Mastering Profitability in HVAC with the Profit and Wealth Guru, Ruth King

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📢ALERT!📢 New Podcast in the House!

Let’s all welcome to the HVAC Financial Freedom podcast, the Profit and Wealth Guru, none other than, Ruth King! 🎊 🎉

Another insightful conversation we will listen to as Ruth King shares her advice for business owners who want to increase profits.

Tune in now into today’s episode and learn…

0:47 Introducing Ruth King

1:40 How did Ruth start in HVAC and Plumbing?

2:33 How did Ruth get the title of Profit and Wealth guru?

4:55 Starting Business Ventures

6:17 What’s the role and meaning of the business in your life?

7:46 How to coach a business owner to have some clarity and track on the business?

10:02 Stop Micromanaging!

13:03 How to find a perfect team?

16:03 Customers always write your paychecks

20:00 How should a parent run a family business?

21:18 How to become a financially fit business?

23:01 5 Ways why the numbers are wrong

25:48 Cash vs Accruals

27:19 Why emergency saving is important?

28:36 Rule of thumb when an emergency situation happens

30:19 What will you do with the excess?

31:26 Business training that Ruth offers

33:01 Profit or Wealth 2-day class: Things to check to know if your people don’t steal

38:24 How to get the fastest track on getting more profit?

43:25 Horror story!

45:46 Learn to know your numbers

46:50 How to contact Ruth King

47:50 Courses of Ruth King

📢 Connect with us!

👉 Full episode can be found here: https://poliannaseo.net/mastering-profitability-in-hvac-with-the-profit-and-wealth-guru-ruth-king/

👉 Join our FB Group: https://www.facebook.com/groups/hvacfinancialfreedom/

📢 Connect with Ruth!

🎁 To get Ruth King’s courses, it is all available on Amazon.

🌐 Contact Ruth King via email: [email protected]

📞770 729 8000

💻 http://hvacchannel.tv/

#ProfitabilityMastery #BusinessProfit #FinancialSuccess #ProfitableBusiness #ProfitGrowth #BusinessPerformance #ProfitabilityTips #BusinessStrategy #FinancialManagement #ProfitableVentures

Sponsored by: Polianna.net

Audio Transcript

Welcome to the H VAC Financial Freedom podcast, a show to help you create more revenue, profit and freedom in your life. Now, your host, John Victoria. Hello, everyone and welcome to the H VAC Financial Freedom Podcast. My name is John Victoria, your host and we are in for a treat today. So we are speaking with the profit and wealth guru herself, Miss Ruth King. And uh we got a lot of fun things to talk about for today. And so if you don't know about her, she is a serial entrepreneur and has a passion for helping small business owners over 37 years of experience.

And she's also the founder of business Ventures Corporation where she coaches and trains contractors in the plumbing and hr AC R industry to achieve their goals and to build profitable businesses. She's also the creator of H BC channel dot TV, an online platform offering resources and training for contractors looking to grow their business. And in addition to her professional accomplishments, she's an avid supporter of adult literacy and marathon and runs marathon races having run the Boston Marathon in 43 and 2005. So we're gonna bring her on. Welcome to the show, Ruth.

Thanks, Chad. I appreciate it. Yeah, super excited. So, yeah, let's kick things off. Um You know, I think the thing that folks who might not be familiar with you are curious about is, you know, first, how did you get involved in the plumbing in HVCR industry? Right? There's so many fields to get into. How did you end up in this one by accident? Like everything else happened in, I was uh in grad school and I had a couple of jobs that and a job I really hated.

Um once I got out of, out of college and I was down in Atlanta and I went back and got my MB A and met a woman who was working for service America and they needed some help. So I found a niche and then it expanded out of HVC, plumbing, electrical pool and spy, you know, basically home services. That's where it is now. That's awesome. And, and I guess another thing I'm curious about too is um how did you get the, the title, the profit and wealth guru?

Like how did that? So you started your journey? And like, how did that end up to be your title? Like the, the profit and wealth guru, I will put our numbers against anybody's numbers in the industry. We do really well. That's number one. And then when I was in, when I was in grad school, I have degrees in chemical engineering. So that's my background. And when I was in grad school, I found out I was really, really, really good at numbers and explaining numbers and helping contractors and others, you know, through numbers.

And so if you look at the history, I mean, one of the coolest things over the years has been a, a contractor and his partner who started with about $750,000 in revenue grew to about $10 million. 16 years sold the company for 9 million in cash. Oh, my gosh, bro. I mean, that's been repeated many times now. So it's, you know, if you want to be really profitable, which is what this is all about today, right? Uh We'll give everybody some of the tips that they can do and some easy to implement things that when they click off the podcast.

Not now, make sure you listen to the whole thing and then um start implementing some of them and it'll help your profitability. That's amazing. I mean, that's what it's all about too, right? You know, start off 7 to 50 K business, you know, came away with 99 million. I mean, you know, a lot of us start our businesses to make a difference in our family's lives and to build that generational wealth. And it's like, it's, it's amazing just that feeling of you helping others and really seeing that contractor build, build that life for themselves and in less than 4003 years too. Right.

