The Real Reason Home Service Companies Run Out of Cash – Stephanie Allen

00:00Kevin fired for refusing to sell a system she didn’t need

Stephanie Allen: We are now focused a lot more on cash than on margin. Margin’s important, but if there’s zero cash coming in, then it doesn’t matter what those margins are.

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. Here’s your host, the blue collar CFO, Tyler Martin. So I got a question

Tyler Martin: for you. What do you do when the summer you were counting on never shows up? Cash gets tight and the business you built suddenly exposes the gaps you thought were already handled. My conversation today is with Stephanie Allen, CEO of Airworks Solution. It’s an HVAC and plumbing company in

Tyler Martin: Southern California. Stephanie and her husband built Airworks after seeing what happens when sales pressure gets put ahead of doing the right thing for the customer. 16 years later, they built a company around trust, relationships, and a family-run, mom-approved brand. But this episode also gets into one of their toughest years, why cash became the number they watched

Tyler Martin: most closely, how they rebuild systems, and what it really takes to step out of the way so your team can grow without losing the human side of the business. Let’s chat with Stephanie now. Hey, Stephanie, welcome to the Profit and Grit Show. How are you doing?

Stephanie Allen: So good. How are you?

Tyler Martin: I’m doing really good, too. I’m excited to have you. Excited to have our conversation. Yeah, me too. Thank you for having me.

Stephanie Allen: So I want to start with learning a little bit more about you. Can you share what you’re doing now these days professionally, and then maybe just

Tyler Martin: something personally? Sure. My husband and I have an HVAC and plumbing business in Southern California called Airwork Solutions. And so I am the CEO of that. It takes up most of my time. I have started traveling a bit more, speaking on the circuit, bringing some awareness to AI in the

Stephanie Allen: trades and collaboration in the trades. Very cool. How about on a personal note? On a personal note, I have four kids, 10 and under. Four kids. Wow. That’s a handful. Yeah. Run into business and a whole family. So you got like two businesses.

Stephanie Allen: Yes. Awesome. So, Hey, I want to get to your story. Just the origin story. You actually by trade are an attorney. I believe you were an entertainment attorney at one point.

Tyler Martin: I dabbled in entertainment law because my uncle was an entertainment attorney. My background, I’m a JD and MBA. So it was mostly business. Yeah. That’s really impressive. And your husband was a technician. And as I understand it, your husband was working somewhere and there was kind of a falling out.

Tyler Martin: Like he ethically had a different opinion on how ownership wanted to handle something. And whether it was voluntarily or they just had a parting of ways, he left.

02:59Law school, a failed carpet business, a contractor license

Tyler Martin: And that led you guys into starting eventually your own shop. Can you kind of take me through that story? Like, how do you get there?

Stephanie Allen: Sure. Out of high school, Kevin started working with his best friend’s dad in commercial HVAC. He knew that he was mechanical and wanted to work with his hands. He thought he was going to end up going to be an auto mechanic, but he fell in love with

Stephanie Allen: the trade. And so he stayed. That was 2002. In 2007, when I was admitted to law school in the University of Alabama, I did the whole if you love me, you’ll come. And his company had actually gone through an ownership change. And he realized it’s not just what you do, but it’s who you do it with that matters.

Stephanie Allen: And so he said, yes. I said, I’m not ready. So I moved without him. And then by Christmas, we decided that we needed to buy a home together and be together because the long distance was hard. So at that point, I actually got him a job with a residential HVAC company that did the inspection for our home.

Stephanie Allen: So sight unseen, they hired this kid from California. And Kevin went in and he learned a lot about doing residential HVAC there. He learned that he didn’t love being in people’s homes in the South. And, you know, it was a whole different culture.

Stephanie Allen: I was going to school. I was busy. He actually left HVAC and moved to Texas to start a carpet cleaning business with a friend. We lost $40,000 and a best friend in the process and he came home. So he started working for a couple of different HVAC companies. He was doing some remote work

Stephanie Allen: where he would leave for four days a week. I’d pack him lunches, he’d come back. And he ended up with this company in town that one week said, if you don’t sell this lady a system, you won’t have a job on Monday. And she didn’t need a system. She needed a part. She needed a

Stephanie Allen: capacitor. So at that point, we basically knew that we wanted to work with people. We wanted to build a company that we would want to work for. And so in my third year of law school, I bought Kevin the contractor state license guide for California. And he studied that while he was

Tyler Martin: on the road. Wow. And then at what point do you say, Hey, I’m going to go in a different direction. I’m going to start my own shop. I mean, that must’ve been a pretty big decision because all your education, MBA, JD, and then you decide to kind of go in a different direction. Well,

Stephanie Allen: I wasn’t planning on it being my career. It was just going to be Kevin’s career. So we started the company together. I designed the first logo on my laptop in the living room. We launched, I did all the things that I could that were free, Wix websites.

Stephanie Allen: We, when we got back to town, so we moved back to the town that we grew up in where we went to high school. We knew that we wanted to raise our family with family. And so we joined all the B&Is and the local chamber

Stephanie Allen: and we would volunteer at those events because we couldn’t afford the tickets to go. So we’d get the VIP wristband because we were pouring the wine, not because we paid for it. What was the question? When did we decide to go out on our own?

