Full transcript10 chapters · 11,177 words
00:00Stuck at $4.8M when he thought the answer was more leads
Cody Martinez: We were stuck at 4.8 million. I thought the answer was marketing, more leads, more calls. It really wasn’t. The year I started managing every single phone call, listening to the customer, managing them to the right tech, we doubled to 10 million.
Tyler Martin: Welcome to Profit and Grit with Tyler, where blue-collar owners and insiders spill the real story behind their hustle, building businesses that thrive through sweat and smarts. We’ll dig into their journeys from scaling chaos to growing the bottom line with lessons and grit that pay off big.
Tyler Martin: Here’s your host, the Blue Collar CFO, Tyler Martin. If you think growth means more leads, this episode might save you a ton of money and a ton of headaches. Today, I’m talking with Cody Martinez from Cowboys Air Conditioning and Heating in San Antonio.
Tyler Martin: This is an HVAC company that went from about $4.8 million to roughly $10 million in one year and is now pushing towards that $20 million mark without selling out. In this episode, you’re going to learn how to dispatch for dollars, how to run call-by-call
Tyler Martin: management so every tech shows up positioned to win, and the culture habits that keep A players when everyone else is bleeding talent. Let’s get into it with Cody. Hey, Cody, welcome to the Profit and Grit Show. How are you doing?
Cody Martinez: I’m doing great, sir. Thanks for having me.
Tyler Martin: I’m so excited to talk with you. You are like, I don’t know if this is a word, but the most realist dude that I’ve met.
01:41Running an HVAC shop where every sibling has a seat
Tyler Martin: So I’m just so excited to have this honor. I’d love to start about learning a little bit about you. What do you do professionally? And then I’d love to know a personal note about you.
Cody Martinez: Yeah, professionally, this is my life. You know, Cowboys, what we do every single day. The business, it’s everything. It’s everything to me and my family. when it comes to personal it’s funny uh all i do is work you know it’s kind of like how we were
Cody Martinez: talking about earlier i really like to give my all to something and regarding what we’re talking about with you know the football thing and all that i like to see people give their all and uh see what happens at the end and that’s kind of what my journey is right now i’m trying to give
Cody Martinez: my all to this and um sacrifice everything i can possible and hopefully come out on top but But professional-wise and personal-wise, Cowboys is everything to me. I put the business first even over myself. I know it sounds a little crazy sometimes, but I feel you got to be kind of crazy to
Cody Martinez: get there. So that’s basically what I do every single day.
Tyler Martin: So running an HVAC shop with your family, can you kind of paint us a picture a little bit? What family members are part of your business? Where do you fit in terms of your role in the business?
Cody Martinez: Yeah. So running the business with the family, every single person’s involved. My two brothers, I call them my finance bros. They’re working on our finance and our accounting department.
Tyler Martin: Right on.
Cody Martinez: Man, my sister’s a killer. She’s actually our installation manager.
Tyler Martin: Love it.
Cody Martinez: My sisters are installation manager, my uncle, my mom, my dad. They try to work as much as they can in the business. But I think, you know, for them already, they’ve already kind of seen how dedicated we are to it. So they kind of took a step back these past couple of years.
Cody Martinez: But that’s everybody that’s in the family. It’s my two older brothers. I mean, my older brother, my older sister, my little brother, we’re all involved. It’s everything to us.
Tyler Martin: That’s awesome. Has there ever been or do you ever envision this possibly happening where a family member might not fit into the business?
Cody Martinez: Yes, to a certain extent. But I think how my father raised us is that we’re going to make it happen no matter what. I think one of the family members would have to literally say, hey, I do not want to do this. But we’ve all had the conversation before.
Cody Martinez: We understand it’s going to be a struggle. We understand it’s going to be a fight. We understand we’re going to have to climb a mountain doing what we do and especially working with family. You know, it’s kind of tough because there’s a lot of emotions involved.
Cody Martinez: But at the end of the day, we understand when we walk in a door, it’s business. When we walk out of it, you know, we’ll die for each other. So I think it’s how my father has raised us, to be honest.
Tyler Martin: Yeah, that’s cool. Because it is, you know, I work with a lot of family-owned companies and the dynamics, it can get intense. I mean, people, family members have different viewpoints. They have different ways of doing things, different work ethics. even their belief in terms of how much money the business is making.
Tyler Martin: You know, I’ve had cases where, you know, one family member thinks it’s a piggy bank. And then, you know, the other family member is the more frugal one, and it causes a lot of friction.
Cody Martinez: Of course, I definitely see that. I see it. I’m sure it’s happening out there. We’re just really close when it comes to our family. And, you know, we all kind of have the same mindset. And I think that’s the biggest thing. You know, all of us being on the same page, being able to have those difficult conversations with each other,
Cody Martinez: but still understand, hey, you know, when we walk out the doors, you know, we love each other. So
Tyler Martin: yeah, definitely. That’s very cool. Okay. I kind of want to get into the story. I want to start from the beginning. So your dad’s the one that started this business. I believe if, as I have, if I have the story correctly, I’d love to just go down it. He, he got fired or laid off. I’m not
Tyler Martin: sure of the exact situation on Christmas day, probably laid off. There was probably a reduction in force. Play that out. How did, how do you wind up into Cowboys? I mean, how does it go from,
05:28Dad laid off on Thanksgiving, mom cold calling from home
Tyler Martin: hey, I’m unemployed to now I’ve got a $20 million plus HVAC shop many years later.
Cody Martinez: Yeah, it’s funny. I actually picked a specific day because it’s my dad’s birthday. That’s the reason why I picked a day for the podcast. It’s actually my first podcast ever, too. So I want to tell you, I appreciate you giving me the opportunity to come here and
Cody Martinez: share my story. And I kind of feel like we are at the point to where I should start stepping out of my box and, um, you know, share the story and kind of help other people with the same stuff that we’re going through. But actually my mom and my uncle started our company. So my dad’s a true
Cody Martinez: technician by heart. My uncle’s a true installer by heart. My mom’s a true, uh, CSR by heart. So my dad, uh, it was actually Thanksgiving. He gets laid off. He gets fired on Thanksgiving. His company basically told him he was a comfort advisor, sales tech, whatever you want to call
Cody Martinez: at the company and they ended up letting him go for whatever reason. I remember to this day, they came to the house on Thanksgiving. We cleared out his van in the driveway and basically just went from there. My dad’s always put our family first. So when my mom and my uncle
Cody Martinez: came to him saying, hey, let’s start our own company, he said, man, there’s no way. I got to take care of the kids. I got all these bills. I’m just going to go keep doing what I know. So he went ahead and started applying other places.