You know, it's not like this is like a forever goal. Like this is, this is, this is pretty short. It's not that long. If you think about it now it's not. And, uh, one of the two partners is living between, um, up north and, and Florida and he's considering starting his rock band again. I hope he dies. He had that when he was a kid actually. Yeah, just, you know, pursuing your dreams and just rocking out. That's awesome. Um, and so I guess so, your current venture right now?

It's, it's business ventures, corporation. And, um, how did, how did that evolve in? So, since its inception? So was it, was it helping, you know, contractors with the same things or how has it changed since then? It, I started in 1981 in January of 1981. I started business ventures and it's grown since then. And it's, um, you know, the whole goal is to help contractors help small businesses, business owners who want to grow. I mean, there are lifestyle businesses out there who could care less. That's not my, you know, my market, my market is companies who are at a spec, you know, at the level, but they're either frustrated with that level.

They want to grow to the next level and they have a reason for wanting out. So, one of the first questions I asked, um, almost everybody I work with is, what's the end game? Right. We all leave our businesses. It's much better to leave our businesses the way we wanna leave them rather than it, you know, kind of leaving us. Um, I was working with a, a 46 year old contractor here, you know, probably 20 years ago now and he had a heart attack and died who expects a 46 year old to die?

You listen, his wife sold it off in a fire sale. I mean, that's not how you want to go out. You much rather go out, you know, on your terms rather than on somebody's going surprise you done. Yeah, because we're all gonna leave our business at some point. Right. 100%. I don't even need to check this out. 100% certainty. We're all gonna leave our business at some point. Yeah. Now it's better to plan the exit from your business and, and do what you want to do. And I look at businesses as a tool.

It's a tool for what it's a tool for passing it down to the next generation. It's a tool for selling it so that you have the cash to do what you want to do. A lot of people travel. A lot of people train, a lot of people teach, um, give back. I mean, there's a lot of people who now work in, you know, different areas of the world helping different people you know, a lot of church things that go on from that perspective. So, I mean, um one of my colleagues who's done very, very well is in Guatemala right now in the jungle, you know, helping them build their, you know, living facilities and not another way to describe it.

Um But really, you know, giving back those who are less fortunate for all intents and purposes. It's amazing and, and I love this pause and maybe even dive deeper into this because, you know, it sounds like clarity of vision. That's, that's, it sounds like that's absolutely key, like clear for what you want out of life. But also, you know, how you want to exit your business and how it can be a tool to really build that life that you want. Um And at least some things that I've, I've noticed with some folks or some people that are absolutely clear, like what they want to do with what they were their life and where they wanna go.

Um Let's say we're speaking to a contractor right now and you were trying to get them to think about like really clarify their business. Like what are some other things like you're gonna say, you know, what do you want to do with your business? Like, I don't know. Yeah, how can, how can we help coach them to clarify their business and, and what they might want? I usually tell them a story of some of the contractors who have sold, who are miserable because they lived, eat, breathe their business and they don't do anything else.

So if you decide to sell your business and you're doing nothing else and you can't go to the, you can't go to the office or the shop in the morning, you are miserable. You're tired. You, you know, you can't go pretty quickly after that. So I suggest, you know, they may not know what they want, especially if they're younger, you know, in their fifties probably. But I say, ok, go find something else to do now that's outside of the business and so you can start building what you wanna do and they mean, try 16 different things.

So they find the thing that they like, but at least they're doing things that are not, you know, coming to the office, working 12 hours a day and going home and doing nothing else that doesn't help you at all. So that's really where it starts. And a lot of times they don't know where they are want to do, but they start thinking about it, you know, what would you like to do? You know, what do you do when you're off time? If you could spend a weekend somewhere, where would it be?

You know, what would you be doing? You know, little things like that. I'm not asking them to go. Ok, I'm not gonna be in business in five years but start thinking about it. Yeah. And it's, I mean, and that's a given, right? Like, we all want to be free and we all, like, would we be doing the bit like what we're doing now? If we didn't need money? If so? Great? That's amazing. But many times we get into a business, we're just good at it. Um, if you know the concept of Iki guy, it's like the, it's like what you can be paid to do what the world needs, what you're good at and what the last one, it's like what the world needs, what you're good at and what you get paid for.

I forget there's another, there's another one for free. I think it is. Yes, it might be that. Yeah. And so there's like those concentric circles and the thing that you really love to do that might not necessarily be what you gotta are gonna be paid for. But, I mean, you still got to put food on the table, find that freedom. And so how do we just eliminate that? Needing to make money part? And it's by building and selling a, a business? Absolutely. Build and sell a business.

You know, and when we're in the day to day trenches, a lot of times it's like, you don't even think about where you want to be in 0003 years or five years or 15 years or 20 years, you're just so focused on where it is. But, you know, occasionally you just need to step back and get away from the business and get people in there who can, you know, if you're gone for two days they can handle it. You know, there are some business owners who call in every day and, you know, make sure everything's there and they run the business from wherever they are.

