Daniel Frazee, Executive Vice President of Rancho Mesa Insurance, interviews Matt Mauzy, President of Mauzy Heating, Air & Solar. During this episode we will learn about Matt, his personal background, how he got started in the heating and air industry, victories & challenges, business advice, and much more!

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Mauzy.com

Director/Producer: Alyssa Burley

Host: Dan Frazee

Guest: Matt Mauzy

Editor: Lauren Stumpf

Music: "Home" by JHS Pedals, "Movin' Up" by Dan Lebowitz

© Copyright 2021. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

[Introduction Music]

Daniel Frazee: Welcome everyone, and thanks for joining us on our ongoing series of getting to know our clients. My name is Daniel Frazee, the vice president at Rancho Mesa, and today we're excited to speak with Matt Mauzy from Mauzy Heating and Air.

Matt, welcome to StudioOne™.

Matt Mauzy: Thank you. Thanks for having me.

DF: Excited to have you. So to get us started, Matt, tell us a little bit about your, your personal background where you grew up, anything that's pertinent to our listeners or for our listeners as they learn more about you, the person.

MM: Yeah, I grew up in a small town here in San Diego in Lakeside, grew up with my mom and dad, had a younger brother and a younger sister and had a normal upbringing. My dad has worked in the industry almost his whole life too, so I kind of grew up being taught heating and air conditioning grew up around the trade and my early years in high school in 10th grade, I decided to leave high school. So, at the time I was taking astrology, trigonometry and probably won't happen today but we met with my counselor.

I knew what I was going to do and it was going to go into heating and air conditioning, and so we had a meeting and my counselor suggested to my parents that I leave high school and get my GED.

Probably not the best idea because I, I left two weeks into my 10th grade year and never went back to school and never got a GED, never went to any formal trade school. You know, colleges, anything. And I went to work doing heating and air conditioning with my dad and did that for a couple of years and ended up getting in a little bit of trouble with drugs and actually ended up losing everything I had. Ended up homeless under a bridge in another small town here, El Cajon, and woke up one day and decided that I wasn't going to die a drug addict and walked to a local rehab here, MITE, McAllister Institute for Teaching and Education, which I donate a lot of time to them today. I speak and give money to the program, but got myself into, into rehab and I got out of rehab, got back in the industry and ended up starting Mauzy Heating and air conditioning, so.

DF: Wow.

MM: We're a three generation company, my dad, me, and my son and that's just a little bit about my background.

DF: Great. I appreciate you sharing all that. Obviously, we've worked together a long time, so I'm aware of bits and pieces, but I appreciate your candor.

MM: Yeah.

DF: That's much appreciated. So, let's kind of shift gears. You're now in the business of working with your dad.

Talk about that transition. What was it like working with your dad? I think on that, how did the business begin to shift under your guidance?

MM: Yeah, so I took it over, I think it was 96. We were doing about $400,000 a year as a company and my dad incredible, incredible, incredible guy. You know, really good with the trade part of things, but, but not great with the business end of things with, you know, the marketing, the, the advertising.

You know, I'd gone to him a couple of times and said, “hey, let’s, let's create a marketing budget, let's go out,” and he was like, “no it’s referrals only, we'll get plenty of work that way,” and we saw things a little bit differently.

So, when it came time for me to take the business over and it was a hard changeover, it wasn't like he stayed and mentored and, it was I took the business over and he actually went to work for me and I took it over in 96 and. and we started growing the business.

Um, today we do over $20 million a year, but over the last probably 20 years, I've put a lot of time and effort into it, but it was, it was challenging at first with me becoming my dad's boss. So, what I did is we kind of separated. I put my dad in charge of the warehouse and he ran the warehouse, ordering the equipment, doing, doing all those things and then I took over the business side of things. And because we had that degree of separation, things actually worked out pretty good.

DF: Wow.

MM: And the business just started to take off and grow year after year.

DF: And what does that business look like? I mean, obviously we know you're heating air conditioning, but walk us through what you're kind of bread and butter is.

MM: Yeah bread and butter is residential heating and air. So, really, about 95% of what we do is going out to an existing residential home, tearing out the old heating and air conditioning system and ductwork and then putting in a new system.

So that's really the bread and butter and we do other services, we have solar that we do in combination with that heating and air and a few other things. But that's really the bread and butter, is, is residential only. We don't do new construction, we do commercial work in commercial buildings. We just do residential retrofit.

DF: Okay, great. I appreciate that. And where are you guys located now?

MM: We're in El Cajon. Yeah, bought a building, 15,000 square foot building in 2015 in El Cajon. When we bought the building, we only occupied – there’s 28 offices, a huge warehouse. We occupied maybe half of it. It was a little scary the first year.