Tyler Martin: I find your story fascinating because you’d really, you like in the direction of, like you said, it wasn’t your, you weren’t originally thinking, hey, you were going to run Kevin’s business. And now you’ve kind of gone in that direction. So I’m just curious, like, what did that look like?

Stephanie Allen: No, it’s ours. It is definitely ours. And even though he is not on the logo, he came up with the conception of it. So, you know, we’ll go through that. I always played a part in it. I was the CEO of an internet

Stephanie Allen: startup. I worked for a transportation company in town as their in-house counsel. And I did a few things, but I was always, I always had a bat phone with me that I could answer the lines. I was advising, I was doing the accounting at night, et cetera. But Kevin and I are better together.

Stephanie Allen: And that’s our keystone value at Airworks. It’s we truly believe in the power of humans and that we’re better together. So Kevin has a different skillset than I have. And he wasn’t a complete operator without me. And there is no way that I could do this business without him.

Stephanie Allen: I tell him I can’t all the time and I try to fire him off. Of course, you have to. But I couldn’t do it without someone with his skillset for sure. But he has so many unique geniuses that I couldn’t replace just with a…

Stephanie Allen: technical guru. And so the two of us fit really well together. And we just realized if we wanted

Tyler Martin: to go fast and build something, it was together. Was there ever a period for you that like in your

07:30Designing the business around their life, not the reverse

Tyler Martin: first six months, let’s say when you went in this direction, where you questioned, hey, I’m going in a whole different direction professionally. Did you question that? Or

Stephanie Allen: has it always been like, hey, this is the right move? You know, I never wanted to practice law in a billable hour. So I was always a little bit more unique than that. I was working working for a real estate investment firm. I actually had started with them when I was 21.

Stephanie Allen: I was the executive assistant to the president. And then when I went to law school, they didn’t want me to go. They tried to talk me out of it because they wanted me to stay with them. And when I came back, eventually, when I was looking for something part-time,

Stephanie Allen: they offered me a position. So I was doing both. I was working as in-house counsel for them and Airworks. When I was pregnant with my second, I let them know that I’d be going on maternity leave and Airworks was ramping up. It was a very friendly mutual agreement that they needed more

Stephanie Allen: time and I needed out. So I never really, I don’t feel like I ever left that career abruptly or made a big decision. Life made that decision for me. And you’ll see in our revenue pattern in our business, kind of when family took the lead and when business took the lead and those, it ebbs

Stephanie Allen: flows. So my, our second was born in 2018. I was very present with both girls doing mommy and me classes and really being a part of their life. Our business has run out of every room of our house and our back house. And now it’s 10 doors from us at my in-laws. So I can walk there. It’s,

Stephanie Allen: we’ve designed the business around our life instead of designing our life around the business. Yeah.

Tyler Martin: So going back to Kevin, refusing basically to sell someone a system that didn’t need it. How would you say that’s defined how you run Airworks now? Like what, because that’s a revenue decision, right? Like it’s easy to just try to talk someone to selling us, you know,

Tyler Martin: whatever the system is, 10,040, whatever it is. You’re making a revenue decision by not doing that, but you’re also doing the right thing if they don’t need one. How’s that kind of framed how you run Airworks?

Stephanie Allen: Yeah, we believe in the lifetime value of the customer. We’re in this for the long game. So it’s not a one and done scenario ever.

09:45Lifetime value over the $29 tune-up close

Stephanie Allen: We’ve been in business now 16 years and we’re starting to do replacements on installs that we did 16 years ago. At the same point, we’re finally getting the installs that we repaired, you know, eight to 10 years ago when they probably should have done the install then,

Stephanie Allen: but we kind of band-aided it along from them. We’ve learned a lot along the way about educating the homeowner on their options and about efficiency and about equipment. That’s really our belief is it’s our job to inform and educate. It’s their job to decide what they want to do.

Stephanie Allen: So if a homeowner decides they want to repair, great, we’ll do the best repair possible. If they decide they want to replace, we’ll replace for them and we’ll give them the pros and cons of both. Right now with the economy, we’re seeing repairs again.

Stephanie Allen: where a few years ago, we were doing a lot more replacements. So we’re able to weather these economic changes because of our values.

Tyler Martin: What do you think about, you know, there’s some people on the internet, I’m not going to name names because that’s not important, but they’re very, very visible on the whole, you know, $29 tune-up, $49 tune-up. And basically, you don’t leave without a sale type mentality.

Tyler Martin: A lot of times it’s trying to sell them a system. One, do you compete with that in your area where you see that happening? And then two, if you’re open to sharing it, how do you feel about that? Obviously, that’s not your guys’ ethos

Tyler Martin: of how you treat clients. How do you feel about it?

Stephanie Allen: I mean, there are loss leaders. Yeah. Right, and how low you’re willing to go is really up to you. Even now on our membership plan, we do free diagnostics. Okay. Because I know a member, if they call me because it’s broken, there’s going to be a repair there generally, but I want them to call me. And if there’s not a repair,

Stephanie Allen: we’ll move on. And then they’ll call me when there is. So again, it’s lifetime value. How do I feel about the low? We’ve tried it, you know, and in the last 16 years, when we started, it was just Kevin and I. And so we were very relational because we had to be, it was all about relationships.