That's not the idea here. The idea is to be able to say fine, even if it's a long weekend, you know, let people, you know, you'd be surprised at how well they'd do with your money, so to speak. Yeah. And, and I, I guess that's the second step. So it's like, OK, first, we have this clarity of the vision of where we wanna go next. It's OK. I wanna grow this enterprise so that they can run without me. Um What would you say are some of the challenges um whether that's external or even internal that stops someone from really achieving that freedom of needing to always be in the field or in their business that micromanaging period, you micromanage, you can't grow, you have to learn to trust people when they make mistakes.

Obviously, as long as they're not, you know, kill the business type mistakes, they learn from them. And you've also got to have enough cash in the bank and, and there's lots of rules and suggestions with respect to how much cash you need, depending upon your risk tolerance and just, you know, decide that if you want to truly grow it, you cannot micromanage it. There will come a point in time depending upon the type of business that you have, it will be somewhere between a million and $2 million in revenue that you'll implode.

If you try to grow any further, you just can't, you cannot handle everything. It, it just does not happen. So you learn to hire people, um, when you make mistakes. Absolutely. But if you don't start, you don't try guess what you shouldn't ever get there. Yeah, I, I started working with a contractor who was about $4 million in what I call one of the levels of no man's land. It took us a couple of years to find the right management team. But once we did, they have taken that company to $30 million in revenue, the bottom.

Well, not the bad, but you know what I'm saying? So that he, he right now can do anything he wants. They had the team to run the business. So that's cool out. And so it wasn't even him. It's like it was just his role as CEO to find the right team to grow the business. That's right and, and manage the situation. Ok. They all have KPIS, they all have budgets. They all know how to read a PNL. You know, he reads the balance sheet. I mean, I taught him to read a balance sheet.

Really, really, really. Well, we know how to figure out how much, you know, you can afford to spend on this, this and this. It's one of those rules. Um, but he, he took the lessons to heart and when we started working together, he said I'm a very good student and I've heard that before but he really was a really good student. Oh, man. And, and so I, I guess the question in my mind and other folks mind. So how did he find that team? Like, was it like, how did he attract those people?

It sounds like these are, if they grew him from four or 5 million to 30 million, these, these people are eight players, these people are rock stars. They could go anywhere that they want. Why, how, how do they attract and then ma he plays them really well and the bonuses based on what the departments do are really good. OK. So yeah though, I mean, you've got golden handcuffs, I promise you. I it's also, is it like uh so like performance based like let's say you hippie certain metrics or?

Well, it's certain profitability, it's not revenue as much as it is profit and you get paid a piece of the profit of your department. Mm Love that. And, and if there are eight players, they want to grow the, you know, great, grow their take home pay. It's like I wanna grow this business as best as I can because that means I can take care of my family too and they can do what they want. Love that, which is the key. Right. Yeah. So in a way it's like everyone wins, it's like the owner wins.

Um, but also the, the management team wins because everybody else in the company also gets bonus. So the really cool part about doing what we do is everything is based on net profit per hour ID for every billable hour. How much actually drops in the bottom line in net profit. So when you start looking at it that way, everybody who, you know, who sticks around and stays on board and there are people who don't want to do that and they go by, that's fine. We'll find others.

Um, they, from the person who answers the phone to the person who is managing it other than, other than the person who owns it. Everybody is focused on the bottom line and everybody understand what it takes to make a profit and what happens when they screw up. What happens when they don't take care of a customer. And what happens when, um, they do the company does really, really, really well. And what happens when the company has some issues. I mean, a lot of times there's good years and bad years, you know, coin sort of, you know, as it ended up turned, it turned out to be pretty decent for our industries, um, for home service.

But in the beginning we did now. I mean, think about it before PPP loans were, were there and, you know, when everything was shutting down, nobody knew squat and it was like, ok, I have enough money in the bank to be able to handle whatever comes and, and that's what you need because you never ever know. You know, I hope we never have another pandemic but who knows? We don't know. Yeah, you never know. You never know what's, what's coming down the pipeline. Um Yeah, that's, yeah.

Yeah, absolutely crazy. And so, um but I love this. So it's like this, it's really this complete system. It's like top down, you know, it's based off a net profit, everyone's aligned towards the same goal. So whether, you know, I'm, I'm dispatching, whether I'm in the field or whether I'm on the management team, we all are aligned and there are, yeah, I guess each department is managing their own subset of KPIS, but all of it really just funnels to the direct KP I of, hey, what's our take on, what's our, our net profit at the end of the day?

Yeah. And everybody understands that the customer writes their paycheck. Everybody understands that. And if you screw up and you don't take care of a customer, you lose a paycheck and nobody wants to lose a paycheck. And, you know, most every time when I start working with a new, um client, I usually ask the shield, people who write your paychecks. And always I say, always, I'd say 90% of the time they say the owner or the bookkeeper or something like that, no, the person who writes your paychecks or the customers without the customers generating revenue for you, you have no paychecks and we're done your own might sign them, but the customers actually write him.

