American Dream Achieved
IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability. In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories. It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.
The Story of Gerard & Beth Maloney of EarthHeat
By Nesha Ruther
Gerard and Beth Maloney’s career has been defined by taking risks and leaps of faith. “We both grew up on Cape Cod and met when we were in our early 20s,” Beth says. “We had heard a lot of good things about Seattle, so after becoming engaged, we packed up and moved to WA in 1991 and were married in 1992.”
If moving across the country to begin their life together was not already a big leap, in 1995 the pair decided to make an even bigger one, opening their own business. Gerard had been working as a plumber since high school, “I went to a vocational-technical school, so I’ve always done plumbing and hot-water heating,” he says. However, he felt the pull of entrepreneurship and wanted to have more control over his new life.
“I have to say, I was a bit reluctant about going into business,” Beth says. Her hesitations were not unfounded, they were a young couple in a new city and had just welcomed their first child. The spirit of adventure, however, would become the cornerstone of their long and successful career.
“We started Cherry Valley Plumbing in 1995 and plumbing and heating was our bread and butter,” Beth says. This alone put them in a unique position to succeed. On the East Coast, most plumbers like Gerard were trained in heating as well. In the Pacific Northwest, however, the industry was more stratified. “Back east, everybody that’s a plumber does heating as well, it’s just a part of what you learn. But when we came out here, we found there was a distinction. There are plumbers, and then there are people that do heating. We just happened to do both. It was a nice thing for us to be able to cover a lot more ground than most people in the Pacific Northwest,” Gerard says.
They could have stayed that way and built a nice business for themselves, but before long, they were ready to take their next calculated risk. Over the years, Gerard had become increasingly passionate about geothermal heating. “No one I’d ever worked for was doing geothermal, no one was getting involved in the new technology that was coming out. I wanted to make my job interesting, I wanted to do things that challenged me. Geothermal was a more efficient method of heating, and the market seemed to be able to adapt to the cost. I knew it was going to be something that would take hold at some point and wanted to take advantage of the opportunity,” Gerard says.
One challenge of running a business in a cutting-edge industry, however, is the lack of formal education surrounding it. “I hired a technician who introduced me to geothermal,” Gerard says. “But it was hard to find reliable education, there was no school that was teaching it. I had to travel quite a bit to go to seminars and classes in order to learn everything I possibly could about ground-source heating.”
For those of us who are not in the heating and cooling industry, some necessary information; most houses rely on fossil fuel-based or inefficient electric resistance systems to provide heating. Geothermal heating, on the other hand, relies on the natural heat that exists below the earth’s surface, converting it to warm air or hot water utilizing very little electricity through geothermal heat pumps. While installing the necessary infrastructure underground is more intensive than putting a boiler or furnace in your home, it is far more efficient and significantly decreases emissions, making it an effective and environmentally conscious alternative to conventional systems. This is why the EPA recognizes it as the most efficient HVAC system available on the market.
Within the first five years of opening Cherry Valley Plumbing, Gerard and Beth decided to pivot and focus more exclusively on geothermal heating. They changed the business’ name to EarthHeat, making it more synonymous with the technology they were providing. In the mid-90s, going all in on such new, forward-thinking technology was incredibly risky.
“I was terrified,” Beth says candidly. “I wanted the predictability of that paycheck. Growing up, my dad was a carpenter, and things were often tough. He had his own business and I saw firsthand how tough it was being in the construction industry. But I also knew how passionate Gerard was and I believed in him and his capability.”
With great risk comes great reward, and Gerard’s instincts were correct. “[Geothermal heating] really led us into a niche market of higher-end custom homes,” Beth says. “And since we were doing this specialized heating system that wasn’t commonly known here, there wasn’t much competition.”
Working at the forefront of a cutting-edge industry also allowed Gerard and Beth to work directly with homeowners. While the majority of plumbing and heating experts work through construction companies, EarthHeat was providing a new service that most construction teams did not. If a customer was interested in building a home with geothermal heating, they would directly approach Beth and Gerard.