Cody Martinez: Of course, he got a job. My uncle and my mom, they went on with the chance, the dream that they had. And my mom would cold call from the kitchen table. I remember she would make us dinner and she would get straight to cold calling.
Cody Martinez: And we would just sit there and listen to her all day. She would go pass out flyers. We would go help her pass out flyers in the neighborhood after school. My uncle would go out, take the job, install the job. and they just got to a certain point to where they called my dad and said, Hey, you know, we,
Cody Martinez: we got to where we want to be to where we think you can come on and we can make a living out of
Tyler Martin: it. And the rest is history. Wow. That’s pretty cool. And when they, so they were kind of bootstrapping at your mom and your uncle, right? Cause it sounds like, I mean, he’s doing, she’s doing it from the kitchen, taking phone, cold calling people. That’s pretty insane.
Cody Martinez: A hundred percent. So every single year we actually give my parents a little gift at the or just a little appreciation. And two years ago, we framed this big picture that sits upstairs in the main office and top left of the picture is the house
Cody Martinez: where they started the company. And then it goes to our next office and our next office and our next office. But yeah, you’re exactly right. My uncle and my mom, they put their heart and soul into this place. And like I said, we used to help my mom pass out fires in neighborhoods.
Cody Martinez: And it’s a crazy story. And I don’t think my parents has ever had the chance to explain it. So I’m glad and grateful I’m in this position to be able to share their story for him because they definitely deserve it.
Tyler Martin: It’s very cool. And then did your dad, once he joins the company, does he kind of at some point step forward and he becomes kind of the front of the company in terms of decisions and moving things around?
Cody Martinez: A hundred percent. So when you mentioned I’m one of the realest people we’ve ever met, I strictly get it from my dad. Today, it was like I said, it was his birthday and my older brother gave him a picture book of his 60 years.
Cody Martinez: And there’s a picture of him at my age and we literally look identical. And it’s funny, everybody was like, man, you and dad look the same, but I get it from him. Once he stepped into the business, he’s so encouraging and he’s so,
Cody Martinez: the minute he’s that type of person, when he steps in the room, he doesn’t have to say a word and everybody just gravitates towards him. It’s crazy. I would want to lay down my head at the end of my life. I hope and pray to God.
Cody Martinez: I’m at least half the man he is. So, yeah, he’s definitely he stepped in and he took it from there. And my mom, my uncle just followed him. And I mean, we’re where we’re at today because of all of them, to be honest.
Tyler Martin: Yeah. Well, you definitely have that quality, too. And we’ll get to that in a few minutes. I think we have some good stories. And hopefully my research. I think I’ve already missed a couple of things here in terms of details. But does your dad, doesn’t he have a sign on his door that says it’s not for sale?
Tyler Martin: Is that correct?
Cody Martinez: Definitely. So he kind of wanted to, like I said, they took a step back these past couple of years.
09:46The not-for-sale sign and betting his savings on the building
Cody Martinez: He’s been trying to figure out what they can do within the business. You know, like I said, it’s everything to us. He even showed up today on his birthday. I’m like, man, I got a broom. I was trying to push him out of here.
Cody Martinez: I’m like, man, get out of here. Go enjoy your birthday. But he was thinking about doing a podcast himself. And behind the podcast, it’s still up in his office. we haven’t started nothing but the reason for the podcast is because we kind of just wanted to talk
Cody Martinez: about what we do every single day and you know for him for something for him to look back um i guess as a memory but yeah he has a sign behind it that says not for sale reason being is because my dad’s all about legacy it’s all about family and um i don’t know if i share this with y’all but when we
Cody Martinez: talked last time a couple years ago i went up to his office we talked and he told me uh you know I don’t care about you. In so many words, in Al’s words, there’s a little bit more to it, but he said, you know, I don’t care about you.
Cody Martinez: I’m like, what are you talking about? In my head. And he’s like, my mission and what I care about the most are the people that are going to come after you. Your kids, your siblings’ kids, our employees’ kids. And, you know, he doesn’t want, he’s not a sellout.
Cody Martinez: And as much as I, I know my ruffle some feathers out in the industry, but, um, it’s not about money to my dad. My dad is here to change people’s lives. and I know he knows. If he did ever sell, it’s gonna affect a lot of people here at the company.
Cody Martinez: A lot of people are either gonna have to go look for another job or they’re gonna have to be comfortable or okay with the new owners that come in here. My dad’s not the type of person to turn his back on anybody. He feels like he owes everything to everybody,
Cody Martinez: even if he doesn’t. And that’s just the man he is.
Tyler Martin: Wow. You know, that kind of gives me the chills because we talk about legacy a lot of times and it has meaning, but it’s like a whole nother level when you’re like thinking about your future generations of wanting to be able to give them a better life.
Tyler Martin: I mean, that’s pretty cool.
Cody Martinez: Yeah, it really is. And so the building we’re in here today, we’ve always rented on the past couple offices we had. He went in ahead and bought this building we’re in today. I think it’s somewhere around 20,000 square feet. And we had a meeting with the whole company
Cody Martinez: the first day we moved in. And I didn’t even know this until that day, but he actually told everybody that he spent his life savings on buying this place. And everybody just stayed quiet. And he said the reason why is because he’s betting on the brand that we wear over our heart.
Cody Martinez: He’s betting on the company. He’s betting on the people. And he could have easily just kept all the money and retired and been comfortable. But he spent every single penny he had on this place because he is going to bet on the future.
Cody Martinez: And man, he’s just, it’s tough to talk about him because he’s, man, I can’t even put in words the type of person he is. And hopefully I’m doing the best I can. But he is, you know, one of a kind. He really is.
