for those aspiring to leadership roles in the home service industry. She emphasizes the importance of proactive problem-solving, volunteerism in tackling challenges, and maintaining a positive attitude. Kelly also highlights the significance of being direct and persistent in addressing issues to drive company improvement.

Notable Quote:

Kelly Roberts [52:10]: "When you see a problem, raise your hand and volunteer to solve it. Think through problems deeply, and people will continually promote you."

11. Kelly’s Pressure Tested Podcast

Beyond her corporate responsibilities, Kelly launched "Pressure Tested," a podcast dedicated to highlighting female leaders in the construction industry. This initiative underscores her commitment to empowering women and fostering a more inclusive environment within the trades.

Notable Quote:

Kelly Roberts [53:37]: "I wanted to create a platform to talk to and showcase the incredible women in construction, and it's been an amazing journey."

Conclusion

Kelly Roberts' story is a testament to resilience, strategic pivoting, and effective leadership in the competitive HVAC and utilities sectors. Her ability to navigate financial crises, scale operations, and build strong industry relationships offers valuable lessons for entrepreneurs and business leaders alike. Through her roles at Moss Heating and Cooling and Moss Utilities, as well as her advocacy for women in construction, Kelly exemplifies the qualities of a modern, adaptive leader driving substantial business growth.

For more insights and detailed discussions, visit www.ownedandoperated.com and follow Kelly Roberts on LinkedIn.