Roof Insight Show: Chad Muth of Muth & Co. – Episode 1

roof-insight-show-titleChad Muth of Muth & Company - 

From laughed out of the office to …
being asked for a job by his old boss.

chad-muth-and-companyChad Muth, a successful roofing contractor from Columbus, Ohio, talks about how his boss laughed him out of the office — and then a few years later, asked him for a job. He also discusses the lowest point of his business — and how it helped him grow bigger and better. We hear what happened when two of his guys went around to his customers and tried undercut him. Finally, he reveals a number of tips, including the importance of making a business plan, being open with your employees, and how to make roofing repairs work for your business.

Read the interview — or read along with the audio.

ROD:
Hey, It is indeed the Roof Insight Show. I’m Rod Menzel, and I’m a real-live roofing contractor, based in Southern California.

STEVE:
I’m Steve Wein. I’m a computer guy here in Southern California, too, and I work specifically with the roofing industry.

ROD:
As it says in the intro there, the point of this show is to help roofing contractors. This is a great industry — with its fair share of challenges — and we believe that we can work together and improve everything across the board. We think that roofing contractors can be the ones in the driver’s seat — and that will serve both them and the customers extremely well.

STEVE:
Yep. And today we’re real excited, because we’ve got a great guest on the show. His name is Chad Muth, a successful roofing contractor out of Columbus, Ohio. Chad’s been running his company for about twenty-two years.

ROD:
You know, I think there are a lot of cool things that Chad has to say here. For instance, Chad will tell us about his absolute lowest experience in the business — and what he learned from it.

STEVE:
Yeah, and we’ll hear about some employees of Chad’s who went behind his back and tried to start their own operation using his customers.

ROD:
Not cool at all. There are just a lot of good things here. He talks about how he was laughed at on his first job, he talks about the importance of having a good business plan, about being open with your employees…

STEVE:
He also shares some cool ideas on his company’s repair department, and how to make that aspect of your business bring in more revenue.

ROD:
Before we get into the interview, we should say that this show is sponsored by Roof Chief, the software that Steve and I developed to help roofing contractors. It’s designed to help you run your business from a customer’s first call to the job close-out. Or, as we like to say, from “ring ring to cha-ching.”

STEVE:
Yep. You can learn more about how it can help you and your business by going to roofchief.com.

ROD:
And now, let’s talk to Chad Muth, a successful roofer from Columbus, Ohio.

ROD:
Thank you for joining us here, we’re real excited to have you on the show.

CHAD:
Thank you. I appreciate the opportunity.

ROD:
First of all, if you wouldn’t mind telling me a little bit about yourself and name of your company and how you got started.

CHAD:
Well, obviously, Chad Muth. Muth and Company Roofing out of Columbus, Ohio is our company. And I got started in 1992. One of the things that I wanted to do was work outdoors, and I went to college for a few years and took Business and Accounting, and I had done a lot of that growing up, and I was just kind of — at that point my life — I was tired of bringing my work home with me, so to speak. You know, when you do taxes or you do things like that, your are constantly coming home and your brain is just firing on all cylinders, so I started working for different landscape companies and things like that, and I landed a job opportunity at a country club, helping them build the country club. I was on the build staff, and when we got done building it, it was late December/mid-December and they laid me off with the intention of bringing us back in the spring as full-time employees.

In the meantime, I worked for a buddy prepping and walls for flashing details, things like that just to make money over the winter until my full-time job kicked out. After about three months of doing it — December, January, February, and into March — I decided this is kind of cool, I like it’s an interesting industry, I get to work outdoors all the time. I don’t have to bring my work home with me, and I thought, “What a perfect job. If somebody that comes in and does it right could have a very lucrative future.” So I decided to call the company that I was supposed to start my full-time job with and asked them if I can have the summer to think about it and told him that I wanted to pursue this roofing thing and see how it turns out.

STEVE:
You told us why roofing appealed to you — what about yourself made you think that you could have a go at it and be successful?

CHAD:
Well, back in 1992 — and probably before that, at least in the Columbus market — it was kind of like the wild, wild West. There was no rhyme or reason for why companies started and got going on and then left. There was no standards as far as, you know, “we want to do a system: ABCD felts and ice guards and drip edge and shingles” and “This is how much ventilation you need and this is why you need it.” Everybody just kind of was willy-nilly and everybody kind of did it their own way. Some people put vents up, some people didn’t put any vents on, some people used power vents, some guys only worked until noon when the bars opened. And I kind of looked around and I thought, “Wow. If somebody comes into this industry, and they do it right, they have integrity, they develop a system, they follow a program, and they show a customer the true value and importance of the roofing system, they could accelerate and just explode in this industry. And I think that’s kind of what motivated me when I look at the industry as a whole. I thought, “Wow! It’s a blank slate, and I can paint whatever I want on it.” And that’s kind of what intrigued me about the whole thing.