Stephanie Allen: right? And then in the last several years, as we lifted our head up and we looked around and we paid attention to what the industry was doing, and we really started watching our KPIs and watching our numbers, we became more transactional than I’m proud of. And so I think we’re going to

Stephanie Allen: get into the fall of 25, but it’s really shifted our mindset back to our special value is that we’re a relational company. We create these relationships that should last a lifetime. We’re in our hometown. Our reputation is important to us. So if $29 gets you in the door because you

Stephanie Allen: have a price conscious purchaser, for me, fine. But then I’m going to treat them ethically and inform and educate. And I’ll stand behind whatever that offer was and then tell them the rest. My team gets paid a nice hourly. There is a little bit of performance pay in there,

Stephanie Allen: but the performance pay doesn’t mean they can put food on the table or they can’t. So I think as long as your incentives are aligned, then you can make it work.

Tyler Martin: Do you struggle with just talking about incentive plans? I had someone on my show recently and she said the problem she had with incentive plans and they really struggle with it is they don’t want their employees to feel like to do something, they have to get something.

Tyler Martin: They want them to do it for the good of the company, or they want them to do it as part

13:27Profit units for every employee instead of equity

Tyler Martin: of the culture. And it sounds like maybe, I don’t know if that was by design, the fact that your performance plan is small, but it’s not going to necessarily pay their bills. Was that by design so that you’re still really pushing culture first?

Tyler Martin: And the SPF is more of just a small incentive. of, so it doesn’t, I don’t want to say misalign them, but the, you can stay focused on what the

Stephanie Allen: culture is as a whole. Yeah. But I also profit share with a hundred percent of my employees. Oh, wow. Okay. So it doesn’t benefit them for getting huge commissions if we have no profit at the end of the year. So this year we rolled out profit units to everyone and it helps create

Stephanie Allen: this feeling of ownership. So basically I shouldn’t be the one pointing out a dirty truck, right? Everyone points them out now. Everyone points out waste on a job. Everyone points out mismanagement of an install, for instance, because everyone cares. And so that’s really

Tyler Martin: what we’re trying to do here is create a culture of caring. So Stephanie, and feel free to share up to the level you’re comfortable. On this profit sharing plan that you’re doing, how have you structured it in terms of like, have you made a conscious decision? Hey, we’re going to share.

Tyler Martin: I had Dustin Marks on the show and he does 50% to his plumbers. Do you have any certain percentage that you guys are going to say, this is how much profit as a whole we’re going to share? What’s that look like up to the level you’re comfortable?

Stephanie Allen: I have to review exactly. I think it’s like 41% over a particular profit margin. Wow.

Tyler Martin: It goes back into the holding company. Very cool. It goes back into the team company.

Stephanie Allen: And is everybody eligible for that? Or is there just, Is there a certain level in terms of who gets to participate?

Tyler Martin: You have to be an employee on March 31st of this year. That’s it. So there’s a vesting. Wow, very cool. Okay, cool. That’s good.

Stephanie Allen: And do you feel adding that, has that made any type of change? Do you guys feel like, hey, this is a great decision for the team as a whole? I do.

Tyler Martin: I want people to understand that they can build careers here. and the level that they put in, they’ll be able to get out. I don’t believe in giving equity in a company that might not sell. It feels like smoke and mirrors and a bait and switch.

Tyler Martin: So, you know, everyone talks about giving your team equity for buy-in, but I don’t have an exit plan on the roadmap. So I don’t think that it’s fair to incentivize the team with equity in that scenario. Yeah, that makes a lot of sense.

Tyler Martin: Okay, good stuff. Thanks for sharing that, by the way.

Stephanie Allen: So I want to move into it. I want to meet Dustin Marks for sure. I’m a big fan. I’ve been following him for a minute. He is so awesome, man. He’s on my show. He’s already introduced me to someone that’s going to be on my show.

Stephanie Allen: And it was just, he’s such a cool guy. He’s so legit. He’s amazing. I mean, I don’t know if you follow his LinkedIn. He had a post the other day. He talked about someone that, in fact, I don’t know if it’s appropriate, but I’d be happy to introduce you.

Stephanie Allen: What I love about him, he posted something that said he met this, I don’t remember the guy’s name, but he has a much larger shop. And the guy actually, they’re in their same playing field, same area.

Tyler Martin: Yeah, he put a picture of the shop up. Yeah, yeah. And the guy invited him over and took him to the shop. I mean, that’s how cool this industry is. Like people just, I mean, they’re fighting for the same. Yeah, can be. Good point.

Tyler Martin: But a lot of people are, though, I will tell you, more than other industries, I would say. Anyway, I’m getting off on a tangent. I want to talk about your branding because I think it’s huge. So you guys have a family-run, mom-approved type of moniker,

Tyler Martin: and it’s really taken off in your area. And I think it’s so cool that I just want to talk about,

17:05How family run mom approved came out of a Clover session

Tyler Martin: like, how did you come up with that branding? How important is it to your ID? Those types of questions. I’d love for you to talk about that.

Stephanie Allen: It’s interesting that you’re asking that because we’re reevaluating right now too. But the origin story is that we were working with a company called Clover Marketing, Josh Kelly.