DF: [Laughs]

MM: But you know, what I learned is when you buy a building like that, we were restrained by our old building, which was 2,000 square feet. We bought that building and within two years we had every office full and we grew by $12 million in gross sales.

DF: Wow.

MM: So that move allowed us to hire more people have more resources. And so I would definitely tell the listeners, if you're thinking about a move into a building that works better for you to, to do it. It's a little scary at first because of the financial commitment, but the best thing we ever did.

DF: Fantastic. So, I guess what, what would you say makes Mauzy unique from other competitors right now? What, what, what kind of separates you?

MM: It's our people. It's equality of work. The most important part about running a business is the people that you hire. Like, I don't, you know, obviously not a high school graduate. I don't have this, you know, crazy education.

I mean, the only thing I'm really, really good at is hiring good people. And that's really what separates us from our competitors is like our install teams are the best out there. You, the customer service when you call in is the best out there.

Once we get a customer, they stay with us year after year after year. We're not all about the dollar, right? A lot of our competitors, they pay their, their install teams, their service teams commission based on what they are able to charge the customer for. That kind of breeds some dishonesty because you have guys out there, the more they charge the customer, the more they end up keeping, and, and we don't do that. You know, every, everybody that works for us is hourly. They're all highly qualified, and that really makes us different from the other heating and air companies.

DF: Huh, interesting. Appreciate you sharing that. So let's shift gears a little bit and talk about your philosophy on safety and maybe how that blends overall with the culture of the company.

MM: Yes, so safety to us is super important. It's number one, if somebody gets hurt working for our company, I mean that, it makes me feel terrible because we've obviously failed them. We haven't had something in place that could have prevented that.

So it's going to happen. Even though we are a super safe company, thanks to you guys in your programs and what you guys do for us. We did. We had an incident about five years ago where we had a guy fall through a ceiling.

He was walking on a piece of wood that had a knot in it, so he was on a solid surface and that piece of wood broke and he fell to the ceiling and got injured pretty, pretty bad. And it was, I think, one of the first, probably the first major injury we had. I think the only major injury that we’ve had.  

And through that experience with Cal OSHA, who we all fear, right? They can hurt you financially, you know, even shut your business down. We had a mandatory audit, um.

DF: Okay.

MM: And what was great about that is through the training that we got from you guys, I was always told and Dan, you personally told me this every year. If there's an injury where somebody has to be transported to a hospital, you need to contact Cal OSHA immediately. They're your second call. And that stuck in my head and because I did that, when Cal OSHA came out to do their audit of the building and the audit of the site, they were very appreciative of that. The guy that came out asked me how I knew to call them so quickly.

I told him and he told me that most companies trying to avoid Cal OSHA, they don't make that call and when that happens, they really hammer those companies. So we got audited by Cal OSHA. We actually had a no change, no fine audit, job site and in a 15,000 square foot building and we got an award –  

DF: Wow.

MM: – from Cal OSHA for that, which is impressive. Like that just doesn't, the auditor that came out, his boss had to come out because he didn't believe him. That doesn't happen with Cal OSHA, I guess. So, you know, safety to us is super, super important.

You know, the meetings, the tailgate meetings, the training that you guys give us really helps us with those things. The resources that you guys make available has really helped us, but safety is everything to our company. Everything we do, we think about what could happen, what's the potential downfall.

DF: And you know, I've been able to witness that over the many years we've worked together and I can agree with you. I mean, I think how you treat your employees both on the front end in terms of the type of people that you're looking for to come aboard.

I think you're very selective, but you're also very generous to your employees. And I think as a result of that, there's a lot of loyalty, and I think about that one incident and I remember you being so impacted from that injury and wanting to take care of that person and, and the family involved and it was eye-opening for me.

MM: Yeah, we helped him buy a home because I knew he was going to be disabled for many, many years. So, we helped him get a house down in Chula Vista and, you know, because it was, something like that's horrible, right? It's, you don't want to see any of your people go through that, especially as close as we are to all of our employees.

DF: Right, right, and I think that's one of the many things that kind of separates you, but I've always admired that.

MM: Yeah, and you know, some advice I have to is, is, you know, as we started to grow, we grew very quickly. So, we had a couple 6 million dollar growth years. You know, the one thing that was difficult for us was to keep up on the safety.

We had a run of smaller like hand cuts and stuff that we had to deal with, but the one thing I wish we would have done was you need to increase your safety programs as quickly as your growth.

And that's the one thing that we fell behind a little bit. We got caught up very quickly, but.

DF: Right.

MM: You definitely have to make sure, and then hiring the quality people, we pay our people about 30% more than our competitors do, and we end up getting a much higher quality employee that takes safety and workmanship and things like that more seriously. So, it's well worth paying somebody a little bit more because you're going to save it on the back end.

DF: Right. I would agree with that. Unfortunately, I think a lot of people have a different view when it comes to that.