The guy that I had started roofing with — that hired me over the wintertime to labor for him — had a company with the with the name, and it was a budding company. And I looked at his company and I thought, “You know, it’s not bad. It could be improved and there’s a lot of ways to do it,” and one of my dreams was, I guess, at that time frame, was to actually go into startup companies and try put together business plans for them. Five-year business plans for them, and create an opportunity for those companies to grow. And I thought, “Maybe I’ll pitch this to this guy, and if it’s successful and it works, then I’ll use that as my template to go to other companies — not necessarily roofing, but drywall or painting or landscaping.” It didn’t matter. I mean, business at that time — in my mind — business was business, and if you have a good plan you can accelerate in it, so that was kind of my motivation for getting started.

ROD:
And how old were you when you were writing this plan?

CHAD:
Around 19, 20 years old. Probably 20 when I actually wrote the plan. I was blessed — I got to create and start things at a very young age.

STEVE:
And so did you make that 5-year plan? And did you show it to the guy for whom you were working?

CHAD:
Actually, I did. I went home I my brain started flying. I jotted everything down on paper I came up with kind of an idea of how to how to go about it, and then I revised it over a few days and I came up with this — what I felt was an incredible idea.

I took it to the guy, and I said, “Look this is what I have for you. I’m willing to come on, look at your books, look at where you’re at right now, and I want to have a piece of it as it grows, but this is what I’m willing to do for you. I can help you with payroll, I can help you create a structure and a format for tearing off and installing the roofs.”

I laid it all out for him, you know, “This is how were going to do it, this is how it grow this is how we’re going to add crews to what we have going,” and I said, “I think in over the next five years, I can double — probably triple — your business.”

And he laughed at me. “You’re an idiot — this isn’t what I want. This is stupid. You know, it’s never going to work that way. You can’t have all these expenses and increases, because it’s not worth it.”

And I tried to explain to him, “Look, as you grow, you are to have some initial expenses, but we can offset it with the income that is coming in, and we can generate more income in the future, which will benefit both of us.

I mean, you’ll make a lot more money, I’ll have an ability to make more money. “You just have to you trust the plan, trust the idea and move forward with it. We can modify it once we see how it works in the real world.”

And he basically told me, “Go away, little boy. You don’t know what you’re talking about. “So in my depressed, kicked manner I went to my mom and I showed it to her. And my mom’s an accountant and a business professional.

So I brought it to her, and she’s pretty smart lady, and I said, “What did I do wrong?” and I showed it to her.

She was like, “Wow. That’s a fabulous business plan. Why don’t you start roofing company?”

And I was like, “I have no desire to start a roofing company. I want to take this guy’s company to the next level. He’s already done the hard work and kind of developed a name, and he’s got things going for him. I just want to know what I did wrong to make this guy laugh at me, basically.”

And my mom said, “This is what I want to do. What you need to do next is you need to go home, and you need to develop a budget of what you would need, how much money you would need, or how you would how you would get a start-up company going from scratch, because that might help develop this business plan that you have.”

And so I went home and I developed this whole budget of what we needed to start a company, and how much it would cost to buy the equipment and what equipment — a list of equipment we’d need, and we need a pick-up truck and we need this and that. Nails and compressors and generators and nail guns and hoses and tear-off shovels and scoop shovels and — you know — all the stuff that you need to start up a kind of a two-man operation type thing or three-, four-man operation just a small company, and I developed all that I brought it to her.

I showed it to her and she said, “See, you could start a company. You’ve already got the game plan of how to start it up and how to grow it. And you’ve got a five-year plan,” and she said, “I’ll tell you what, I’ll loan you the money at 8.9% interest.”

This is my mother we’re talking about. I said, “8.9 percent? How do you sleep at night?”

She said, “Well, that’s what my investments are making for me right now, and if you want to borrow the money, you got to pay me what I’m making if I left it where the money’s at.”

It wasn’t a lot — it was like $3,800 or something like that. We wrote up a contract, and I agreed to borrow the $3,800 from my mom at 8.9% under the regulation or the rule that I could pay it back as quickly as I wanted and everything I paid with directly towards principal and reduced my interest, because I had done some calculations on it, and I figured that I could have it paid back about eight months.

We agreed to it, she borrowed me the money. I went out and bought all my start-up equipment I needed. I hired a couple of guys and started my company and that was — when all that came together it was probably about August or September of 1992 when I kind of finalized everything.

And actually, the first two employees that I hired came up with the name. We were sitting around — this is kind of funny — we are being roofers. We were sitting around drinking beers one night, hanging out on five-gallon buckets, picking nails. We used to pick a lot of nails off of new construction job sites and stuff and then we would separate them into buckets all the different size nails, and that’s how we got our nails. So I bought a three-foot magnet on wheels, and we’d go around all the new construction sites at the end of the day and we’d run our magnet and just dump everything in a bucket, and we’d separate them when we’d get back to the house.

So we were trying to come up with names. Keep in mind, guys, this was like 1992, so the guys are like, “We should be Guns and Hoses, man!” And another guy said that we should be the Friendly Roofers, like “Caspar the Friendly Ghost.” We could be the Friendly Roofers, you know. At one point in time, one of the guys said, “You’re Muth and we’re the company, so why don’t we call ourselves Muth and Company Roofing?”

And we were like, “Wow! That’s brilliant.” So we named it Muth and Company Roofing, because I was Muth and they were the company, and we do roofing. And we felt like that was pretty good description of who we are and — bing boom bang — there we go. We were off and running.