Many of these homeowners were young, affluent professionals brought to the Seattle area by Microsoft. “We started getting a lot of calls from Microsoft people that were building houses,” Gerard says. “They were smart enough to know what systems they wanted in their homes, but when they introduced the idea of geothermal to their builders, the builders would say ‘I don’t know what that is.’ So, they would reach out to us. Being a niche market that nobody else was participating in, along with having a very smart customer base really allowed us to take off.”
“Not only did we have an educated client base but being in the Pacific Northwest they were environmentally concerned and conscious, that was driving a lot of their decision making,” Beth says. One Geothermal heat pump manufacturer suggests that installing one geothermal heat pump is equivalent to planting roughly five acres of trees. This is a major point of pride for Beth and Gerard. “We’ve installed thousands of heat pumps, so that’s a lot of trees. I don’t know too many people who can look at their career and directly say it has benefitted the environment. We’ve had to make a lot of sacrifices, but we really did make a difference in our little corner of the world.”
To help illustrate just how ahead of the curve EarthHeat was, today, nearly 25 years later, geothermal heating has become a mandatory consideration for military operations, and many school districts receive funding from the government to install geothermal heating into their buildings.
Despite this progress, up until Beth and Gerard sold their business this past year, they were one of very few companies fully committed to offering geothermal. “When people started seeing what we were doing, a few of the bigger residential mechanical companies jumped in, but even today if you were to call ten HVAC companies, you might find two that offer geothermal. Even so, I hear this over and over, the company will come to the customer’s house and immediately try to switch them to a different heating system that the company is more comfortable with. Companies will offer it knowing it is a hook for the client, but no one offers it like we did. We were probably installing more geothermal systems in a year than our regional competitors combined,” Gerard says.
While the competition could see the monetary benefits of offering geothermal, they lacked EarthHeat’s decades of experience and perhaps more importantly, their genuine belief that ground-source heating was not only a viable alternative to conventional HVAC but a superior one. “Having the passion and knowledge that we built up over all those years, we understood the costs and systems better than anyone else,” Beth says. “So many companies just try to sell you on price,” Gerard adds. “And geothermal has never been exactly affordable, but it’s 450% more efficient. When you use the temperature of the ground to heat a home, it’s so much more efficient.”
Gerard had the product insight and passion to make EarthHeat successful, but that is not all that’s needed to run a business. You also need a steady hand and financial acumen; this was Beth’s forte. “I had a business degree and a keen understanding of the insurance industry and risk management, so that, coupled with an accounting and bookkeeping background enabled me to handle all the administration aspects of the business,” she says. “I was able to compliment Gerard who was 100% in the field and running that aspect of the business.”
The mutual trust and respect the couple maintained for their differing skill sets not only benefitted the business, but their marriage as well. “There has to be a close relationship there,” Gerard says. “But being husband and wife plus business partners can be difficult. One of the biggest challenges we’ve had over the years was not letting the business consume us. We were still husband and wife, we didn’t want the business to be the topic of too many conversations, and we didn’t want to be discussing it at dinner.”
As EarthHeat came of age, so too did the couple’s young son, and before long they welcomed another boy. As any entrepreneur will tell you, juggling work and family can be extremely taxing. “There were a lot of sacrifices along the way, it was a constant challenge,” Beth says. “Looking back over the years though, we worked hard but we also played hard. We were going full steam either at work or being super active with our family. It was a whirlwind 28 years, but we were able to make a lot of really good memories.”
With the challenges of entrepreneurship also come the benefits. By running their own business, Beth and Gerard could control their own schedules and make active decisions about spending time with their family. “By not working for someone else, we were able to manage our own time,” Gerard says. “We didn’t have to align PTO days, we could just do it for ourselves.”