Tyler Martin: Yeah, I had her, Laura Kelly on my podcast. Adore Laura. Think the world of Josh. Amazing.

Stephanie Allen: They made a big imprint in the beginning of Airworks story. Well, Josh had asked us like, what’s your USP? Unique Selling Proposition. And we were going through all the same stuff where, you know, we have great integrity. We’ve got great workmanship. We’re loyal, yada, yada, yada.

Stephanie Allen: And he’s like, boring. So we’re sitting in the conference room and really our tagline came from a pain point. Kevin had said, well, nothing gets approved without Stephanie approving it. Right. And Kevin was the one that came up with the, what about family run mom approved?

Stephanie Allen: And Josh said, I love it. But that means Stephanie’s face is going to be everywhere. Are you ready for that stuff? And I said, no, no, I’m the number two person here. I’m behind the scenes. Kevin is the face man. He’s friendly. Everybody loves Kevin.

Stephanie Allen: Kevin can go anywhere and make friends. You can hear his voice everywhere. He’s always happy. Like nobody wants me. and it didn’t matter. So we did a, we did a photo shoot. Kevin was actually in the photo shoot. And I think Josh advised Dan Antonelli to just cut him out of the final logo.

Stephanie Allen: That is hilarious. Oh, it’s just me and our girls. I’m actually nine months pregnant in that picture. And I, I said, Josh, let’s just wait. The baby’s coming and then I’ll be, I’ll be thinner. And he said, you don’t want to be that pretty in the picture. And two kids makes you look

Tyler Martin: capable. Three makes you look crazy. Oh, thanks, Josh. So why are you considering maybe going away

Stephanie Allen: from that? I’m really scared about the economy right now. Okay. And we are going to be diversifying

19:05Diversifying into commercial and getting woman-owned certified

Stephanie Allen: into more commercial work. I don’t think that the logo relates as well on the commercial side. Chances are, we’ll probably just be dropping the top picture. We use the badge quite often. the new website has more of that badge rather than the picture. So, you know, and as we diversify

Stephanie Allen: into some other, other forms of business, it’s just, does it fit? Where does it fit? That being said, our values are deep on the mom approved. What does it mean to be a mom approved technician? What does it mean to give mom approved service? What is the Airworks way?

Tyler Martin: And those things won’t change. Okay. So a lot of times people say, Hey, construction, lower margin, you have to carry capital longer because you get paid slower. Any reason why you’re going in that direction? Is it just because residential right now with the economy is not quite as good as it’s been?

Tyler Martin: Because I hear this a lot, by the way, so all throughout the nation. Is that kind of the reason?

Stephanie Allen: So we live in Southern California in a climate that’s almost perfect, right? Most of the homes in our town don’t have air conditioning. We’re adding air conditioning. It’s a luxury here. It’s not a necessity. I am also in a bedroom community. I’m very involved in AI and I’m not disillusioned by the fact that a lot of the people in my

Stephanie Allen: community are going to lose their jobs. If that happens, if the two income households go down to one income, they are not going to choose services like HVAC, perhaps plumbing as a necessity, but I’m trying to prepare for that. And so we’re diversifying for that purpose.

Stephanie Allen: We’ve always done some commercial. It’s Kevin’s background. when you start a small business, in law, they call it door law. Whatever walks in the door is what you practice. Same kind of thing, right? In HVAC and plumbing, we’ll just take whatever job we can.

Stephanie Allen: We have focused on residential primarily in the last five years. And so that has definitely grown our business. Like when COVID hit, commercial saved us. And so we’ve always had a couple of commercial techs. I’m just going to lean into it more Because the more that people are leaning into AI, the more I feel like they will invest in their data infrastructure.

Stephanie Allen: We are also actually becoming certified to be woman-owned because I want to be able to go after the municipalities. And it wasn’t important to us before, but now we think that it’s a way to keep revenue coming in. Yeah.

Tyler Martin: I love that I asked you that question because it’s so strategic when I hear your answer. Like I, you know, just the fact that you’re, because really you’re thinking five to 10 years ahead in terms of how.

Stephanie Allen: I hope it’s five years. Yeah.

Tyler Martin: I mean, just in terms of who knows for sure. Right. But I agree with you. There’s going to be an evolution of some, to some degree because of AI and definitely is going to affect areas differently. And so it’s cool that you guys are kind of thinking of that way.

Tyler Martin: and it’s sad. The sad part is I love the mother approved so much because I feel like that just like embodies what you want people to think about when you have people coming into your home to do work. Just that whole mother approved what it thinks in my mind

Tyler Martin: in terms of, you know, trust, integrity, all that other stuff. So it’s cool. I appreciate that. Okay, so that’s good. In terms of the brand, so I guess if you did kind of facelift the branding a little bit, what would you guys be considering?

Tyler Martin: Is it a little bit more generic if it was more leaning into commercial? Or are you guys trying to think of a moniker that fits across the board?

Stephanie Allen: No, we just literally remove the mom and girls from the top of the logo.

Tyler Martin: Okay. So we’ll keep the same branding. And we’ll probably have trucks running both around town. And we’ll do some A-B testing. Got it. Very cool. Okay. Now I want to talk about people, culture, just your technician pipeline. You know, a lot of times as businesses start to scale, finding technicians, keeping good people can be really hard.