ROD:
If I can interject real quick, what I get a kick out of your story is, it seems like it was your numbers, your understanding of finances — and your mom confirming that — that helped you kind of connect with a vision. And then it was your understanding of numbers that says, “Hey, if we can save on the nails,” and it’s probably still your understanding of numbers and finances that really drives so much your business.

CHAD:
Yeah. I think you’re exactly right. I think the biggest thing that I’ve learned and I’ve watched and observed, is there are some phenomenal roofers out there that have no clue how to run a business. I don’t think the roofers fail because they’re stupid per se because you need — you know the difference between doctors — are really, really good at doctoring. They’re not so good at running their businesses. That’s why they hire business managers, and they hire people to run their businesses. The problem is a roofer can’t see the — or understand how the process works from start to finish, so they think, you know, “As a roofer, I’m going to have to try to do my own billing and do my own collections and do my own accounting, and do my own — my own, my own, my own — and then what ends up happening is they get overwhelmed with doing things they know very little — or is very difficult for them — which is the accounting side of it and, they kind of lose focus on the roofing side. Or they spend a lot of time on the roofing side, and they lose focus of the accounting side, the business side of it. And that’s generally how they fail.

STEVE:
So you got the loan from your mom and how did you take that and start? How did you start getting customers building a business?

CHAD:
I mean, I did some roofing for the guy that I started working with, but because I was like in employee of his first and then I became a subcontractor, he wanted to pay me as if I was still an employee. So his wages were really low. He didn’t want to pay — because he didn’t see the vision of, “Hey, I’m adding another crew to you, so that’s bonus work, if you will. So you can pay me a little more than your hourly guys because you’re getting more roofs done and you’re making more money in the long run.”

He looked at it as, “If I pay you more, I lose money.” So he didn’t really get it. He didn’t understand the numbers game. So I didn’t do a whole lot for him, because he always wanted to fight and argue with me over money.

And I was like, “Look, you don’t understand. I’m adding more crews. The business plan I’m incorporating for Muth and Company is the same business plan I tried to show you. When you add more people, and you do more projects, you can make a little bit less money because in the overall scheme of things, you’re making more, and when you look at percentages — a percentage is a percentage. It doesn’t lie. A dollar can lie to you. One dollar on a million-dollar job is not nearly as powerful and as potent as five dollars. But when you look at percentages, percentages don’t lie. Because a percentage is percentage. It always is the same, no matter how you slice it, right?

So from there, I had a couple buddies who had worked for some other construction companies. I got another one, I went over to him, they had some problems with their roofer where they were having some leaks and issues, and they said, “If you can fix all these leaks and collect the check from this customer and make them happy, we’ll hire you as our roofer.”

So I went out, and I fixed all the lady’s leaks. And it turned out that she had some drywall damage that she need painted and drywalled. One of the guys that worked for me used be a drywaller, so he fixed her ceilings while I fixed the roof. And we collected the check and we made her super happy, and we brought it back to the company and gave it to them. And so they hired us as their roofer.

From there, we just started — I just did like you do old-fashioned, I banged on people’s doors. I went after remodelers. RJ Landis was a big remodel guy that did room additions and stuff and I said, “Hey, I want to be your roofer.” Columbus Home Services was another guy that I had a long, long relationship with. Another remodel guy. He did mail mostly kitchens and baths, but he would do some more extensive stuff, and by me being able to reach out to him he was able to start selling roofing. And I worked with him real closely to develop a roofing program, so I could do all his roofs. So he basically was the salesman. RJ Landis became a salesman, in a sense. I don’t think they realized they were selling for me because they were still selling under their company’s name. But I couldn’t sell and do work at the same time, so I just reached out to other companies and manipulated and convinced them that they needed to be the salesmen, and I needed to do their roofs. And it worked. And they bought it.

STEVE:
Do you know, Chad, the guy for whom you worked? The guy who didn’t see the value of having your crew is he still in the business? And do you–

CHAD:
A year and a half ago, he came into my office and asked me for a job.

STEVE:
Wow!

CHAD:
Isn’t that something? It gives me goose bumps. I got goose bumps again just thinking about it. He came in about a year and a half ago. And he wanted to be a salesman. He was tired of hunting for employees, he was tired of the ups and downs of roofing. The model that I live by today has obviously grown and developed over the years, but the initial five-year model with one I presented to that guy.

I mean it really was. The financials that I presented to my mom was what I used to develop my company the first five years. The five-year plan I gave that guy, I’ve obviously way exceeded any expectation I could ever have for this company. But that five-year plan was what I used to develop my company — and a year and a half ago the guy came and asked me for a job.

STEVE:
Yeah, interesting. I mean, it shows the power of a plan, I guess. The power of a good plan.

CHAD:
Well, you know, I think you hit the nail on the head. It’s not necessarily — I mean, a good plan is always a great idea. But a plan is the start. If you don’t have a plan, you’re going to fail. Even if your plan is bad, you can fix a bad plan. You know, I think you hit the nail on the head when you said it starts with a plan.

STEVE:
Yeah.