Tyler Martin: That’s really cool. And by the way, happy birthday to your dad. You said it’s 60?
Cody Martinez: 60. Yes, sir.
Tyler Martin: Big 60. Very cool. That’s a new era. That’s awesome. That’s great. Hey, I want to go into the next thing that I think is really the audience can get a lot out of this, myself included, when I heard it. So you guys went in one year from about 5 million, I think it was 4.8, to 10 million.
Tyler Martin: So you almost doubled in size. And I believe you attribute a lot of that to how you strategically changed call management.
12:58Call-by-call management and dispatching for dollars
Tyler Martin: Could you talk through that and just what changes did you make? What impact did it have? And what did you learn from it?
Cody Martinez: Yeah, definitely. I called call-by-call management. You know, I’m not going to sit here and say I came up with it. I know we’re going to get to this here in a little bit about recruiting and stuff like that. But, you know, putting the right people in place, understanding that bringing other
Cody Martinez: people to the team that can do everything that I’m doing better than I can and realize that I will be the bottleneck if I’m trying to handle everything is kind of an example to it. So in the beginning, we just had one of our CSRs dispatching. So when I did get involved
Cody Martinez: in the business, I started trying to figure out, well, how can we increase revenue? How can we, you know, get better to where we’re at today? So I got in the field. My dad had me ride with the senior technicians. And I noticed with every single person I rode with, they clicked with
Cody Martinez: every single individual customer differently. So I kept that in my back pocket. When I got into the office, when I would answer all the calls, schedule appointments and everything, I noticed the relationship that I would build with the customer on the phone. I know my technicians so
Cody Martinez: well to how they were the minute they woke up in the morning, what their attitude was, what they did on the weekends, what their hobbies were, who their families are, where they came from. I started to realize if I, I guess cherry picked, if that’s the right word to say, if I cherry picked the calls
Cody Martinez: the right way, if I manage the calls the right way, and I put the technicians in the best position possible to come out with the best outcome of the call and maximize it, we’ll probably be able to bring more revenue in. So I had this guy that came here from Philadelphia that worked here. And
Cody Martinez: I remember to this day, I’ll use this, for example, I picked up the phone, talked to this customer. I heard their accent. I knew they’re up north from somewhere. I asked him, Hey, where are you from? And just a couple extra questions, a couple more genuine conversation on the phone.
Cody Martinez: And he ended up telling me he was from Philadelphia. Well, boom, I noticed Jeremy’s my guy. I know Jeremy’s from Philadelphia. That’s going to break the ice the minute he gets there. Common ground for relationship building. It’s going to be perfect. So being able to manage the calls properly,
Cody Martinez: the call-by-call management was a big, significant part of our growth nowadays. And like I said, I’m not going to take this from, I’m not going to say I came up with this, but I heard this and I was trying to explain it to you all the day we talked.
Cody Martinez: And I heard this a couple of days ago from one of these new hires we got here. And he calls it a dispatching for dollars. I like that. And when he said that, I was like, man, the way I’m trying to explain it to people, you know, may not come off right.
Cody Martinez: But when we dispatch, we got to dispatch in the tent of not just running the call, but actually maximizing on the call. So the call-by-call management is huge. And that’s actually just like, you know, really the first portion of it is getting the right text at the right call regarding of what we know, the information we gather on the phone.
Cody Martinez: But it goes even to more in-depth than that. You know, we don’t just let the technician run the call and then boom, he closes down and we move on to the next. Now, to this day, you know, there’s many different many technicians, so I’m not doing all by myself, but we’ll have a call by call management person that will sit there with the technician and stay with him through the whole process of the call.
Cody Martinez: The technician will actually call our call by call management team game plan with the call by call management team and let them know, hey, this is what I’m seeing. You know, this is the objections you’re already telling me. How do you think we can overcome it if they don’t already know?
Cody Martinez: And, you know, I kind of missed a step as well, but our call-by-call management team will actually call the customer first, ask a couple questions, see what’s going on on the call, gather some more information, and then we’ll call the technician and say, hey, you’re headed to Mr. Jones’ house.
Cody Martinez: This is what he told me over the phone. This is what he’s experiencing. This is his pain points. Fast forward, technician goes to the call, builds a relationship with the customer, does his process. We’ll game plan the call again. and then from there we’ll go in, we’ll game plan, you know,
Cody Martinez: the options on what we’re going to build that’s, you know, pertaining to the situation. And then even from there, the technician, when he does go into the home, you know, if he’s kind of not clicking with the customer or if the customer is kind of not getting what he’s recommending
Cody Martinez: or explaining, the technician will call from the table as well and say, hey, I’m sitting here with Mr. Jones. We went over X, Y, and Z. These are his concerns, whatever the case may be. And it’s really a playbook. We really don’t just dispatch the call and say, all right, see you later, good luck, have a good day. We make sure we maximize every single call possible and take as much information we can from the call to the customer and help out the technician along the way.
Cody Martinez: because that’s where we’re going to see the growth and the revenue that comes in. And I feel like a lot of companies, when it comes to dispatching, they don’t really realize how important it is. They think they can just have a CSR, just dispatch the call.
Cody Martinez: But when I was originally doing it, I would go through, even if the customer has been with us from 2008, I would go through every single invoice and get real details for the technician, let them know what he’s going into, just so we can set ourselves up
Cody Martinez: with the best success rate as possible.
Tyler Martin: How do you, so when you were doing it, obviously you controlled the environment and probably had a certain level of quality and you knew everyone where you could match them up to the best that you could. Now that you have a team, how do you maintain that quality?
Tyler Martin: Doesn’t that get harder when you have a call management team, call-by-call management team? Is that hard to maintain that quality or how do you do it?
Cody Martinez: It gets harder if the culture is not right at the company.
Tyler Martin: Okay.
Cody Martinez: Everybody here, if you walked into our building today, you would think everybody’s related. We’re all super, super close. We love what we do. We all love each other genuinely. And a lot of our technicians will talk to our call-by-call management team. We’ll sit down, have breakfast, have lunch.