23:03Getting out of the way and what the ride-alongs exposed

Tyler Martin: And I know I’ve been researching you. One of the things I learned about you is you saying, hey, getting out of the way was one thing you wanted to do so the team could grow. Could you talk about that a little bit?

Stephanie Allen: Yeah, there’s been evolution of that, too. We’ve learned a lot in the process. So last, a couple of years ago, we were growing like gangbusters and we really, we brought in a good leadership team, overstaffed probably. We were building this like incredible infrastructure.

Stephanie Allen: And in the end of 2024, we did the whole EOS system. We did some other leadership training. We did this really robust budget. And I figured out that I didn’t equip my team with the right business gut and the ability to pivot fast enough. So in 2025, we overspent in Q1,

Stephanie Allen: we overspent in Q2. I was like, it’s okay, we’re going to recover in Q3. Well, Q3 was the summer that never came in 2025, Southern California. So we had a really hard 2025 year. It caused us to do a lot. Like Kevin and I got back involved, rolled up our sleeves, really went to work.

Stephanie Allen: We cut a lot of expenses. We created a lot of systems. We made a lot of things efficient. You know, they say the enemy of great is good. So like we were good for so long that we got lazy. And so we had to go back to work. And now I’m back out of the way. So I told my team towards

Stephanie Allen: the end of the year when things really started ramping up, we were seeing a lot of leads. I had a really strong team that I felt confident in. I said, come March, I’m probably not going to be around so much. And I traveled a lot in March. We had the biggest Q1 that we’ve ever had,

Stephanie Allen: the biggest March we’ve ever had. And it’s not just revenue, we were profitable. and I was gone a lot in May as well. Every time I leave, I find new gaps in the business. And so then I get to go to work in those gaps

Stephanie Allen: when I come back. The daily operations, I’m not a part of anymore. I’m aware of them. And I talk to my leadership team a lot. I cheerlead everybody else. And I get the opportunity to ride alongs. So I’m in the field. I ride along with the technicians, things that sometimes the managers don’t always have time for, but I can see them and then I can problem solve kind of across the entire company and figure out what my priorities are and how to move them.

Stephanie Allen: And so it’s a fun chapter that we’re in, but now we’re in the creating systems to scale.

Tyler Martin: So when you do these ride-alongs, you just brought back something for me. Many years ago, I used to run a company and I would record this or we would record the salesperson’s calls. And occasionally I’d listen to a new salesperson. I just cringe going, oh my God, I can’t believe these things are happening.

Tyler Martin: And thinking that I trained people. Is there anything when you go on these ride-alongs where you’re like, I didn’t know we were approaching things this way. Can you give an example with, of course, not giving any names of some things you’ve observed?

Stephanie Allen: Yeah. I am realizing that everyone’s running their own sales process right now. Ah, okay. And so we’ve been too loose on exactly what the expectations are. Now, that being said, everyone in my team members is well-educated. Everyone speaks well. Everyone treats the homeowner well.

Stephanie Allen: But it’s hard to create a system that scales when everyone’s doing it their own way. Yeah. So that was a little frustrating of a recent find. I created, we call it the blue sheet because it’s on blue paper, which was supposed to be

Stephanie Allen: questions that helped begin conversation in the home, kind of icebreakers for our technicians. And then you were able to present recommendations on that sheet, whether you would qualify the equipment for six months or a year of like guaranteed service and some information about

Stephanie Allen: our family plan. I’m finding that the technicians, because they’re required, they have to be taken a picture of and then turned in to get your next job. Did you do them in the van after the call to turn them in? You know, and the intention for those is it’s a tool that you’re using alongside

Stephanie Allen: the homeowner to help guide the conversation. But when your team doesn’t fully understand the why, They do whatever they want. And so you just, you hope and you assume that they understand things the way that you understand them, but they don’t. And so as a leader, you have to set up the guard

Stephanie Allen: rails and the checks and balances. And, uh, you know, we’re constantly checking and balancing and,

Tyler Martin: and recalibrating. On the sales thing with everybody kind of doing it their own way, how are you going to bring that together? Is that like a consultant that comes in and helps bring everybody together? Is that you guys writing a process? How do you envision kind of bringing that together?

Stephanie Allen: Both. Both, okay.

Tyler Martin: I am talking to a couple of consultants right now. One primarily that I’m very excited to work with, but it’s also understanding that Kevin and I know this. Like Kevin has a process. He’s one of the best technicians I’ve ever met. He’s a natural sales tech coach.

Tyler Martin: from the beginning before we understood what a sales technician was, right? Because he had to be, it was mode of survival. And he took for granted the fact that he actually ran a process, but you’re not successful like he was without having a process. And so it’s breaking that down

Tyler Martin: and then holding our team to look until you prove that your process is better than this one,

Stephanie Allen: this is the one you’re going to run. Yeah. You brought up a little bit earlier, you mentioned when you step away from the business or go somewhere, you find gaps and then you work on those gaps. How do you do that? Because you’re like, you’re away from the business. How are you

Stephanie Allen: finding the gaps? Is it you’re just thinking through things in your head and it pops up that

Tyler Martin: there’s a hole or is there some, are you looking at data? How are you finding them? Yeah. Generally it’s data or when I come back, something’s on fire. I got it. Okay. That makes sense.