CHAD:
It absolutely starts with a game plan.

STEVE:
You said you were thinking you would be able to pay your mom back in eight months. Were you able to?

CHAD:
It was about five. It wasn’t very long.

She was really upset that she didn’t make nearly the kind of money she thought she was going to off of me.

My mom has always been huge in my life as far as my business decisions and everything, because she never gave me anything. She said she owed me — she told God when I was born that she would take care me, and she guaranteed that she would give me “three hots, a cot, and a Christian education.” And that’s all she guaranteed. So anything else I had to work on. I had work for.

STEVE:
Oh, that’s great.

CHAD:
So I owe her a lot. And all of her lessons, I don’t think it was so much the 8.9% — I think it was the lesson that she was trying to teach me. There’s no free lunch.

ROD:
Yeah.

STEVE: Just so I have a sense of your company today, when you started back in 1992, I know it was you and then you brought on another guy, it was a one-man band, it was a two-man band. What does your company look like today? how have you grown from the early 90s?

CHAD:
Oh, are you kidding me? Way beyond my wildest dreams. Muth and Company is not Chad Muth. I don’t think it was ever Chad Muth in the beginning it just I put a lot of pressure on myself obviously to stick to my plan, to continually grow my plan, and modify it based on the different situations and stuff, but the company has grown way beyond anything I’d ever imagined. We have a full-blown production department with three guys in it, we have a repair department that’s the largest one in central Ohio. We’ve got eight guys inside the repair department. We have four salesman that work for us now. We have three office ladies who do a fabulous job for me. The company is so much bigger than me. I’m just a piece of the working parts. I’m one of the gears that keep it going. But you know, as far as Muth and Company goes, there is a lot of truth to the initial guy that came up with “I am Muth, and they’re the Company.” And it stands true to this day, and it just everyday I walk into this place and it blows me away. At how well we’ve done and how much the people here care about the company. I mean, I’ve got guys that have been here fifteen, seventeen years and have worked their way up being a laborer all the way to a roofer to a production manager to a sales manager to now vice president of the company. So I’ve been blessed with incredible people and incredible staff and people who honestly feel that Muth and Company is as much theirs as it is mine. I don’t know if that’s the answer you are looking for but that’s what comes to my mind when somebody says, “What you think about the success of your company?” It blows me away every day. I think I’m probably one of the luckiest people in the world because not only is the company incredibly awesome but the people that I work with are great. My wife works with me — I’ve even had my daughter and my sons in here growing up in the summers, working on gutter crews and stuff like that, so it’s blessed me in so many ways I can’t even describe. As far as the success of the company goes, in the summer time, we help directly and indirectly supplying income for fifty-five families, so to me that’s huge.

STEVE: So when you describe, for instance, that employee who grew through the ranks he came up, it sounds like you run a pretty open operation and it sounds like you share information with your employees, and you care about them, too.

CHAD: Well, I like to think so. I think a lot of companies get very, very guarded when it comes to like incomes and profits and margins and different things like that because they’re afraid — I think sometimes they’re afraid that people might leave and compete against you, and they don’t want to give out their intellectual property so to speak, and I think other people get intimidated if they have guys that come up that understand it, because they maybe feel like, you know they’re not the smartest guy in the room anymore. With us, I want my people to know. I want my people to know what is our revenue, how much are we generating every year, what it costs us weekly to meet payroll, what does it cost us to pay the bills to turn the lights on, how much are we spending on ink and paper and different things like that? How does you throwing away a half a rack of step flash on the job or a chunk of ice card or a half a roll felt because we don’t need it on that to bring it back to the shop and we’ll show you how those wasteful items that people are thrown in the trash can be used in other ways to save money which then increases our income. I don’t care. You know, the thing is that I don’t rip people off, I don’t lie, I don’t steal. I don’t take more than what I deserve. And I want the guys to see it. Now, do I make more than them? Yup. And they know it.

You know why? Because I’m the one with all the risk, not them. But I tell them that, I’m like, “If you want me to come and work for you, then you need to take all the risk that I’m taking, and I will gladly come and work for you. But as long as I’m taking all the risks, I’m paid proportionate to what I do and what my risk level is.”

But I also show them that they’re paid proportionate to what they do and what their risk level is. I’m like, “You want to make more money? Then take more risks. Be a supervisor, be a manager, be somebody who has responsibility. But don’t come in here as a 9-to-5 guy who goes home every single night with no worries and no problems, and tell me that you deserve more. Because you’re paid proportionate.”

STEVE:
Yeah.

CHAD:
I worked with my production manager a few years ago — probably been about five years ago now — and I said, “Look, we’ve got too much waste in the company. This is what we’re spending, this is profit we’re making, this is how much your department’s costing us, and this is how much percentage it’s gone up over the years, and it shouldn’t.” And so we started looking at all the jobs, and we started seeing that half a tube of caulk would get left in the truck and get ruined or half a can of spray paint would get thrown away. And I showed him, I was like, “You know, that half a can of spray paint is $2.50. That half a tube of caulk might be $1.85.” So they’re throwing literally hundreds of dollars worth of products in the trash.” And I think when you teach your guys that — when they see how much that costs, then they start taken a vested interest in trying to save money as well.