Yeah, he's, he's just a pass through you as a result of the service. Um, and you know, let's say someone doesn't have this, like, what is like when you're working with someone, like how is this process look, like, say they don't have this entire system set up and maybe their books aren't clean. Like how, how does someone get to? It sounds like it's just a, a very, an easy point of clarity. Like everyone is clear on what needs to get done. They got the KPIS. But getting to that place, if you're not already there is, I imagine is a challenge.

It's painful, very painful. Um, if you don't have inventory on your balance sheet, that is painful. You have to do it simply because if you anything you buy and goes to cost of goods sold, your profits are less than they should be. And you're, you're kidding yourself because you have inventory. I've walked in everybody's shops and I've looked in everybody's trucks and everything along those lines. I will give commercial a little pass but residential, I give no passes. Um, even commercially, you got some refrigerant, a few parks, you know, nothing major because you, you have to buy pretty much what's needed for that particular situation because it's not cookie cutter.

But you've got to have inventory. If the books are a mess, like we clean up the big rocks, then we find the stones, then we find the little rocks and then we find the Pebbles and finally where, where it needs to be, sometimes it takes a year together. They are clean. So it's, it's hard sometimes. But you have to want to do it. And if you don't wanna do it, don't waste your time, don't waste my time. Don't waste everybody's time and just do what you wanna do.

You know, as, as I say, I have very long or very short relationships with my clients. Um, my oldest client was 1987 when we started and he sold his business and I helped him sell it in December of 103. So that was a long, I mean, I'm still, I still talk to them. Um, but it was time to go. They had things that they wanted to do and valued it and sold it, which is what needed to happen and they're happy as, you know, can be. They're traveling all over the place they're doing what they want to do and they're having, you know, good luck.

Amazing and, and testament to, to you as well. I mean, that's, you know, 2030 30 years of, of working together. That's a great level of trust. You've seen them in the ups and downs, maybe even seeing a few kids and grandkids come along the way, you know, and then there's others where the kids are actually now running the business that is, you know, we're getting dad out and we're, we're, we're getting the kids so to speak, to take over and they're doing the KPIS and they're doing the financials and they're doing the things that dad used to do and dad's kind of here, but he's not if that makes sense. Yeah.

So he's, he's kind of oversight. However, the day to day decisions are made by the kids. That beautiful thing. And I mean, it, and I, I, I'm a big believer that business is one of the greatest, uh, personal development tools. And so just, you know, a father or a mother handing down the business and then having their kid go through it and learn all the things. It's, it's such a beautiful, beautiful thing and the hardest thing parents have to do is if there's one kid who's not productive and thinks the business is an entitlement.

Get that kid out. Mhm. Yeah. That's really hard. Or making the decision between two kids who's gonna run the business and who's not, that's another difficult decision, but it has to get done. Otherwise the business won't survive. You cannot have 2 50 50 equal partners. Does not work. Nobody has to be in control. Yeah. That's, yeah, especially the entire, that's a toxic, that's a toxic thing. And employees won't put up with the bill and you, you get your good managers leaving and that's not the idea here. Mhm. Wow. Oh, the, the challenges and the joys of a family business.

Uh, well, let's, uh, let's do a quick pivot. I, I know you love, um, you know, finances and getting the books down. And, um, you have this program, you mentioned, uh, we talked about before it's, you know, a financially fit business. And can you tell me more about that and like, what goes into becoming a financially fit business? Yeah. Well, number one, you have to want a big one. Ok. Number two, you want, you have to get your financial statement every month on time. If you get January statements in April, it doesn't do you any good.

The minor issues have become major crises. So good, better and different. You need your financial statements every month. Um, and the, the program, the software program itself, all you do is you enter your financial data, click a button and it will give you ratios and graphs where you are and where the trends are and things to look for if the trends are not going the right way. So to be financially fit, you've got to have a, you know, a net profit per hour that you really and truly want.

Um, you've got to have the, the growing maintenance program. I don't care what, what home service business you're in, you could have a maintenance program. Sorry, don't buy it. Um, and you've got to have the, you're building the wealth piece of it, which is the cash and what I call the, off the balance sheet, which is your customer base and maintenance base. Both are really, really important and then you have to have enough cash in the bank to survive another pandemic. Mm So that's financially fit and you make great business decisions based on the data and, and that's really what the key is.

The data is accurate. You may not like the answer but you can take care of it if you don't like the answer and yeah AAA prerequisite is like, yeah, you need those numbers and those numbers need to be accurate. Um I know one thing we talked about before was uh uh I don't know if you'd want to get into it but like looking through the books like, oh, these numbers don't look right. Um You know, I said I said that was like they need to be right first, you know, that's legitimate numbers.

Um All right, I'll tell you more about that. Yeah, I'll give you five ways that the numbers are wrong. Number one negative cash on your balance sheet. You have to have at least a penny in the bank. You can't have negative cash on your balance sheet and you can't have negative receivables on your balance sheet, which is number two and a lot of software packages don't allow you to do deposits or you have to set up deposits when you get deposits on jobs and they just immediately put it to receivables.