MM: Yeah, they do. They want to cut corners on labor and that's, that's the last place you should cut –

DF: Right.

MM: – is, is on paying your employees well. You're not going to get the same quality employee that you would get if you, if you just pay a little bit more.

DF: So speaking of labor and the big bad word of inflation and just the economy in general, how, how are things in today's economy relative to your operation, you know, any challenges that you guys are encountering? What's, what's maybe the, the toughest challenge?

MM: Toughest challenge right now is actually getting product like getting heating and air units is, is probably the toughest challenge in right there with it is getting labor too, like finding people that actually want to get out there and get dirty, climb in 115 degree attic.

Those two are probably hand in hand, but and then inflation is difficult because the average cost of a heating and air system in San Diego in the last two years has gone up about 22 to 24%.

DF: Wow.

MM: We live in San Diego, so the weather is usually 75 degrees. It's a place where you don't need heating and air all year long. There's a couple of months in the summer and a couple of months in the winter that you use it. So, that's certainly becoming a challenge for us because you're, you know, you’re average heating and air system cost fully installed used to be about $80,500, and now it's, you know, um that was about two or three years ago. Now it's run at about $15,000.

DF: Wow.

MM: The same system, and my fear is, is when do consumers say, okay look, for $20,000 I'll be hot two weeks a year.

DF: Right.

MM: Two weeks a year, right? It’s San Diego, right? And we know it's going to be beautiful in a month. So, that's one of my, one of my concerns but I still think that people that have had heating and air systems, I still think with that cost, they're not going to go without.

At least that's my hopes.

DF: I think you're right. I think you're right. So kind of last piece of this is just to talk about you and I and just our connections. We've worked together since, believe it or not, 2005. So it's been a good 16 year run, plenty of ups and downs in that window.

Can you kind of share with our listeners how your partnership with us, in particular, Rancho Mesa has benefited Mauzy and anything that, that you've gleaned from the partnership?

MM: I was thinking about it when we sat down here. I would say, I mean, number one, probably the most impressive part is your presentation every single year to us as a, as a team where you sit down yourself and break down the different insurance is what the benefits are, the ads we should go with and you break down what the meanings are of these things. That is so helpful every year. It makes it so that we understand what the policy looks like, understand what things are important, what the different costs are, and helps us build what I think is the perfect policy for that time.

Right? And, as we've grown, things change. We need different, different coverages. We need there’s a lot, there’s a lot of different things. And every year the presentation that is given makes it so simple for us to make a decision on what things we really need to do as a company.

And then some of the other things are like Jim Malone, like the support, your support staff, Kim, I mean, everybody here that we've worked with for all these years. Like with Jim on the worker's comp site, being able to get updates on things, being able to – just if I have got a question about something, contact him, and on the medical side, on anything worker's comp related has just been absolutely amazing. The other thing I appreciate, too, is the competitiveness every couple of years. At least we put this thing out to other insurance companies because, you know, as a business man, I think you have to do that, right?

You got to see what's, see what's out there, and every single year you come back and there's an adjustment needs to be made or I've got questions about something. Every year you guys come back and are super, super competitive, so.

DF: Good.

MM: But yeah, without you guys, we wouldn't be where we’re at today. And then the training programs, like all of the stuff that you give us included in the package every year, access to all of the sexual harassment training, all of the programs that you give us that we're able to use on the inside have, number one, saved us a bunch of money, but number two, you know, helped us get where we're at.

DF: We appreciate that. It's nice to hear because oftentimes we, we don't get the summary like you just provided of, you know, how we operate and what we try and do, separate of the insurance as well.

MM: The professionalism and the consistency is just amazing, and that's something that every year I don't have to worry. I know May of every year you're going to sit down with me, you're going to go over the coverages, we're going to pick something and then we're off and running for another year.

I don't have to worry about it. I don't have to think about it, and that's, that's huge when you're trying to run a company. Like I said, it's the same people every year which I love, you know, make a phone call, it's to the same people.

There's that consistency when we ask for something to get done if we need a certificate of liability or we need additionally insured, it's handled immediately. It's one email and it's done. So, it saves us so much time.

DF: Well, we're fortunate to have a great team behind us and like I said, I appreciate those words. Well, thank you so much for taking time. We could probably spend another 45 minutes to an hour.

MM: Oh yeah, Oh yeah.

[Both Laugh]

[Closing Music]

DF: But I really appreciate you taking time because I know how busy your schedule is and it's nice to have you back in our office. It's been a long time, so thank you, and best of luck to Mauzy and I thank you. Really excited.

MM: Thank you very much.

DF: All right. Thanks, Matt.

Alyssa Burley: This is Alissa Burley with Rancho Mesa. Thanks for tuning in to our latest episode produced by StudioOne™. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.