ROD:
So–

CHAD:
And we try to give that back to them.

ROD:
Okay, that was my next question because bringing awareness to it is really step one. Now that we know that this is a problem, how do you actually execute it and make it happen on a day-to-day basis? Is there some sort of system you have? Is there some sort of recognition or award or reward for doing it?

CHAD:
Well, I mean obviously it’s a day-to-day thing and it’s part of the whole scheme of things. We have some bonus structures that we have for supervisors to encourage them if they meet certain margins and stuff. At the end of the year, I have a calculation where I take the total profit of the company after everything is said and done, and we pay out a bonus structure based on how many years you’ve been here and what level of employee you are. So every single solitary person in the company gets a small piece of the pie at the end of the year regardless of what — it’s irrelevant to their paycheck, it’s irrelevant to their weekly and monthly bonus structure, it’s irrelevant to their medical coverage or anything, it’s just simply: “This is how much we made this year, this is how much you get paid in a bonus based on a small piece of pie, so to speak.” And so what that does is that makes these guys look at things, because what they do is, if you’re getting a five-, six-, seven-, eight-, nine-hundred, one thousand dollars bonus at the end of the year because the company saved money and made a good profit, you tend to start looking at that stuff, and what I found is the guys police themselves and police each other. And they start yelling at each other, “Hey! Don’t throw those nails in the trash! Throw them in the bucket over there. We’ll sort of later.

ROD:
That’s nice.

CHAD:
They do it themselves, because — I call it “drinking the Kool-Aid,” and I know that is a bad term because of the cult and everything. But it really is — it’s being a part of the team, drinking the Kool-Aid, being on the same side and everybody understanding that were all after the same goal. And the more successful the company is, the more successful the employees are inside that company. And I put myself on that same tier as everyone else. I don’t put myself above everybody — I pay myself a modest salary to what I feel is fair for the position I do. I get bonuses just like everybody else does, based on the profit of the company, and I think it keeps the company very, very strong. And it shows people that I’m not above anybody else. I just have a different position in the company.

ROD:
Yeah, so at the very end of the year, they don’t have any idea and then all of the sudden their bonus shows up? Or do they have an idea throughout the year that hey, we’re looking pretty good?

CHAD:
Right, they have an idea. I mean, monthly I’ll send out — like I closed the books today actually cause it’s the end of the month so at the end of the day, I’ll send out, “Hey, this is how much revenue we did in February. This is what it what our costs were. This is how much — obviously we’re in Ohio so right now we lose money, this time of year. I guess “lose” is a relative term, you know. We spend what we make.

ROD:
Yeah, there’s no revenue.

CHAD:
So I tell them. I say, you know, for example, “We made” — these aren’t real numbers, but just for the sake of argument, I say, “Hey, we generated $50,000 in revenue this month. We spent $60,000, we’re negative ten thousand in the hole. We’ve got to have a fabulous March to make up this $10,000.”

Next month, I’ll say, “Hey, we generated $100,000 in revenue. It cost us $60,000, we made $40,000. $10,000 will have to pay back February’s losses, so we’re up 30 grand, guys, congratulations.” And I tell them that. People think I’m insane. They’re like, “Dude, you give people way too much information.” But information is power, and what I mean by that is when you give these guys the information, when they know when you lose money and they know when you make money and they know they get a piece of that pie, it makes them a vested person in the company. They have a vested interest in the company’s success and they understand it. If a guy — you know, I had a guy tell me years ago one time, and this is when I decided I really wanted my employees to understand what’s going on — he said, “Why don’t I get a raise? You made $5000 on that job, and it only took us three days.” I said, “How do you figure I made $5000?” He goes, “That’s what you collected was $5000.” I said, “Yeah, man, that’s how much I collect, but I have to pay your wages unless you’re working for me for free, I had to pay for the material unless you’re telling me that I don’t have pay that bill. I had to buy insurance, I had pay for gas to get over here, gas for the compressors, nails, staples, etc., etc., etc., etc.”

And the guy was like, “Yeah, yeah, yeah. Well. But you still probably made half of that.”

And I’m like, “You don’t have clue.” So I sat down with the guy, and I showed him everything, and I showed him what our true profit was at the end of the job. It was just a few hundred bucks — eight, nine percent or whatever it was, I don’t remember this was a while back — but the guy totally, his whole attitude towards the company changed, his whole work performance changed, everything changed when he understood what was going on with that job. And right then and there, I think my eyes were opened, and I said, “You know what? My people need to know this stuff. It makes them better in the company. It makes him a stronger employee. It makes them an advocate for Muth and Company and what we’re trying to do. We’ve tested it and it works. It’s worked year in and year out. This is not something I started a week ago. I started this fifteen years ago when the guy came to me and said, “You made $5,000, I need a raise.” Really?

STEVE:
What I do want to talk about a little is: you’ve been in business for over twenty years. It’s not all salad days, it’s not just showing up and end up having people throwing cash at you. What were some hard times and how did you get through those?