But since you haven't billed, you have a negative receivable and that's what happens. You need deposits on your, on your balance sheet. Um So those would be two, number three would be no inventory on your balance sheet for companies who have inventories and there's some who don't legitimately um, their suppliers had manage all their entire inventory and everything else like that. So the only inventory is generally on their trucks which is fine. Um But there's still little and then that would be number three, number four would be that a balance sheet doesn't balance ie acids are not equal to liabilities that worth number five would be that there's no rent or there's double rent.

There could be negative payroll taxes payable, which I mean, I've seen negative garnishments. Ok. Look, I promise you whatever county you are sending a check to on behalf of an employee, they don't owe you nothing. I promise you that doesn't, that doesn't go on. Um Then you have to make sure that the balance that's on your aged receivables list matches the balance on your balance sheet. And the balance on the age payable list match the balance on the balance sheet. So you have to do both of those two things and you have to look at the net profit off your PNL and make sure it balances your, your year to date net income. Right.

That's really fast. And I know that's really fast. But those would be the places that I would start and then we have to make sure that we don't have apples and oranges. All right, we do not want financial statement from and you find financial statement, food salad. If your gross margins ie gross profit divided by revenue, it's not constant. So what happens is you have revenue in one month and let's call that the apples month and the expenses, the labor materials or part of the labor part of the materials are in another month.

And so when the job cost, you have the apple month, which is your revenue month and you have the orange month or the peach month in Georgia not matching. And when you put them together, you have fruit salad, you want revenues matching expenses in every single month. And that's the best way to know that you don't have financial state and fruit salad. It's also the way to find somebody who's stealing from you too. The margins are well known. And, uh, and I, I guess maybe it's just a quick question.

So, uh, like cash versus accrue, are you saying like, you should be doing like a cruel type accounting? Ok, pay your taxes on a cash basis, but you will almost always be profitable on a cruel basis. I mean, excuse me on a cash basis because cash is uh, revenue a sale is considered a sale when you actually get the money in the door and the expense is considered an expense and you write the check. So are you gonna bounce checks knowingly? No, you know, II I was sitting in a meeting one day and it said, you know, but some of our guys do and I'm like, that's not cool.

That's not cool. So from that perspective, uh it always should be a cruel. That's the only way because you have receivables and payables and inventory on a cash basis. There are no receivables and there are no payables. So if you wanna, if you want to um file your taxes on a cash basis, that's between you and your CPA. But all of your work, day to day operational work needs to be on the, on a cruel. Ok. Got it. And when quick books all you gotta do is one little thing to say a cruel.

It's not hard. Yeah, not hard at all. One button. That's it. I love that. Um That's perfect. Um Yeah, that, that could really make a play a diff a different role how you're categorizing it. Um And then another follow up question. So you mentioned it, it sounded like earlier you were talking about emergency savings in terms of having enough cash savings for a pandemic? Like, what's your rule of thumb? Are you thinking, like, six months, three months, 12 months, or? Because you're, you're, you're balancing, like, wanting to invest in the business with having your note to protect you?

Like, what would your, your rule of thumb be? All right. So, it doesn't have to be the pandemic. I had a, um, a contractor who had $800,000 in the bank and they said, yeah, no, that's too much. That's too much. That's too much. And he got soon they eventually won, took three years and $700,1.73. All right. He didn't have the 800,000. What would happen? He'd be stressed out beyond belief because he had to run the business. At least he had the cash, you know, he was stressed out enough, but at least he had the cash to be paid for really, really good legal advice and everything eventually prevailed.

So, it's not necessarily pandemic. It could be, you know, something like that. It could be a major supplier or, um, I had a situation where a contractor was really profitable about a $10 million contract or three of his G CS went and filed bankruptcy the same week leaving him in the bag for a million dollars in receivables. Took him back, took him back too. All right. So it's not only, you know, pandemic, it's stuff like that, you know, you know, so my rule of thumb is this, all right.

Take your highest payroll month, including payroll payroll taxes, everybody's payroll and take your highest overhead month, which are usually the same. Um, and then multiply somewhere between three and six. Ok. All right. Now, if you are totally risk averse if you want 12, be my guess, but generally you can deal with three if you have, if you have savings for maintenance or something along those lines, it just makes it, you know, a little bit easier, but always try to have somewhere between three and six months of operating expenses, liquid of some way, shape or form, you know, don't have to be in a bank savings account because what are we getting like 1/10 of 1% these days?

But, you know, there are, there are some things that are still, there's some C DS now that are around five. you know, so those are the types of things that you can do now. Um, and they're still fairly liquid. If you had to get your money out, you could, you just lose the interest on the CD, you know, so you might, you know, get some other, I'm not a financial advisor. So go all right. But, you know, 1/10 of 4003% of interest is just not my thing. No losing money.