Cody Martinez: Our call-by-call management team will actually encourage and be a positive influence and voice to the technicians. because it’s hard out there, especially when it does come summertime, you know? And the other thing too is like, we’re asking these technicians to, you know, leave all their problems at home.
Cody Martinez: And at the end of the day, when you do get back home, the problems are still going to be there. So it’s hard to, if you have something going on at home, to come to work, to perform and be successful. It’s very, very tough.
Cody Martinez: And, you know, something else that I took from my father that I told the technicians all the time is that if home is not right, don’t expect work to be right. And I always make sure every single person is, you know, home has to be right.
Cody Martinez: The family at home has to be right. Everything has to be right at home for us to be able to perform properly and give five-star service. And, you know, but regarding what you’re saying, it would be hard if people just showed up and didn’t care about what they do or just showed up just for a paycheck or just showed up just for a job.
Cody Martinez: but we all understand like our technicians understand that our call by call management team is a big part of the company so they lean into them big time they actually talk more than anybody in the whole company because they’re talking with each other all day so regarding your question
Cody Martinez: i would say it would be hard if the culture wasn’t where it should be and culture is huge
Tyler Martin: so those are great comments and it kind of moves us into like the whole culture people recruiting a topic that i wanted to touch on i get that the family has to be right but you know in the blue collar world and really any job, it’s not just blue collar, but you do tend to get sometimes
Tyler Martin: people, you know, I had a client yesterday, their best technician, highest performing technician
20:47Letting go of the top four who skipped the January meeting
Tyler Martin: has just the most sour, terrible personality. And I mean, I hear this a lot. It’s not, I’m just picking up a conversation. How do you deal with that? Like, I mean, how do you, you must have to, I imagine you’re not immune to it, even if culture strong,
Tyler Martin: do you just cut them out pretty quickly? They don’t fit or are you able to somehow manage to
Cody Martinez: that you know it’s the toughest thing ever because exactly what you said with them being your top guy and them being you know the revenue driver there has to come a time to where you’re going to either uh you got to do what’s right and you got to do what’s right for the company because there’s other
Cody Martinez: there’s however big the company is we’re 60 plus there’s 60 other people here depending on cowboys so if you’re going to jeopardize 60 other people’s lives for one person there has to be a time to where you sit down and you do what’s right and you got to make that tough decision.
Cody Martinez: And that’s where, you know, your leadership team, your management team, they got to be able to make those tough decisions. So I’ll give you another story. When my dad originally gave me, you know, the opportunity to run the office or run the sales department, whatever the case may be, we always have a meeting January 1st, big
Cody Martinez: meeting and a couple of guys actually are top four guys didn’t show up to the meeting. and uh i told my dad i was like hey like and at the time we were very small we were doing uh 4.8 at the time and uh i told my dad i was like hey like i know it’s scary and you know we’re big
Cody Martinez: believers in uh god and and stuff and i told him like there’s no way we’re gonna be able to grow with if we keep catering to these guys so he said do do what you need to do i let go of those guys
Cody Martinez: they’re all for bringing in the four million dollars that we were trying to uh scavenge for i hopped in a van my dad hopped in a van there is an installer that was begging begging begging to be a tech he hopped in a van um one of the guys did show up on time he was in his van and
Cody Martinez: then we had a real green kid come out of uh school he hopped in a van and uh i mean i just took the chance i remember to this day it’s pretty crazy because i remember that night i went home crying I was like man what the heck did I do
Cody Martinez: what did I do and like I said I’m a big believer in faith and Christ faith is actually one of our core values here and the next day or a couple days later I ended up getting my number one guy that’s here today
Cody Martinez: he’s been here five years he rolled in through our doors and he brought a couple other guys from his company and got some other guys that started applying online and that’s when we shot up to the 10 million and it was just a big
Cody Martinez: a big decision to make. And it was just trusting the process, you know, trusting the process and
Tyler Martin: making the right decision. So I want to get into that. I’m glad you brought that up. So I think this is like two more things on culture, because I think they are really symbolic of how you really actually breathe and live what you’re talking about. Regarding your top performer, can you
Tyler Martin: take us through that story? So I know it’s common sometimes when you’re driving in a wrapped vehicle, you’re often told, hey, park up front so everybody can see your vehicle. And I think one day you were going out to lunch. Can you take us through that story in terms of how, I think the attention to
24:01Dad’s U-turn into a Chili’s lot to recruit two A players
Tyler Martin: detail here is what stands out to me and how sometimes the littlest things that you can do
Cody Martinez: can have a dramatic effect on your long-term. Yeah. So I always knew that our family had something special, right? We always shoot everybody right. We always put everybody first. I mean, any of us would take our shirt off the back, off our back for anybody.
Cody Martinez: But I just knew we didn’t have the right people. And the minute, I’ll say his name, his name is Franco. The minute Franco walked in and I interviewed him, he was three plus million dollar producer at his previous company. And he explained to me how the owners and the other company didn’t treat him right.
Cody Martinez: And I knew that I was going to treat him right. I knew that everything he was looking for was what I had. And everything that he had is what I was looking for. So Franco came along and he brought some other people. So fast forward, still, like I’m telling you, my dad’s still trying to figure out what to do in the business.
Cody Martinez: He’s headed home one day from the office. And at the time, we had a couple of guys that we lost, a couple moved, whatever the case may be with the other guys. And we’re trying to figure out, man, we need some other A players.
Cody Martinez: I got to come into the company because, you know, we’re pushing for the 20 million. And we’re trying to figure out, man, like who else can we bring to the company that’s going to raise the bar even higher? My dad’s driving home. he sees there’s a company in town called champion ac they’re a pretty big company in town they’re
Cody Martinez: one of the private equity companies and he sees a couple of champion trucks you know sitting outside of a chile’s and uh he does a huge u-turn goes go turns around instead of going straight home walks into the building and he ends up uh bringing two of our a players that we have here
Cody Martinez: today and it’s funny i was actually talking to one one of them yesterday about it and he basically He told me that he would not be here if it wasn’t for my dad. And my dad was the realest person he’s ever met his whole life.