Always adventurous, the Maloney family enjoyed hiking, backpacking, traveling, and even dirt biking. Without the flexibility of owning their own business, they would not have been guaranteed that freedom. “We definitely enjoyed the fruits of our labor,” Beth says.
That being said, the couple did not go through nearly three decades of business without their fair share of hard times. In 2008 when the stock market crashed, fewer and fewer people were in the position to build their own homes. “It was a brutal time for anyone in construction,” Beth says. “We had to be nimble; we downsized, we sold off a lot of equipment, and did what we had to do to make it through those times.”
When the going got tough, however, EarthHeat still had their old bread and butter to turn to. “We had mountains at times, but we also had deep valleys,” Gerard says. “We realized we needed to fill the valleys with plumbing. I’m a licensed plumber and have been for 40 years. Plumbing was what saved our butts in those really difficult moments.”
It wasn’t always something as dramatic as a nationwide financial crisis that caused Beth and Gerard to return to plumbing. One of the downsides of geothermal heating is that by definition, the installations have to partially take place outdoors. In the Pacific Northwest, this meant there was only a limited window of time in which such work could take place. “Geothermal work has to be done during favorable months of weather because we’re doing a lot of excavation,” Beth says. “In the dead of winter when you can’t break ground on excavations, plumbing work would keep us busy.”
Of all the challenges EarthHeat faced over the years, however, none was as pressing as the ongoing problem of staffing. “Trying to find good, qualified installers was continuously an issue,” Beth says. “With more and more people not going into the trades, but into office jobs, our workforce is really suffering.” This lack of quality tradespeople is compounded by the fact that technology has made installations far more complicated than they were in the past. “Today’s technicians need to be tech-savvy. We needed people that can not only handle putting pipes together and understood how pumps work but were able to program complicated controls and thermostats.”
While many entrepreneurs working in the trades can relate to this issue, it was even more pronounced for Gerard and Beth, who were pioneering a new wave of technology. “You can’t teach an old dog new tricks. We had trouble even finding plumbers we could hire and cross-train into geothermal,” Gerard says. “We had signs out front for years advertising jobs for plumbers, we went to headhunters, no response. We really had to just try to grow organically and hire apprentices when we could.”
While staffing was a problem that never completely got solved, Beth and Gerard are happy to put it behind them. It had always been a dream to retire in their 60s, and while they never fully expected it to be feasible for them, EarthHeat has made that a reality.
“We felt it was time to enjoy the rest of our lives without the pressure of being in business,” Beth says on the decision to sell the business.” Therefore, when a client reached out to Gerard and Beth about buying the business, they knew they had to take the offer seriously. “One day, one of our clients asked me if I would ever consider selling the business, and I said yes,” Gerard says.
To facilitate the sale, they reached out to Gregory Kovsky and IBA. “We had spoken to a real estate coach and mentor who said, ‘If you want to sell your business, I know just the guy you need to talk to.’” Beth says. “We just loved Gregory. We could walk into his office in Bellevue and talk to him face-to-face. We trusted him. He had also sold a business in the next town over that was in a complimentary industry to ours, so he had a track record that we could verify right there in the community.
“We had always heard that construction companies don’t get bought up because the value is in the owners. Once they’re out of it, the business has nothing but the name. It was through Gregory’s coaching that we realized there was a market for our business.” Gerard adds.
In June 2023, Beth and Gerard sold EarthHeat. Since then, they have continued to live a life of adventure, spending the summer traveling to Scotland and Ireland with friends. They are currently converting their old plumbing van into an RV. “We’re going to use the plumbing van to ride off into the sunset,” Gerard says, laughing.
For Gerard and Beth Maloney, the American dream has always been about taking risks. From starting their own business to centering their offering on a cutting-edge new form of technology, no one can say they took the easy route. “You have to be willing to stretch your neck out, to take chances,” Gerard says. “It is possible to live the American dream, but you have to work hard for it, and you have to make sacrifices.”
Nesha Ruther
Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.