I mean, you can't keep up with inflation at that point. You're losing money. Ok. So 3 to 6 months. Um, and then, yeah, you're kind of just taking the highest, um, you know, the highest point for, um, kind of like, uh, like payroll. And then there was like more materials based. So it's like you have the highest possible average and then multiplying that times the 3 to 6. Um, ok. And then what do you do with the excess? Are you like, is that just like growth money or how would you just, I mean, you can have more than that, you know, it's, uh, I mean, the most I've ever, when I always tell contractors to put their maintenance agreement money away and just put it in a savings account, especially if you don't need to use it for your operation.

The fastest I've ever seen somebody put money away is $1.7 million in five years. All right now, not all of that. It's in a bank account right now for obvious reasons. But you know, that, you know, think about, you know, the 1.7 being your net thing at some point in time when somebody buys the business that 1.7 be, you know, could become yours. You, you negotiate that I take all the cash or you leave only a certain amount of cash in there. Mm. So, yeah. Wow, that's fun. Yeah. So nest egg plus, uh, what they pay you for the proceeds of the business?

Oh, amazing. Oh, my gosh. That's awesome. Awesome. And, uh, so I guess, uh, moving on. So you do a lot of different business trainings. But, um, what are, what's the scope of all of them that you offer, um, helping contractors improve their skills? Normally, most of the ones I do now are financially oriented. I still do a dispatcher class and that's all online now. And then managers, I'll do managers training, um, for service managers and field managers and people who actually have a bottom line responsibility as well as owners.

Um I do a class called building Profit and Wealth and it's a day on P and LS a day on balance sheets and it's two days of intensive training on financials. And then I have a bookkeeping because I got man one summer. Um I won't use the terminology I actually used, it was like I was getting asked the same questions all the time as that's it. I'm writing a course. So I have 18 modules that takes the contract bookkeeping from. All right, technician Gus Mrs Jones. And the invoice is this all the way through taking you through A P and L on the balance sheet.

And it's in English, it's not an accounting babble. So, you know, there's homework, look at, there's videos, there's manual. I mean, you, you can watch, you can do it either and there's homework with each one. And then I've written a lot of books. Um, the, the nearest one is 100 and one dumb financial mistakes, business owners make, which will come out in September. Oh, awesome. Yeah, let us something that comes out so we can promote it. I do that. Yeah. And then the courage to be profitable, which is the Bible in terms of understanding p and, and balance sheets and net profit per hour.

And then let's see what else they, um, profit, their wealth, they, the bad cash. And that one's fun. That one's actually my least. I don't want to say favorite, but I want to say the people bought that book the least out of all of them because nobody believes it will happen to them until it does. You know, prevention doesn't work really well. You got to get diabetes in order for you to start doing something about it. Yeah, it's absolutely crazy. You know, it's funny because I had an, I had an owner sit in profit or, well, the two day class and to go through the class and did well in the class and the second day of that class I talk about, you know, here are 23 things to put in place to make sure your bookkeepers don't steal or whomever is stealing whatever else it is.

You know, keep the honest people honest, so to speak. And so I get an email from him about now, I'd say eight months later, nine months later and he goes, I think there's something going on with my bookkeeper. Will you help me and I'm, of course, and, and we get on the phone and he goes, you know, I sat through a year class thinking this would never ever happen to me and it did. So, if you think it's not gonna happen to you, you've got blinders on.

Yeah, you don't put the procedures in place. It is likely to happen to you. Unfortunately, pay attention, your cat and the easiest way to pay attention is to look at your bank statements online every day. How long does that take? Five minutes? Maybe, maybe five minutes. Yeah. Yeah. I mean, you can see what checks went, what ach s went if something looks strange on your, you know, on your bank statement or bank account or something along those lines. Um, one of my contractors I work with, had his bookkeeper doing it and he noticed like a, a two cent deposit in the, you know, whatever the other, you know, less than a dollar deposit.

He said, oh, the owner starting, you know, doing a new account and he just did tell me then called the next day and said, um, did you authorize 2 $25,000 withdrawals out of your account? No. And so they shut the account down. That was just finding out whether the account was real. Oh, my gosh. Is a verification. Like amount two cents. Wow. So look at it. You just never know what's there. And it, it may not be your people stealing. I had a, an auto mechanic, not the mechanic himself, but somebody who worked with him, change a check from like 40 some odd dollars to 440 some odd dollars.

He, they stole the 400 went down to the bank and they got their money back because they proved that it was there. And I, I assume the bank went after them. But can you mention the conversation to the owner of that? Uh, yeah, something stealing and they are stealing from you. They're stealing from me and this is what happened. You know, I was like, oh, that's a thing. Yeah. Oh, all day if you want. Yeah, you, well, folks need to protect themselves, right? You know, it's like you never, like you said, you, no one expects it to happen to you, but, you know, you gotta protect yourself.

Um, you know, to put the, you know, the rosy colored goggles on and think nothing ever will that will happen. And that five minutes a day looks at your bank account. Yeah, it's like stretching your teeth. Takes less time to look at this than brush your teeth. Oh, man, I love that. So, yeah, that's a takeaway for everyone. Um, habit, daily habit, just check your bank statements or no, sorry, check your bank accounts and just look at them every single day, every single day. Just all of them, your savings account, your operating accounts, all of them, you know.