Cody Martinez: And the minute my dad spoke to them, he believed everything that he said. He believed in, you know, his goals, his vision, the future. And my dad ends up just going, stopping, just turning around, pops into the Chili’s. And so there was two brothers and a little brother.
Cody Martinez: I say a little brother, they’re like six months apart. He wasn’t getting an opportunity that he should have gotten where he was at, but the older brother was. So the little brother said, you know what? Heck yeah, I’ll jump on board. Older brother said, you know what? I’m doing too good over here. I’m good.
Cody Martinez: Little brother comes here, simply didn’t get the opportunity that he should have gotten. He’s actually one of our top guys today. He ends up doing amazing. He ends up performing at a really high level. And then on top of that, you know, being a part of our culture, loves where he’s at.
Cody Martinez: He starts to explain to his older brother, like, man, you can make the same money, probably more, but actually be happy where you’re at. Actually be part of something greater than, you know, basically what those other people are, you know, portraying to y’all.
Cody Martinez: And his older brother ends up coming. He was actually their top guy over there. And, you know, it took a big leap of faith for him to leave. But the company and our culture is what sold him.
Tyler Martin: Yeah. and um i mean just if my father didn’t stop that day those two guys wouldn’t be here so yeah i love the story too because like your dad stops i think he hands him their cards because they don’t really know him that or maybe know of him hands him he hands him his card and then
Tyler Martin: there’s two brothers and then you know one brother kind of takes the bait so to speak over a period of time i’m sure it didn’t happen instantly and then that buys the credibility of the high producing brother. Well, the one brother gets his opportunity now, and that buys the credibility
Tyler Martin: of the high producing brother, which by the way, is taking a leap of faith, willing to leave a high paying job to come to you guys, which says a lot about you guys that he’s willing to do that. I mean, that’s just such a cool story because
Tyler Martin: so many of us don’t do that turnaround and do a cold introduction to someone we don’t even know that theoretically is your competitor even, and could even be, you know, those guys are probably like giving you him a dirty look as he walked in at first.
Tyler Martin: Oh, yeah. You know, and so it’s just such a cool story. I think there’s so much to learn from that. Those little moments are what make the difference to get from 10 to 20 million, essentially.
Cody Martinez: Yeah, and I think it’s just, I know it’s a simple and silly word, but I think it’s just, you know, caring about the mission, you know? And my, everybody here cares. My father cares still to this day and he cared enough to stop and sit down
Cody Martinez: and have a genuine conversation with these guys. and then you know like i said they believed in everything that they said i’m i would say i’m a split split image of my dad i end up meeting these guys and they see the same energy and
Cody Martinez: the same uh realness to say um that my father had and you know it just everybody caring at the end of the day instead of just showing up for a paycheck and actually taking the extra step instead of just sitting in their office and waiting for people to talent to fall in their lap
Cody Martinez: if you care about where you’re going, you got to take those extra steps. And our owner, you know, I don’t call him dad here in the building, but our owner, you know, turned around and cared enough to stop. So yeah, it is a neat story.
Cody Martinez: It really, really is. It really is.
Tyler Martin: Do you still, I know you created recruiting cards or like business cards, but they’re recruiting cards.
29:19Recruiting cards and shaking 60 hands every morning
Tyler Martin: And I think you give them to staff and then there’s some type of commission or something. Do you still do that? And if so, how did that work?
Cody Martinez: Yeah, so we made some recruiting cards because of what my father did. And it’s kind of a little game now with our family. If I go to the gas station, my fiancé hates it. But instead of us being there for five minutes to get our energy drink, I’m there for an hour talking to every AC company I was there.
Cody Martinez: And it goes to show, though, because like you said, in the sales tech world, not a lot of guys want to bring talent over because they feel like they’re taking food from their plate. but every single one of our senior sales techs, they’re out trying to bring talent over to the company
Cody Martinez: because they understand, you know, the more talent we bring, the more we grow and everybody’s going to eat at the same dinner table at the end of the day. So it’s like, it’s part of the culture that we have here is that everybody’s not here just for themselves.
Cody Martinez: They understand, and it starts from my dad. They understand that this place is what’s going to essentially, hopefully retire a lot of people and people can sit here and say, this is the place where I do want to retire and finish my career
Cody Martinez: and be able to take care of their family. So we made little recruiting cards and even all of our top guys will try to bring other talent over here. So it’s just all about the culture at the end of the day and it’s about everybody believing
Cody Martinez: in what we do and what we say.
Tyler Martin: Yeah, that’s very cool. And then one last thing on this culture side of things, I understand you have 60 plus employees. Do you still, I believe at some point you shook the hands or you shake the hands of every employee. Do you still do that?
Tyler Martin: Is that a daily thing?
Cody Martinez: Every single morning, every single morning.
Tyler Martin: You literally go throughout the whole office shaking everyone’s hands?
Cody Martinez: Whole office. I’ll go to, we have a guy named here named Doug, call him Dougie. And all he does is clean our office, cleans the warehouse, cleans the toilets. And I go and shake every single person’s hand here because I want to let them know that I care about them.
Cody Martinez: I want to see how their morning’s going. And I also want to let them know it’s game time. You know, every single time we get here to the office, you know, we’re here for one mission and that’s for everybody to better their lives.
Cody Martinez: And I go shake every single person’s hand here just to let them know I’m here. We need to show up. You know, we need to get after the day. But more importantly, it’s just to let everybody know that I tell everybody good morning.
Cody Martinez: Every single person that walks out of here, I wait for the CSRs to leave at night by the door. And I tell everybody, good job today. And I just want to let everybody know that I’m not here for myself. I’m really here for everybody else here at the company.
Cody Martinez: And it may bite me later down the road in life, but I will put everybody first before myself. And I said earlier, when the day does come for me to lay down my head and take my last breath, hopefully I did change somebody’s life.
Cody Martinez: And that’s all that matters to me. I don’t care about myself, to be honest. I’m a real, I heard in church one time, the most selfish person is the man that doesn’t put people first before him. So the reason why I do that
Cody Martinez: is because I care about everybody else before myself because I’m here for them. I’m here to make sure that I give my 100% effort for them and their family.