CHAD:
November 17, 1997, my daughter was born, which gave me my third child. I’d started my company in ’92, it really was starting to take off by ’94. So I was about three years into what I felt was an incredible ride of my life, where I was just getting — I mean, Jiminy Crickets — I mean, everything I was doing was firing on all cylinders. We were hiring people, we were being successful. I was doing great at selling. I was getting into the master elite program for the first time.

And I took three of my buddies up to New York for a long weekend to go skiing. We had been drinking all day. We’d been skiing in 50° weather, which we shouldn’t have been skiing in anyways. And the guys wanted to take one more run and go to the bar so they all circled around the backside of the mountain where all the blues and greens were. I decided to go straight down the mountain, down a black diamond run. And I got mangled up into a bunch of mookie, mushy moguls, and I fractured my leg. I had fifteen breaks in 3 1/2 inches of my leg. I was sent to love a O’Lean General, where they told me that I had severed my main artery in my leg, plus I had broken the tibia and the fibula in multiple places. That the fracture was worse than anything they had ever seen, and they were flying a specialist in from Pennsylvania, and they were scheduling emergency surgery for six or eight hours later — I don’t know — I was all looped up, drugged up, and they wanted to call my wife to notify her because the doctor was telling me that there is possibility I could lose my leg.

ROD:
Oof.

CHAD:
So the specialist came in, had the surgeries and everything. They said, “There’s no guarantee that this is going to heal properly. The nerve damage, the artery damage, the severe breaks as long as it was with the lack of blood flow” — I may have to have bone marrow transplants where they drill into and the take the marrow out of your hip and then inject it somehow into the bones. They told me that it would be a minimum of six to nine months that I would be on crutches and stuff before I could even begin therapy, right?

So I get home and I’m depressed and I’m like, “What the hell am I going to do? My company’s just starting to take off? I’m going to have to go on unemployment. My whole company’s going to be ruined.” Because you go through the depression stage, when you realize that the “S” is fading off of your chest.

So I decided — we came up with a game plan. I had a couple of guys working for me, I was going to make them supervisors of the crews. They were ready for it, they were training for it anyway. And I was good to do sales and kind of work in the office. I had an epiphany if you will, that I can’t be everything for everybody in this company. It either has to grow or it’s in jeopardy of failing, because I can’t be everything, because something could happen to me. Like I could fracture my leg and 3 1/2 inches of my leg could be shattered in the fifteen pieces, right?

So I thought, “I got this game plan. I’m going to redevelop my company. I’m going to train my guys to be supervisors. I’m going to hire some more guys in, and I’m going to get a secretary in the office. I’m going to start working with the secretary to teach her how to do some of the office stuff. I’m going to still do my sales. My wife is going to drive me to sales appointments and drop me off.”

I’d gimp in on crutches and gimp out. I kept my cell phone, she kept my pager. I would page her when I was wrapping up my meetings, so she could drive back and pick me up. And she’d just go sit at coffeehouse somewhere.

And then about four weeks into my break, I found out that two of my lead guys that I was training to be my supervisors were actually going behind my back and soliciting my contractors that I was working for, saying that they were to start their own roofing company and leave Muth and Company. They wanted to take my business with them.

The way I found out was — I told you before I develop friendships with my people. I had four of my contractors, my main contractors, my really good ones that I really liked. Four of them called me and said, “These guys have come into our office and sat down with us. They took your price sheet, cut your letterhead off, handed it to us, and said, ‘This is what you’re paying right now, this is what we’re willing to do it for.’”

So best and worst times. How’s that?

ROD:
Yeah, that’s–

STEVE:
Dramatic is how it is! Wow.

CHAD:
I fired them both. I hired some other guys, and I learned right away that no matter how much you protect or hide or try and do things, if somebody wants to come after you, they are going to after you. Right, wrong, or indifferent. They’re going to, so why not be honest, lay it out there, show them what you have, show them what you’re making, what you’re generating, what the payouts are? How to keep expenses under control, how to not have waste, and if they’re going to take your information and run with it — guess what — they’re not have near the passion that you had, because they didn’t create it. They stole it.

STEVE:
And just listening to you talk, Chad, it just goes to show the power of real relationships. That’s how you found out about those guys, that’s how you were able to survive those guys. I mean, you maintained those relationships — and you lost the devious employees.

CHAD:
Here’s the funny thing about it: three out of four companies stayed with me. One of companies jumped ship, and about three or four years later, I stayed friends with these guys. I didn’t have really no ill will, I mean, they wanted to benefit. I kind of thought they were stupid for the way they did things, but I got it. I mean, they wanted to move up. They should’ve talked to me, I could helped them. Instead I cut them off, and they had a do it all themselves.

But one of the guys called me up and he was talking to me, and he was like, “You can’t believe the son of a ______ stole one of my contracts!” And I was like, “Who was it?” And he was like, “______ Builders.”

And I like, “Huh!” I kind of giggled — I never said anything to him, but that was one of the contractors he stole from me.

STEVE:
It’s funny how what goes around comes around.

ROD:
And it sounds like this is another big step in what — here something, a crisis happens and it kind of forced you to automate your business further, streamline your business further, or train your employees better. I mean, it really was a very unfortunate thing, you’d probably not go through it, but here you did the right thing, and turned it into something great. So somebody who’s going through hard times, they should maybe remember that.