Uh, there was uh, yeah, I, I say if nuns can steal, anybody can steal. So about three years ago, three nuns stole money from a diocese school. Go to Las Vegas and gamble. Oh, my God. Sorry. We hit the national news. Oh, my. How they did it? There were two operating accounts. One of which everybody had forgotten about that. Um, same name basically. You know, most of the checks went into the one that they used and every once in a while a check would go into this one and they didn't find out about it until the administration changed and they did audit and I, and I thought the Catholic church had buried it because it got hushed pretty quick and a couple of months ago they were indicted.

Ok. Good. So, if mans can steal, I'm sorry, anybody can steal. I mean, they're supposed to be above approach. Right. Yeah, it sounds like that's supposed to be not, that's not real. That a start to a joke, you know, google it and find out now. It's crazy. Yeah. Oh, my gosh. Well, I hope, hope the time they had was worth it now, now they're going away. Gosh, that's, that's crazy. Um, well, here's the question for you. So you have a number of books, courses. Um, you know, 12 day programs.

If someone wanted to go the fastest point A to point B, hey, I'm in a million. I would go to five. Like, what, what would you recommend that they do to get the fastest to get from 1 to 5 working with you? Like, what, what books or how should they work with you like? What would that look like? All right. First of all, to go from 40003 to 5 million, that's an additional $4 million. You need $400,2400 in cash. Where is that coming from? Hm. That's the first question. Um, 2000 to 210 is not a big deal, you know, $21.7,2400 in cash, not, it's easier than $22,303 in cash.

So we have to know where the cash is coming from for growth for starters. And, you know, that's there. I have an operations manual that's residential, one, commercial one, plumbing one, you name it and it's, you know, 230 pages. Thumb drive though. I couldn't shoot everything in the manual on how to do this. It's not, I mean, it's tedious because you got to find the right people to go to 2770729 million. You have to find the management team. It's not an option and sometimes that's really hard to do.

Um, and generally the people who got you to the 28000 million or got you to like two won't take you to five. And that's really hard because people, unfortunately reach their level of incompetence. You know, it's Peter Principal and they're really, really good when you were two. But they're really, really bad when you're five and firing your oldest employee is incredibly hard. It's really, really, really hard. So you have to realize in order for the business to grow, you have to have a really good reason why number one put the plan in place and I can help you put the plan in place.

It's not a problem. Um But you've got to be able to implement it and do it. And that's a lot of times where I come in and it's like monthly financials, I get you have monthly phone calls, you know, are you where your goals that you wanted to be at? How's this going? How's this going? And so we do that and then at the end of that year, we look at it and we say, ok, we're going to be next year. This is what the overall goal is.

I'll give you an example. I just had a conversation with one of my clients today in four months, they're half a million dollars over budget in revenue and profit both. And I said to them, I said, ok, do we want off the budget or you, you know, I'm willing to lean the budget the same way it is, but I can't have you sluff around, you know, and I don't have to worry about it. I'm making budget for the rest of the year and they go, no, we'll continue.

Um We want to do Xy and Z and I'm not gonna tell you what Xy and Z are, but that's really good reasons to keep going that much over budget. So, you know, sometimes there are reasons for it and that's ok. You just have to recognize that those reasons are there and you have to realize that. Ok, we want to continue doing that for these reasons. Hm. Got it. And, and just one clarifying question you said, um you said growing to the ones with five, you said 500,000.

So that's the 10%. You're saying the growth budget is 10% of where you wanna go, right? And that's a growth budget. It's 10% of where you are now to where you wanna go. So there are a million now. They want to grow to five, they need $400,7707400 which is an an additional 4 million and 10% of the 4 million is 400,000. Ok, got it. You're already a million. Yep. Got it. So where you wanna go minus where you're at that delta, 10% of that, that's your growth budget that you need. If you don't have that then.

Ok, we gotta have some kind of feature. Yeah. How are we gonna get that? Do we need financing? You know, what are, you know, generally you can do it through a maintenance agreements, the maintenance agreement revenue and keeping that in your savings account. Remember that one contractor who put away $1.7 million in five years. I mean, if you wanted to grow, you know, another 400 you know. Yeah, you got it. Oh, that's awesome. Ok. That makes a lot of sense. Um, that makes a lot of sense. Ok. Cool.

And, and I, and I guess that's, um, and I guess that some owners will have to, you know, split with you. Oh. Do I want to keep all this profit or do I want to reinvest it back in my business? It's like, it's, it can be a tough conversation with themselves, you know? Do you, are, you are your own? So, if, if you want to piss me off, excuse me for saying that way, take money out of your savings account and buy a boat. Oh, that's not part of the plan.

The boat was, it wasn't. I've had that happen a few times. Oh, my gosh. We have did. Well, we have lots of money in our savings account. Yeah. Oh, my gosh. Um, awesome. Well, uh, any other stories you want to share of, like, contractors who you've grown and have, like, really built these amazing lies that you could share with everyone. Well, I'd rather share another horror story. Sure. I, I love those and, and this is something that everybody has to pay attention to because in the field, especially with residential home services, everything's cod. Right?