Stephanie Allen: Okay. And anything in particular, like what are the gaps that you like most recently are you seeing that you would say, hey, it sounds like sales might be one, getting everybody on the same page. Is there anything else that kind of stands out?

Tyler Martin: Well, I mean, we’ve recently really organized our business into five parts. So we have lead generation, lead processing, sales, production, and back office. We were trying to do that before in three process it or three divisions. And there was too much crossover or too many people not

Tyler Martin: being able to really own their zone. My good friend, Catherine Howard likes to say, you should have one throat to choke. I like that. And so now we know who owns each of those lanes and what exactly that lane entails. And we’re starting at the beginning of the supply chain. So the

Tyler Martin: beginning of the supply chain is leads. I have a lead generating machine that does that really well. Now we’ve moved on to lead processing. And we thought that we were doing a great job with lead processing. In fact, my booking rate was high. Turns out data integrity, when people get

Tyler Martin: to rate their own calls, maybe not the best. So there’s a lot of opportunity for us to convert more of those leads in our lead processing center. I hired one of the best in the industry, I believe, and she’s coming in and creating new processes for us and deploying those. One of them was she

Tyler Martin: removed AI first. She wanted humans answering the phones. And we’re seeing a big increase in that. We are an AI-enabled company, but we believe in saving our humans for humans. So all of my team is made more efficient by the use of AI, but we are trying to be as human

Tyler Martin: forward-facing as possible. Now, that wasn’t possible six to eight months ago when cash flow was really hard. We had to, we plugged in our voice agents as band-aids and we learned a lot in the process. I worked through a couple of different companies. Right now we’re with Broccoli,

Tyler Martin: whom I adore. We love their system and they work alongside us really well. So shout out to Broccoli. In the last couple of months, we totally revamped our membership plan. I’m now working with Smart AC. We’re going to start doing no truck roll maintenances based on monitoring. It’s good for

Tyler Martin: the homeowner. It’s good for us in adaptive capacity. It’s good for collecting more data. So I will increase the intelligence that I’ll be able to leverage in the coming years with AI. But when you make big changes and you understand the why, it takes some time to roll out to the

Stephanie Allen: team. And we’re learning things with that rollout. It does. It does. I was talking to Paul Kelly. He was actually, I interviewed him yesterday. He’s going to come in a future episode. He’s got raising goats. He’s Parker and Sons. We grew it to 250 million.

Stephanie Allen: But what I love that he said is he talks about four pillars. And one of the pillars resonated me probably the most was this implementation. His whole thing was like, keep it simple, do it fast. Keep it simple. Now, it sounds, I mean, I do agree with everything he says.

Stephanie Allen: It’s just kind of sometimes hard to do it fast when you’re kind of pulling everybody along. But the theory is awesome. I mean, the way he talks it through. And I think the execution probably under his leadership works, but I know I’ve struggled

Stephanie Allen: with that. You’re kind of smiling. I’m curious what you know about that and what your thoughts are.

Tyler Martin: How G-rated does this podcast have to be? You know, for you, it can whatever level. So what I’m laughing about is I saw Paul speak and his whole thing is like, if you have shipplementation, right? It doesn’t matter. It’s going to suck kind of thing.

Tyler Martin: And so just like, if you know Paul Kelly, you love Paul Kelly. He comes in with just this really easy energy. And he’s like, how can I help you? How can I help you be successful? How can I take ownership for this? You know, and I’ve learned a lot from him, but keeping it simple and implementing fast,

Tyler Martin: that sounds just like him for sure.

Stephanie Allen: I tried. I really tried, Stephanie. I tried to pick his brain a little bit, like, how do you do it fast? Like, I get it. But like, I mean, there’s just things going on when you’re running a business that it’s hard to get everybody to row fast in the same direction.

Stephanie Allen: And, you know, and he definitely has a methodology. I mean, and I’m sure, I mean, he’s got the credentials, $250 million company, a lot of success, but I don’t know. Just my brain was having a little bit like totally getting around how you do that in

Stephanie Allen: execution.

Tyler Martin: He’s better at focusing than I am. Really? Yeah. For sure. Right. So if there’s one thing he wants implemented, he can focus on that one thing. His whole thing is meet with the right people enough times they will get it done. So he just stays real focused on it.

Tyler Martin: And he’s really annoying about it, right? So, okay, we’re going to meet about that for 15 minutes every day until we figure it out. Yeah. And then the team figures it out and they get it implemented. Yeah, he just gets like hyper-focused. And he’s like the whole ta-da is like just little small things keep adding up.

Tyler Martin: He’s really an amazing guy. It’s another guy that’s really great for this industry that shares. Okay.

Stephanie Allen: I want to talk about fall of 25 and just 2025 in general.

35:01The summer that never came and watching cash over margin

Stephanie Allen: I think there’s just so much to learn there from you guys. So it sounds like you kind of, for a couple quarters, you were looking at the numbers that weren’t going in your direction, but you were kind of waiting for things to get

Stephanie Allen: better. And I see this a lot. So it’s common that it happens. What was the, now that you have a do-over, you’re in a new era, what did you learn from that from a number standpoint? Like, are you guys now neurotic where you’re looking things every week or have you changed

Stephanie Allen: anything in terms of how you look at interpret your numbers from that period of time?