Tyler Martin: Yeah, that’s very cool. I’ve got two other things I wanted to get into. One is you have a pretty competitive market for private equity. What does that look like? How do you guys compete with private equity? What do you think you do that allows you to set your guys’ self apart and people work with you?
Cody Martinez: When it comes to private equity, you know, a couple of years ago, when I very first started working in the office, I was all for selling because of the big, shiny trophy that you get at the end called money.
33:04Why private equity money loses to caring in San Antonio
Cody Martinez: and the more and more my dad kind of explained to me, you know, what the real purpose is of, you know, just simply being on this earth is to change people’s lives and to leave a legacy behind. And the biggest thing that for me is I’m afraid my name
Cody Martinez: is not going to mean anything. I want my name to at least mean something to somebody when I take my last breath. And when it comes to the private equity, a lot of these guys, you know, they have the money, they have big pockets,
Cody Martinez: but it comes down to the way you treat people. And if they’re not treating their people right at the company, they’re going to leave. And that’s going to reflect to the customer as well. If the people at the company aren’t being treated right,
Cody Martinez: what makes you think they’re going to go run through a brick wall for you? What makes you think they’re going to go take the extra step in taking care of the customer? What makes you think they’re going to go provide five-star service? They’re just trying to get home.
Cody Martinez: But a lot of our guys here, they care so much about what they do. and it sounds so cliche, but that’s the difference from us in a private equity is that we care about what we do every single day. We’re not trying to hit, I mean, of course we got to hit margins
Cody Martinez: and quotas and things like that. But if we go to a single mother and we know she’s down and we know she’s been going through a lot, because we’ll build that relationship to where people will pour their heart and soul out to our technicians and cry at the table sometimes. I’m not going to
Cody Martinez: sit here and say, oh, well, you can’t afford us, man. Who am I to not, you know, I know I have the power to take care of a need. I know I have the power to make somebody comfortable. So for me to walk away just because of money and just because she can’t afford us, that’s not who we are.
Cody Martinez: You know, I will make sure I take care of somebody, even if I have. And, you know, I always, I keep old units here that are working and people always ask me, hey, why don’t you throw them to the scrap? If we go to somebody’s house and they can’t pass credit and they don’t have money.
Cody Martinez: and I know, and my guys are real good judge of characters, obviously, but, and I know they need to be taken care of. And I know we tried everything we can possible to get approved on financing, wherever the case may be. My guys will call me that, hey, Cody,
Cody Martinez: man, we tried everything we could possible. These people need help. And they’ll tell me like, hey, do we have any units laying around at the house? I’ll come install myself. Don’t worry about paying the installers. I’ll go install myself. And I’ll tell them, you know, I’ll go install it with you
Cody Martinez: because we’re here to take care of people. That’s what we’re here to do. Yeah, the money’s good and all, but first and foremost, it just so happens that we do AC and heating, but we’re here to take care of people. And I think that’s what San Antonio is all about.
Cody Martinez: And I think that’s where a lot of these private equity guys kind of don’t really look at it. They think they can jump into every single market and just take it over. San Antonio is really big on loyalty, having each other’s back, showing up for each other.
Cody Martinez: San Antonio, it’s a big city, but it’s a really tight community. And I think a lot of these private equity guys think they can just come in here and just use their money to overtake. But at the end of the day, I get a lot of customers that call and say,
Cody Martinez: hey, we spent a lot of money with these private equity guys and they’re not treating us right. And they just took our money and ran. And it’s kind of crazy to hear that because like I said, there has to be more to it than just making money.
Cody Martinez: There’s more to life than just making money. And I think that’s, you know, I think that’s what the difference is between us and these private equity guys is that we know what to do. But the biggest thing with those guys, I told you I came in here, they they came here and they’re still here because we treat them right.
Cody Martinez: Yeah. And these private equity guys, if they found, you know, if I was them, I would probably I would probably make it a department of like, I don’t know, like a life improvement or culture department or something. to make sure that every single employee is happy.
Cody Martinez: Because yeah, they have the money. They can advertise everywhere. They got a thousand trucks flying around. But if they don’t have somebody that’s there that actually cares about the people and they’re involved in everybody’s life, people are gonna get fed up and they’re gonna leave,
Cody Martinez: even if the money is great. So I think the biggest thing, like I said, it sounds cliche, but we care about what we do. Yeah.
Tyler Martin: It’s tough though. You can’t fabricate culture. Like you can’t, you can’t just make it up and say, I’m gonna have a great culture. It’s kind of in your DNA. Like it’s what you really are. And so I, and I’m not picking on private equity.
Tyler Martin: It’s companies in general. Like sometimes you’ll find companies try to really focus on culture and say they are, but it’s just hollow. Like you can, you know, they might have a pretty break room or whatever, but you can see it’s hollow. Like their turnover tells them it’s hollow.
Tyler Martin: Their reviews, their customer retention, all their employee retention. And so it’s something that, to your point, like it starts from the heart to some degree. You got to really care about it’s bigger than money. It’s bigger than giving the appearance of a good culture.
Tyler Martin: It’s really about in tough times doing the right thing. Definitely. So I’m with you. It’s a big deal. I mean, there’s a mindset there that’s a lot deeper than just wanting to do it.
Cody Martinez: Yeah. And, you know, like you said, I’m not picking on them either. But if some people just took the time to ask how some of these days going, instead of telling them, go sell another unit, I think it would change a lot for these private equity guys.
Cody Martinez: And I feel like if they do have the money, I feel like if they focused more on having somebody there that protected the culture and cared about everybody, their turnover rate wouldn’t be so high. And, you know, I think with the money they have to back up, you know, I think it would be a good thing, but they’re kind of missing that whole, simply just having a genuine, you know, conversation with their people and caring about, you know, caring about them.
Tyler Martin: Good stuff. Okay. So last thing I want to talk about a little bit is just margins and whatever you’re open to sharing. What do you guys try to target in terms of margins? Like, do you have any general, are you trying to be at a certain spot for like gross profit margin company-wide, net profit margin?