CHAD:
It’s funny, because when we when we talk about adversity with people, or you know, whether it’s in my personal life or my kids or my business or whatever, and we get into conversations, I say, “You know the best thing that ever happened to me?”

And they’re like, “What?”

I say, “Fracturing my leg.”

And they’re like, “What?! Are you insane? How is fracturing your leg the best thing that ever happened to you?”

And I say, “Because it taught me so much about how to take my business to the next level.” I had to make a decision: am I going to go on unemployment and pop pills the rest my life because I got this messed up leg? Or am I going to look at it and say, “Okay. I got a change course. I got a change paths. I got to change this thing so that it’s not so dependent upon me. I think that’s the hardest transition people have. When they talk about the glass ceiling, “I’ve hit this glass ceiling.”

There so many guys that say, “I need to grow but I can’t grow because I can’t find good people. You don’t understand, in my business you have to–” No. Business is business. Money is money. Percentage is a percentage.

If you want to grow, you have to learn to trust other people. And you have to also understand that there will be some guys out there that you put your trust in and they fail. That’s okay, because you learn from those.

ROD:
So are you doing a lot of repairs right now? If you’re not doing a lot of other work, do you still get out and do some repairs?

CHAD:
Well, yeah. I mean our repair department and service department really carries Muth and Company for probably three or four months out of the year. We do what we can, obviously, when the temperatures are like it is today: 22 degrees out with a wind chill of five. We’re not get a lot of work done, but we’re doing a lot of prospecting. You know, the salesmen are out doing prospecting, they’re meeting, you know, setting appointments up to meet with the insurance guys and property managers and different people that will help generate income in the future for us. Our repair and estimators are out doing estimates for leaks and gutters falling off the house and different things like that, so, more so were seeing the jobs stack up so that when this weather breaks in the next couple weeks, we’ll really, really start going. But yeah, we work when we can. I mean, you kind of — we’re a four seasons company because we live in Ohio, so you modify — for instance we do a lot of snow and ice removal. Not just on roofs, but we also attach plows to the front of our trucks in the wintertime, and we plow. And that helps keep the guys employed. When a guy gets laid off and goes on unemployment, they only stay there for a little while and then they start looking for another job. So our goal in the wintertime is not necessarily to make a profit for Muth and Company — that’ll come. But the goal is to keep the guys busy and give them a paycheck so that they don’t go look for a job somewhere else.

ROD:
Sure. Now what about your service work? Is that a common item that’s in Ohio that a lot of people do a lot of maintenance on the homes?

CHAD:
The funny thing is about six years ago — I was just running the numbers today to see how we’ve done over the last six years — but about six years ago, we started a maintenance program for residential roofing in Ohio, where we’d do — we call it an “ESP,” which is an Extended Service Plan, and it’s basically designed to do exactly that. It’s designed to extend the life of your roof, so you sign up for an Extended Service Plan, we go out to your house, we have a five-page basically report that we do, it’s all digital. We go out to the house, we do a complete inspection, we clean the roof off of all the debris, we clean the gutters out, we re-nail all the gutter spikes, we caulk all the flashings, you know, the soul boots and heat stacks. And we paint everything.

We basically do an oil change for the roof. We do that once a year for the customer. If we find something that it is easily fixed we do it as part of the maintenance plan, if it’s something that needs more attention or more detail or we have to pick up products, then we give them a repair estimate, and they obviously get a discount for being one of our customers as well. So it works out very, very good and for us, I mean, it’s been absolutely fabulous. Now, we started it. Before Muth and Company started it six years ago, nobody in Central Ohio was doing maintenance plans at all. Not unless the customer called and said, “Hey, can you come out and take a look at my roof?” And “How much would you charge me to kind of go through and make sure everything is right?” But nobody had a formal maintenance plan that I know of prior to us starting that about six years ago.

ROD:
Okay, yeah. That’s not a very common item, but it sounds like it worked well for you.

CHAD:
Yeah, it does. I mean, here’s the thing: we always look at our customers are our customers for life, and a lot of guys look at it as a customer will maybe put one roof on — maybe two — in their whole entire life and that’s it. But customers need other things, and they want somebody who’s reliable, dependable, honest and trustworthy to come out and look at their stuff. So for us, it was a way to create customers for life. We come out, we do the ESP-slash-”oil change for your roof,” we show you some things. We point things out that we don’t even do. I mean, we don’t do windows, and we don’t do, necessarily, siding or doors, but if we see that the caulking or the glazing around the windows need replacing, we point that out to them, because these customers can’t look at all of this stuff every single day. So we show it to them, we say, “You might want to get a guy out here to take a look to windows. It looks like you might need your windows re-glazed.” Or “You might need your chimney re-tuck pointed.” We do some of that stuff, but we don’t go into like when the bricks start to deface and you have to remove bricks and stuff. So we can do some minor tuck pointing repairs and stuff, but if it’s major we recommend that they get it done by a mason. We’re not a mason, so we don’t necessarily try to take on jobs that we’re not accustomed to doing.