So you have the swiper in the field and you um, get paid and it goes supposedly in your bank account. Right. So this tech, I have no idea why he thought we wouldn't catch it. But, you know, sometimes they don't think really well, um, gotta swear, put it in the company name and his bank account and all you need is your federal ID number and then everybody's W-2 at the end of the year is you, is the company's federal ID numbers. So he did it and the owner, you know, we look at the weekly cash flow report every week and there's the receivables and the payables balance behind it.

And he saw some residential company customers who supposedly had balances, which didn't make sense. So we called them all on the phone and he said, um, wanna make sure everything's going, you know, the service call was well and their systems are doing well and you know the Oh yeah, everything's great. Did you happen to pay the bill? Now? He didn't say why didn't you pay the bill? He said, did you happen to pay the technician? He Oh, yeah, we paid by credit card. Would you mind sending me a copy of the receipt?

No problem. So he gets all these receipts in company name wrong checking account. Oh, wow. The guy went to jail on seven federal counts including uh you know, the of identity, right? Yeah, the list was long, I don't remember what it is right now for $4000. Why are the world? I mean, is it worth it? He probably thought we didn't catch, wouldn't catch it. But if you, again, if you put the procedures in place you, you know, you'll be able to see these kind of things and just be careful when you take payments in the field that you make sure that the payments go into your checking account and not somebody else's or the checks go into your account, checking accounts rather than someone else's.

Um, there's been times the checks have gone to the ATM S and deposited checks, the banks just did it even though they said they went to the company, but they put them in their own personal account. So just be careful. So if you know, once you're careful and, and let's, let's end on that very positive note. Ok. The thing is, you know, if you know your numbers, you'll end up learning to love your numbers. And this sounds really crazy, but a lot of my clients can't wait to get their numbers now.

Um, to see it's a scorecard. How are we doing on our scorecard? And once you've got that and you've built the business and you know why you're building the business and you've got the freedom. You have groups, you have a great management team running the business for you. They're paid well, they're taken care of really, really, well, you have the freedom to do what you wanna do and nobody can tell you what that is. You have to decide what you really truly want to do, but you can do it and your business is a tool to get there.

That, that's the dream. It's just, you know, it's, and it's, you didn't mention a lot of things, right? You said it in like 30 seconds and so it's like not crazy. I mean, there's gonna be work that everyone has to do. But um if you're passionate, you really want it done. Um You know, work with people that can help you get there and it's just a matter of time really. It's a matter of time and doing the right things. Yep. And we're getting through the tough times. We all have them. Yeah. Awesome.

And uh so I guess before we hop off, how can folks get into contact with you? Like, what would be a great way? Would it be through the website? Some email uh email is R King Rkinj for Ruth King at on the ribbon dot com, O nta Gribbon dot com. And before you ask where that came from, say HB ac, you know, many, many years ago, ribbon was a uh platform where we had all of our different websites and they all fed that platform. So the ribbon was, was what we used to tie all the websites together.

So that's where they came from and I never, you know, used another one per se. Um So that's good, uh, office number 770729, 8000. If you want to call me, I, uh, I'm not here a lot but I will, I do return my phone calls because I'm on the road working with contractors a lot. So cool. But thank you. I appreciate it. And, and to find your courses, like, how will they find it, uh, the website? And can they go on Amazon to buy the books or Amazon? You can buy the books?

All the books are on Amazon. Um, the courses are all on HV AC channel dot TV. And there's some, there's courses there that are not HV AC related, there's plumbing ones and stuff like that. I just didn't bother putting together another website. They're all there. So, all the books are there, all the courses are there, all the, the classes are there, all the manuals are there, there's a soft skills library. There's lots of things on there for contractors. It's awesome. Yeah, definitely. And we'll also put in the show nets.

So, for anyone, uh, you can catch it, we'll put in the show nets, make sure you get it. Um, but yeah, I guess with that, you know, Ruth, thank you so much. Like this is fun. Like there's the, the good and also it's like, what are some of the shadowy thing you gotta watch out for? Right. You know, it, you don't think it's gonna happen to you, but you know, that's exactly the person is gonna have it to. Well, Murphy's law. So, um, see that everyone check out, make sure to check out H BC channel dot TV. Explore the different resources, reach out to Ruth.

Um, absolutely amazing. Some of the stories, the contractors that you've helped go. I mean, really build generational wealth in their family and that's, that's really what it's all about and really making a difference in your loved ones lives. So, with that, thank you, everyone to tune in. Appreciate you. We'll catch you in the next episode. And, um, yeah, hope you enjoyed and take care everyone. Thank you for joining us for the H VAC Financial Freedom podcast. Follow us on Stream Yard Apple podcast, Spotify, Amazon Music and check out our main website www dot H vac financial freedom dot com to find out how you can also achieve financial freedom.

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