Tyler Martin: I mean, several things. First of all, we were only able to survive that time because we had been smart with money for 15 years. So Kevin and I had amassed enough personal wealth that we could reinvest back into the company based on our personal assets.

Tyler Martin: We didn’t have, it was feeling desperate enough that we thought that we might have to liquidate or sell at that point until we figured out, hey, when you got money, you could figure out how to, you know, to leverage it. So, you know, being smart in business for 15 years afforded us the

Tyler Martin: second opportunity to really invest back into our business. We are now focused a lot more on cash than on margin. Margin’s important, but if there’s zero cash coming in, then it doesn’t matter what those margins are, right? So sometimes we’ll take a lower margin to keep the guys working and to

Tyler Martin: keep the cash coming in. Margin doesn’t pay my bills. But we also know when we’re going to lose money on a job and when we need to walk away from it. Opportunity costs are real. So if I have my team on a low margin job and I have to say no to a high margin job, that’s a problem. But I’d much

Tyler Martin: rather have them on a low margin job than no job, right? So that’s learning some operational gut and when to pivot. And the team didn’t have that before. So we are very much more based on a three day job board. Those decisions change based on that. And they can call in certain discounts or

Stephanie Allen: flags as necessary to keep things moving. Got it. Now, when you say margin, there’s a little more latitude now when you guys think about margin. Like, are we talking about, and not to use your numbers just as an example, but let’s say normally we’re trying to hit 50% margin on

Stephanie Allen: an ideal job. We would be open to like a 20% margin. Would we go down that far? Would we even maybe go to 10? Like how much latitude in your mind would you have to say, hey, if I’m going to

Tyler Martin: keep the guys busy, it’s better than not having the work. You only know what you can do if you understand what your overhead costs are. Yeah. So when I’m operating at a 2% net profit, I don’t have much room to wiggle around on margin, but I’m operating on a much healthier

Tyler Martin: net profit now. And so I have more room to wiggle on the margin at the top, on the gross margin. Right? So you have to really get a grip on your overhead. I was able to do that by changing my marketing strategy. So I don’t pay for leads anymore. I will at some point when I need to

Tyler Martin: for scale. But right now we don’t do any real paid advertisement. You know, we still have our LSA and we still have some investment in Yelp and we still do a few things, but I don’t do any pay-per-click, you know, so I was able to adjust the overhead on that and on making sure that I

Stephanie Allen: had the right people in the right seats. Yeah. Okay. You had also mentioned, Stephanie, about membership plans that you had revamped them. What did you do? What did you change in your membership plans and how do you feel they work for you in terms of like building that customer

Tyler Martin: continuity and having a lifetime customer basically? So a couple of years ago, we changed from two maintenances a year to one maintenance a year because I was just tired of the $0 truck rolls. We do a pretty thorough install when we do their installation. And so there’s nothing really

Tyler Martin: left to sell in a home. And it’s hard because our technicians want to sell something when they get out there. Right. And we, so we figured out, especially in California, we can generally run the heater and the AC in the same day. It’s not like it’s a real seasonal area. So we went to one

Tyler Martin: maintenance a year with unlimited additional calls if necessary. So if that homeowner wanted a second maintenance, we’d do it for them. If they, if they needed a Diag, we would do it for them. It made us less responsible to go out for unnecessary truck rolls.

Tyler Martin: So that was a positive for us a couple years ago. I think that the technology’s evolved now that we can actually see inside a system based on these sensors and data. There are some things that are missed by smart sensors. It’s not checking the electrical components and the outdoor condenser.

Tyler Martin: But for a five-year and under machine, you’re not expecting the capacitors to go bad. You’re not expecting the contactors to be pitted and burned, right? So I don’t have to be out there two to three, one to two times every year. I can be out there every 18 months.

Tyler Martin: I can be out there every 24 months. Better for the homeowner, better for us.

Stephanie Allen: Very cool. Okay, I want to got one last topic I want to talk with you about is just in terms of like legacy AI, I want to talk about that a little bit. Now, I know you have some, I don’t know if you’re a full owner or partial owner.

Stephanie Allen: I know Box for Trades is one thing that you’re involved with. Are you, I’m assuming you can disclose this, are you full owner of Box for Trades? I’m not.

Tyler Martin: No, I was a co-founder of Box for the Trades and I’ve actually sold my, I’m in the process of selling my equity back to them.

Stephanie Allen: Got it. But by the way, they’re really respectable brands. So kudos to you for starting such a cool brand. And then I think you’re also involved with Just Start AI. Is that correct?

Tyler Martin: Yeah, I co-founded that with Jennifer Bagley. Yeah. And I mean, she’s really got a lot of visibility. So where do you think this whole space is going? I mean, you’ve talked about AI a little bit in your own legacy. Like what are next steps for you? Where do you see AI is going and what are you excited about in terms of legacy?

41:07Fuel and a shared chart of accounts for independents

Stephanie Allen: I believe in the whole idea of better together. And so I have been conceptualizing this idea called F.U.L. It’s a revolutionary growth collective that’ll bring us independent owners together where we can link arms and use AI to be a force multiplier and create leverage to

Stephanie Allen: be able to compete with private equity and big money. Part of the problem for us independents is even though we make up like 80% of the industry, when we operate on our own islands, we have no scale. And so we don’t have buying power. We don’t have economies of scale.

