After a brief discussion about Tall Paul’s striking resemblance to a young Bob Saget, the crew gets down to business with special guest Ken Goodrich, CEO of Goettl, co-author of The E-Myth HVAC Contractor: Why Most HVAC Companies Don’t Work and What To Do About It, and legend in the HVAC industry.
Ken started like many in the HVAC/plumbing/electrical trade—holding a flashlight for his dad at 10 years old. As his father grew an HVAC company from the ground up, Ken worked alongside him after school, at nights, on the weekends, and each summer, gaining valuable experience at a young age. Before he could drive a car, he could install an air conditioner! On the same day he got his driver’s license at 16, Ken had 3 service calls waiting for him. After his father’s untimely passing, Ken bought and took over the business.
Ken thought his life was going to be like an MTV rap video, and it certainly started off in in the right direction. Sales-savvy and full of ambition, he quickly grew his father’s business from $200,000/year to a million-dollar company in the late 1980’s, all before the age of 30. He had a new car, some employees, and life was going great—until the IRS showed up on his doorstep to let him know he hadn’t been paying his payroll taxes. Ken’s response: “What’s payroll taxes”?
Ken lost everything, as the IRS took his trucks, the bank accounts, and all but two of his technicians quit. With only $3,000 in emergency cash tucked away, Ken had to start over. No vendors would sell to him as his checks had bounced all over the place, so Ken set off on one job at a time, slowly using that cash to work his way back to his feet and pay off his debts to the IRS. It took a few years, but he wasn’t going to let this setback stop him, and he eventually cleaned his slate with the state.
During this trying period of his life, Ken discovered a book by Michael Gerber titled The E-Myth: Why Most Business Don’t Work and What To Do About It, and wondered how a stranger could know about all of his dumb mistakes before he made them. He stayed up all night reading the book cover to cover, trying to understand how Michael Gerber had a seemingly supernatural understanding of Ken’s missteps despite never having met him. Ken kept that book in his back pocket, reading it over and over while he worked long hours to climb himself out of the hole he was in.
The key takeaway Ken received from the book was while he was an HVAC expert, he was inexperienced as a business owner. These are two completely different skills! Ken started to focus more on figuring out how to run a business, and it paid off. He started with small things, like implementing opening and closing procedural checklists for his manager to oversee to prevent him from being that “meddling boss”, and allow him to focus on more important matters.
As time progressed, Ken began to see the fruits of his labor. He mended the relationships with his vendors, started to rebuild a crew, and advertised his business a little. After a few years, Ken grew his business to be the dominant residential HVAC contractor in Las Vegas.
The years of failures and navigating through tough spaces in the HVAC industry had made Ken a sort of expert on turning the ship around, so to say, and he began buying up retiring or failing businesses and implementing his systems to turn them around.
In the over 100 failing businesses Ken has acquired, one thing he’s noticed as a trend is the fear of change. It’s understandable why this is case, of course, as it takes a huge step of humility to admit when we aren’t making the mark. Real leaders, however, have the ability to recognize their shortcomings, and find a way to adjust for them to the benefit of themselves, their business, their family, and everyone involved. This is as simple as embracing change, and accepting help from those who excel at the things you aren’t a natural at!
It’s easier said than done, but when faced with either running a company into the ground or accepting that you aren’t perfect, it’s hard to see the downside to being open to trying something new.
Per the advice in Gerber’s book, Ken runs a very metrics-focused business. Everything and everyone is measured, and it can be difficult for those coming from an environment with no accountability to adjust. This isn’t for everyone, but it’s clear to Ken that those who embrace his system always do better in the long run. By operating his business with a culture of transparency, clear metrics, and effective communication, Ken’s found a successful formula that has earned the trust of his employees and customers.
It’s here! To The Point is finally launched, and we’re excited to have you along for the ride. We have some exciting guests to announce in the future, and our first conversation with Ken Goodrich is a great foundation for what you can expect moving forward. We hope you enjoy what we’re doing, and appreciate you listening!
There’s a whole lot more about Ken and the wisdom of his experiences in the audio, and we know you’ll find something useful from his story. We also recommend grabbing a copy of the book he’s co-authored with Michael Gerber, The E-Myth HVAC Contractor: Why Most HVAC Companies Don’t Work and What To Do About It, where he and Gerber take an in-depth dive into the culture of a winning HVAC business.