But who are you going to buy a roof from, when you need a new roof? Are you going to buy it from the guy in the phone book that you know nothing about? Or are you going to buy it from the guy that’s been out there every year for the last five years, taking care of you, doing your maintenance, and building that trust factor?

ROD:
Yeah. No kidding.

CHAD:
It’s worked quite well. Not to bore you with the ugly details, but as of right now, we have a total of 483 Extended Service Plans that we’re doing for customers around central Ohio area. I mean, that’s a phenomenal way to inject life into your repair department. We’ve got 483 service plans that they’re doing between spring and fall.

ROD:
It sounds like also you’ve learn a lot. I think I learned a lot just hearing you speak today, and I think others would hopefully learn a lot from your stories as well, but what’s something real simple that somebody could do? Maybe a book? What book would you possibly recommend to another business owner or roofing contractor?

CHAD:
Oh, geez. You know, you said you weren’t going to put me on the spot…

ROD:
Well, what’s a recent book that you read?

CHAD:
The book that I think everybody should read, my daughter turned me onto it, it’s called The Alchemist. I just read it, actually about a month ago now, and it was the most profound book that I have ever read. I don’t even know if profound is the right word, but I think it is. It’s an incredible book about just life and your dreams, and don’t settle. My daughter gave to me — my 16-year-old daughter gave it to me, so for anybody who’s can read that book, keep in mind a 43-year-old man was given this book by a 16-year-old girl, and told, “Dad, this will change your life, you need to read it.”

And wow — it was intense. It was pretty good. I actually read it on an airplane and there were several different times where I had to put the book down, because I thought I was going to cry. And I’m not a crier. I grew up you know with a very, very tough dad who said, “Boys don’t cry, men don’t cry, suck it up and get back into life.”

Good to Great — that’s another book that I read a while back that was actually a really good book.

ROD:
That’s a good one, yeah.

STEVE:
So obviously you’re very knowledgeable and you’re running successful business. I listen to your voice and it sounds like you’re still enjoying it. And it sounds like you’re still excited to get in and do the work every day.

CHAD:
Well, I love what I do. I love my job. I love the people that I’m around. I love my customers. I’m extremely passionate about roofing. It’s funny because twenty years ago when I got into the business and people said, “What do you do for a living?” I was almost embarrassed to tell them I was a roofer. I would say, [mumbles]. And they would say, “What?” — and I would say [mumbles]. And they’d say, “Excuse me, I can’t hear you.” And I’d say, “I’m an exterior remodeler.” Because think about it: “exterior remodeler” that implies that you’re much more sophisticated than “What you do for a living?” “I’m a roofer.” Now I hang that around my head with pride. People say, “What you do for a living?” I say, “I’m a roofer.” And they kind of go, “Oh…” and they look around for more intelligent conversation in the room, you know.

ROD:
Well, you could always say that you’re an exterior remodeler with an emphasis on the top portion of the building.

CHAD:
Right. There you go. But you know, the thing is the industry has changed a lot in the last twenty years. And roofing contractors are doing a lot more than we ever did. You know we used to be two men in the truck were everywhere, and it’s not that two men in the truck aren’t everywhere anymore but there’s a lot more challenges in the roofing industry with the regulations, the government intervention, payrolls, Worker’s Comp, bonding certificates, lawsuits. There’s just so many things that make it so difficult for a guy now to start up a residential roofing company and just be that two men in the truck.

The customers alone are much, much smarter than they ever were. They have Google, for crying out loud. So a customer now — you can’t go to a customer and say, “I’m going to throw a roof up on your house — I’m going to charge you this,” and hand them a business card with the price on the back of it. Because they’ll go, “Whoa, whoa, whoa. Wait a minute. What type of felt are you using? How are you ventilating my roof? What are you doing with my bathroom fans? What type of shingle are you going to use? What’s the warranty on that shingle? Are you certified? Are you trained?” Because the customers — their hands are on everything instantly — we’re an instant society now.

All you have to do is type “roofing” into the Google search and you can find out whatever you want to know.

ROD:
That’s right.

CHAD:
And I think that makes it more challenging for the people and then, you know, with the changes in the growing and the education that were getting now, I just love it. I love the customers. I love the people. I love the challenges. It’s something new every single day. I mean, if you asked me twenty years ago would I be doing a interview with some incredible people on the phone, I would have said, “No! Nobody’s going to call me and interview me. I’m just a roofer!”

ROD:
Ah, I love it. “Just a roofer.” But you know what, we really appreciate everything you need shared with us today. Real excited to get to talk to you about this stuff. And we hope that the others can learn from it.

CHAD:
Thank you guys.

STEVE:
Okay, that was a great conversation. We really appreciate Chad’s time and that he shared so much with us.

ROD:
Absolutely. One hundred percent agreed. I personally am going to be a little more careful on black diamond runs!

STEVE:
Good idea, Rod. So again, we are in this to help roofing contractors. If you have any questions or ideas for us, please get in touch. Email us at info@roofinsight.com.

ROD:
And check out our software to help roofers over at RoofChief.com.

STEVE:
We have more great interviews coming up in the future. We’re really excited about them.

ROD:
Yep. Thanks for listening, everybody. Catch you next time!

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