Stephanie Allen: We don’t have aggregated intelligence. And that really sets us behind even further. So what I’m looking to do is to help businesses standardize some of the inputs of business. So can we all agree on a standard chart of accounts? Can we agree on similar business units and job types

Stephanie Allen: in Service Titan or any of your FSMs? What is the definition for an opportunity call? What is the definition for close rate? At what point? Like we all have all of these different numbers right now. So it’s hard to use each other’s KPIs as any type of a benchmark.

Stephanie Allen: So I think the beginning is like, let’s get ourselves organized. And it’s what Airworks is doing right now. We’re adopting a whole new chart of accounts. I’ve been working with several very respected finance and accounting leaders in the industry. I was on a call a couple of weeks ago with Ellen Rohr and Lincoln Walpole.

Stephanie Allen: and I’m pulling together a lot of the best practice groups, et cetera, and we’re designing a chart of accounts that will not only just stand for the traits, but will really stand across industry with similar headers, right? And then we can change all the sub headers and things

Stephanie Allen: underneath, but let’s start speaking the same financial language so we can learn from one another. I’m learning that in order to leverage AI, I have to get simpler and I have to get more organized so I can call on these agents to do the things that I want them to do for me.

Stephanie Allen: That’s a little bit of an aside, but that’s like the beginning steps of what’s happening in the fuel sphere. I think that there are a lot of us that didn’t sell. We’re now legacy businesses. We’re not sure what to do. We don’t know exactly what an exit plan would be, but we are trying to

Stephanie Allen: create generational wealth for ourselves and our families. And more of us need to talk about it. We need to talk about how hard things are. We need to talk about the good things, the things that we’re doing really well. And I’m trying to create a space for that.

Stephanie Allen: So my legacy is to help people build businesses worth keeping. Whether they keep them or sell them, you know, that’s up to you and a personal decision for whatever is best for you and your family at that point in time. But I believe that everyone,

Stephanie Allen: every business owner should have a business that they don’t have to sell in order to reap its benefits.

Tyler Martin: Yeah. So you were talking about the fuel. The website is fueltetrades.com. So people want to go there and check it out.

Stephanie Allen: It’s a very novice landing page that we created a couple of years ago before the 2025 hardship where I put my head down in that. But it’s coming back. I have just such a great network around me that’s really excited about this idea.

Stephanie Allen: and pretty much everyone I talked to about it, Steph, this is so smart, let’s go. And they’re willing to lend their expertise, lend a hand. And nobody right now is asking what’s in it for me, which I was really scared about. I was really nervous about creating equity

Stephanie Allen: and figuring out what the entity structure looked like and how am I gonna pay everyone involved? And turns out the industry really wants the industry to survive.

Tyler Martin: Wow. I love the idea though, the whole concept of like, we’re competing with some big players, small shops are. And to have some level of people banding together in different areas, same areas doesn’t really matter, but just banding together and having some systematic process where we’re consistent, it can do nothing but help everybody

Stephanie Allen: become better. I mean, I love the concept of it. Thank you. That’s really cool. And we’re going to get so much smarter because of it. And now is the time that we have the technology and the transparency to be able to, to do this well together and to learn from one

Tyler Martin: another. Awesome. Okay. Well, Hey, that’s it on my end. I want, I’m going to wrap up the show. I want to share your website. So you have airwork solutions.com is your business website and we have fuel the trades.com. Uh, you guys be sure to check that out. Then I’ll put it in the,

Tyler Martin: uh, in the LinkedIn. I mean, my show notes, uh, your various social media, but most of them are several of them are Miss Steph Allen. LinkedIn is Miss Steph Allen. Instagram is Miss Steph Allen. But if you search, you’ll probably see all her personal social media. I think, you know,

Tyler Martin: Stephanie, you’re awesome. I mean, just talking to you, you’re just, I love how grounded you are, your strategic thinking, and just being so transparent and sharing everything. I really

Stephanie Allen: appreciate it. Thank you. Thank you so much for having me. It’s been fun. Yeah, it’s been awesome.

Tyler Martin: Have a good one. Okay. You too. Take care. Stephanie’s story is a great reminder that growing a business can still have weak spots hiding underneath the surface. I really appreciated how honest she was about the messy middle of running a trades business. Airworks was built

Tyler Martin: on trust, long-term relationships, and doing the right thing for the customer. But she also made it clear that values alone are not enough. You still need clean numbers, strong cash flow, the right people in the right seats, and the processes your team actually understands.

Tyler Martin: For home service business owners, the lesson is simple. Do not wait until cash is tight to understand your numbers. Know your overhead, protect your cash, tighten your systems, and make sure your team understands the why behind the process. Hey, if that paragraph had you thinking, yep, that’s exactly where we are, you’re probably

Tyler Martin: the kind of business owner I work with every day. Head over to ProfitAndGrit.com to learn more or book a free intro call at CFOIntroCall.com. And as always, thank you so much for listening. I’ll catch you on the next episode.

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Tyler Martin works with owners on the numbers behind these stories: HVAC accountant and fractional CFO for HVAC contractors.