39:01Targeting 50-55% on replacements and 65-70% on repairs
Tyler Martin: What do you guys look at? What’s important to you?
Cody Martinez: Yeah. So when it comes to like system replacements, we want to be anywhere from 50 to 55%. When it comes to repairs, we want to be anywhere from 65 to 70. You know, the toughest thing, and it’s kind of a double-edged sword. We’re over here talking about culture a lot.
Cody Martinez: But if the company is not making the right margins, there won’t be no company. So a lot of our guys understand that we got to take care of the company. We got to take care of the margins. It is a big deal because if you just forget about it, essentially there could be one person in the company that can be a margin killer and they can take the whole company.
Cody Martinez: And at the end of the year, you won’t realize that there’s no money in the bank and it’ll be too late. So it’s really a big deal. and it’s even more of a big deal for us now. I’m kind of not chasing the top line anymore,
Cody Martinez: the 20, 30 million. I’m more chasing the margins because I understand the margins being there. That’s what’s going to grow the company and that’s what’s going to change people’s lives. The more money that’s in the bank, we’re able to give more bonuses or be able to do special things in people’s lives
Cody Martinez: and be able to take care of people past what they can ever imagine. But the money has to be there. So when it comes to the margins, that’s kind of like my biggest thing now. And like I was talking about recruiting earlier, I have, I know you said don’t say names,
Cody Martinez: so it’s hard for me to say, but I had this guy that’s been working here this past month and he’s been really big on margins. So being able to pick his brain and being able for him to hold my feet to the fire as well.
Cody Martinez: Because these past couple of years, I was worried about sales, sales, sales, sales, sales and get the 20 million and get the 20 million. But at the end of the day, if we’re getting into the 20 million and not retaining nothing, there’s no point of it. We’re just
Cody Martinez: killing ourselves and doing busy work for really nothing. So the margins are really important, not necessarily for the company. I look past it. I want the margins to be there so I am able to change people’s lives and be able to do different things for our employees here.
Cody Martinez: So when it comes to margins, the gentleman I’m talking about, that’s…
Tyler Martin: Is that your new CFO? Because you mentioned this last time. You’re welcome to say his name if you want to. I don’t mind.
Cody Martinez: No, he’s not our CFO, but he’s going to be our assistant general manager. And he’s going to be our marketing director. And his name is Dan.
Tyler Martin: Dan, okay.
Cody Martinez: Yeah, his name is Dan. Man, he brings a totally new, different structure to the company like I’ve never seen before. But it also goes back to being family-owned for so many years. and our main focus is to be family-owned but professionally operated. There’s a difference from being family-owned and family-operated.
Cody Martinez: So being family-owned and professionally operated, that’s where Dan comes in. And he’s bringing a whole different structure to the company to where I’ll even sit back and say that I would have never been able to bring to the company myself. And that’s part of the recruiting process and understanding there is a time to step back
Cody Martinez: and hiring the right people to get us to the next level because whoever got us to 10 to 20 isn’t going to get us to 30, 40, 50. Honestly, my goal is to get towards 50 without private equity. That’s what my goal is.
Cody Martinez: And I know it sounds crazy, but I’m crazy. I’m willing to try. The last thing I want to do is not be able to say that I didn’t try. I at least want to say that I tried and did the best I can,
Cody Martinez: But that’s putting the right people in the right place. And when it comes to family owned and professionally operated, the family’s there and it’s owned by family. But Dan brings in the professionally operated part. And all the other guys that came here, Franco, Charlie, Robert, Art, Darren, Tyler, you know, these guys are coming from big private equity.
Cody Martinez: And all these guys came from private equity and they’re coming to a family owned company. And these guys are bringing in things that I’ve never seen before. Sales processes and all sorts of stuff. and you know that’s me putting my ego inside and and letting these guys you know speak at our
Cody Martinez: meetings and not putting them down and not trying to act like i know everything and you know bringing these people in is what is changing the business today so the family owned and professionally
Tyler Martin: operated and that’s what i’m gonna live and die by for a good while that’s awesome okay in terms of wrapping up i got one thing i want to ask you so a lot of times i’ll have uh potential new clients come to me and they’re probably somewhere around four to six million a year in revenue.
Tyler Martin: And they’re kind of stuck. Their margins are mediocre. Their net profit’s mediocre. And I understand each one might have their own challenges. But when you hear that, I’d love to know if a few things could come to your mind, like, hey, this is what I would, because you’re
Tyler Martin: a guy that’s done it now, got past that threshold by quite a bit. What are some things you should look at in your business that’s going to get you over that hump?
Cody Martinez: The margin thing is being okay to walk away from a job or whatever the case you want to call it. That’s not going to benefit the company. That was a big thing for me early on is that a lot of these companies in town, we have a company in town that’s advertising $5,000 for a complete system with a 10-year-old parts of labor and maintenance.
Cody Martinez: It’s like, man, you’re not going to be able to keep the doors open. And if you go for the dollar, a lot of people aren’t going to have a job because the doors won’t be open. So understanding that it’s okay to walk away is a big thing that I’ve had to internalize.
Cody Martinez: And it’s still tough with me today. I’m still trying. It’s hard for me to walk away. But I would say that the call-by-call management is a game changer. That’s the one thing that I would love to stress about the most is don’t just let anybody dispatch your calls.
Cody Martinez: You’ve got to have somebody that’s really going to dig deep on the calls, go the extra mile, build a relationship over the phone with the customer. Because the thing is, is that we want to let that customer know that we’re sending in the
Cody Martinez: best person to do this job. That we would send this person to our grandma’s house or my mother’s house or this guy is the guy for the job. So the call-by-call management is literally, I would say between the four and six million, If anybody’s stuck there, that’s the number one thing you want to go look at is you want to figure out who’s dispatching your calls because you can’t just let them dispatch it and walk away.
Cody Martinez: You’ve got to be so in depth with those calls because our, of course, the main goal is to get past the four to six million, right? The call by call management is huge. And it starts all the way from, because a lot of companies do call by call management, but we’re talking about the end of it.
Cody Martinez: The beginning of it is the dispatch, taking in the call, taking that next step to call the customer and get more information from them, make that genuine relationship. So if anybody’s trying to get out of the four to six million, I’m open, but they can call me.
Cody Martinez: I think we’re going to put my LinkedIn on here later. They can message me on LinkedIn, but I’m an open book. I’m willing to share whatever ideas or whatever experience I have. But the call-by-call management is huge. And then from there, when it comes to margins, you know, that’s just, you know, drawing the line and, you know, not stepping over that line.
Cody Martinez: If you want to hold your margins to a certain extent or to a certain spot, you got to draw a line. And now where we’re at today, Dan, that is going to be his main thing. We’re going to split up a lot of stuff, me and him, what I’m really excited for.
Cody Martinez: But his main thing is going to make sure our margins are there. And if our margins are right, he’s going to come knock out my door. and some of these are to hold me accountable. So, you know, just draw, the margins, just draw on your line,
Cody Martinez: draw on your line, making sure you don’t cross it. And the thing is too, is like, we got to understand like what the customers, what the customers want, you know? Not selling things that they don’t need or selling things that aren’t going to benefit them.
Cody Martinez: Because a lot of the times, you know, if we’re talking about a complete system package, not everybody cares about IAQ. Not everybody cares about duct cleaning. You know, some people just want just the system, something to turn on and turn off. So if you’re offering everything at a discounted price and the
Cody Martinez: customer doesn’t even want it, you’re kind of shooting yourself in the foot. So being able to really sit down with the customer, having a genuine conversation, figuring out what their pain points and what their needs are, drawing the line when it comes to margins and call by call
Cody Martinez: management is huge. It is the biggest thing that I can say between the four and six million. Past the six million, once you get the 10, 15 and so on, I would say it’s putting the right people in the right spot, bringing the right people
Cody Martinez: into the company, taking a step back and realizing, hey, you’re not going to be the one that’s going to get you to the 20, the 30, whatever the case may be. Leadership team, that definitely starts to play in there.
Tyler Martin: Yeah, that makes sense. Okay, a couple things here as we wrap up. That’s awesome info you just gave. So your LinkedIn link I’ll put in the show notes. Cody Martinez, first and last name. I’m sure people can find you if they want to search.
Tyler Martin: You’re with CowboysAC.com is your business website. CowboysAC.com. It’s Cowboys Air Conditioning and Heating in San Antonio. Cody, you are amazing. I mean, you, in fact, your whole family, as I imagine, I’d love to someday, if I’m ever out in your way, I’d probably go out of my way to try to meet you guys because you’re
Tyler Martin: all just, you sound like you’re just a really tight knit, very high values. You care about your employees. You care about your customers. You don’t, and you live it. It feels like you live it. It doesn’t feel like something that’s printed on a card or something that’s posted to a
Tyler Martin: refrigerator, but you don’t actually live it. And I think, dude, it’s just amazing to hear a company and a guy like you. It’s really cool.
Cody Martinez: I appreciate it. And if you’re ever in town, don’t get a hotel. Don’t think about buying dinner. I’ll take care of all that for you. I got an extra bedroom. I’ll take care of your stay. I’ll take care of everything. If you’re ever in town, it’d be my pleasure.
Cody Martinez: It’d be my pleasure to shake your hand. I really will. Because I appreciate it. You’re the first person that’s ever given me an opportunity to speak out. So I’ll remember this forever. And I really appreciate it from the bottom of my heart. I really do.
Tyler Martin: And on that note, if there is anyone out there listening that has a podcast, I’d be happy to connect you with Cody. His story is just fabulous. I felt like we just touched a very fraction. You were kind enough to come on to one of my client’s board meetings, and you were sick,
Tyler Martin: and you had a bad cold, and you spent, I don’t know, did we talk for two hours or was it 90 minutes? But I mean, it was long. It was a marathon. It was long. And you told your whole story. You went through slide by slide.
Tyler Martin: It was raw. It was real. Just what a gift you gave to us. And I appreciate you replicating that here. It was a really cool conversation. I hope we do get a chance to talk again in the future, Cody.
Cody Martinez: We will. And thank you again. Like I said, I can’t put in words. You know, it means the bottom of my heart you gave me this opportunity. I don’t want to cry right now, but my family deserves to be able to speak. someone speak their story. So you doing this for us, it means a lot. It really does.
Tyler Martin: Thanks, man. Take care. Okay. Yes, sir. Thank you for having me. So my biggest takeaway with this conversation with Cody is getting to that $20 million mark isn’t about being louder. It’s about being tighter. They didn’t scale because they found some secret marketing hack. They scaled because they treated the phone like revenue, not admin,
Tyler Martin: but matching the right tech to the right call, game planning the job, and staying involved all the way through. And the culture piece isn’t posters on the wall. It’s standards, shaking every employee’s hand, recruiting like it’s everyone’s job, and being willing to cut a top
Tyler Martin: producer if they poison the team. Then there’s the CFO part. Cody focuses on margins, 50 to 55% on replacements, 65 to 70% on repairs. Don’t get too much into those percentages because everybody calculates them a little bit differently, but it is exactly how you keep growth from turning into
Tyler Martin: busy work, is really looking at your numbers, looking at your margins, looking at your gross profit margins, your net operating margins. These are really critical metrics in the game of business. Cody did a masterful job of it. Him and his family have done a masterful job on it.
Tyler Martin: So, hey, if you want help turning operational discipline into real profit, better margins, cleaner cash flow, and KPIs you can trust, you can book a no pressure intro call at cfointrocall.com. That’s cfointrocall.com. Or check out cfomadeeasy.com. That’s my website, cfomadeeasy.com. As always, thank you for listening. I’ll see you on the next episode.
Related Episodes
- From Family HVAC Shop To Scalable Company – Ray Isaac
- The $3M to $6M Growth Trap for Home Service Businesses – Janeen Norquist
- Scaling a Family Trade Business Without Losing the Culture – Chris Mazzini
- Thinking Too Small Is Costing You Millions – Alyssa Rogers
Tyler Martin works with owners on the numbers behind these stories: a fractional CFO for HVAC contractors.
