7 Scaling Tips to Increase Profitability
"I don't get it. We bring in over $11.0M in revenue, yet I can barely pay my bills! What is happening and where is all the money going?"
This is what a commercial HVAC company owner just outside Philadelphia told me when he called in a panic last year. He was exhausted. "None of this makes sense to me, and if I continue like this, I will have to shut my doors."
He was working 70–80 hours a week, yet profits were razor-thin. His stress level was through the roof. His family barely saw him.
None of this surprised me. I’ve heard this same story hundreds of times in my career as a certified executive coach and profit coach. The problem is always the same: the company grew faster than the owner.
According to NYU Stern’s 2024 report, top-performing HVAC commercial companies operate at a17-20% net profit. Yet, the majority of owners have a net profit of under 10%. Some are barely above break-even.
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The Real Issue: Inner Growth
Scaling isn’t just about bigger numbers. It’s about owner transformation.
The Philadelphia HVAC owner, let’s call him Mr. H, had grown the company with hustle, skill, and sheer determination. But those traits couldn’t take him to the next level.
He was still acting like a technician — the smartest worker in the shop. But the business didn’t need another technician. It needed a leader.
This shift from “worker” to “CEO” is the hardest move most owners will ever make. It requires letting go of control, trusting your team, and learning to manage data instead of jobs.
I’ve guided hundreds of owners through this exact change. Every time, the results look the same: higher margins, shorter hours, and more freedom. But only if the owner grows alongside the company.
That’s why I introduced my 7 Scaling Tips to him. These were the exact strategies I used with Mr. H to help him transition from panic to record profits in under a year.
Tip 1: Shift from Technician to CEO
Most owners are trapped in daily tasks. They check invoices, answer calls, and solve problems their team should handle. They are the highest-paid employees in their own companies.
That was the Philly owner. Every morning, he checked truck inventory — a $20/hour job. But his time was worth $500/hour. The math didn’t add up.
When he stopped micromanaging and trusted his staff, his time freed up; with that space, he could focus on strategy, sales, and leadership. Profits began to rise.
Research backs this up. Harvard Business Review found that companies that delegate effectively grow 33% faster.
Action Step:
Track your time for one week.
Circle everything that could be done by someone else.
Then commit to never touching those tasks again.
Mini Case Study: Once the owner delegated dispatch, quoting, and inventory, his weekly hours dropped by 17. That gave him the time to build a sales plan that increased average ticket size by 18% in three months.
Tip 2: Build Systems That Scale
If your company collapses when you take a week off, you don’t own a business. You have a job.
Mr. H confided in me that he couldn’t take a vacation without constant phone calls. Everything lived in his head. That’s not scalable.
We fixed this by documenting one process at a time: dispatching, quoting, scheduling, and invoicing. Each was written down in step-by-step detail. Then we trained the team until they could run it without him.
Within three months, his business didn’t just survive when he stepped away — it ran smoother.
Industry Benchmark: According to McKinsey, companies with standardized processes experience a 25–30% increase in productivity compared to those with ad-hoc operations.
Action Step:
Choose one broken process this week.
Document it.
Test and improve it.
Repeat weekly until you’ve built a system-driven company.
Mini Case Study: The Philadelphia HVAC company reduced job scheduling errors by37% after implementing a standardized dispatch process. Customer complaints dropped dramatically, and his repeat business increased.
Tip 3: Track Numbers That Matter
Revenue is exciting. But it’s a vanity metric.
Mr. H, the owner of the commercial Philadelphia HVAC company, used to boast about his $11 million company’s revenue. But that was a smokescreen.
In reality, 40% of his customers were costing him money. He had no clue because he wasn’t tracking profit per customer. He was not tracking any Key Performance Indicators (KPIs) that mattered.
Once we reviewed client-level profitability, he cut low-margin accounts. He doubled down on higher-value ones. The results were immediate, and once he saw his profit start to increase, he started tracking more and more KPIs.
Key Numbers to Track:
Profit per customer
Retention rates
Average transaction value
Employee productivity
Cash conversion cycle
Industry Benchmark: Service companies with strong KPIs achieve 22% higher margins than those that only track revenue.
Action Step:
Pick three profit-driving metrics.
Track them weekly.
Post them in the office so the team can see progress.
Mini Case Study: The next important KPI we tracked was his service contracts. About 36% were expiring without renewal. A simple follow-up system added $780,000 in recurring revenue.
Tip 4: Invest in People Before
Most owners spend money on shiny new objects — such as new trucks, software, and equipment. As a certified business coach who works with HVAC companies, I know that equipment doesn’t drive profit. People do.
The Philly owner, Mr. H had dropped over $200,000 within the last 7 months on equipment upgrades.
Meanwhile, his team hadn’t had a single training session in years. Morale was low, turnover was high, and productivity lagged.
We reallocated just 3% of payroll into leadership training, customer service workshops, and technical certifications. The impact was immediate: productivity rose, turnover dropped, and online reviews surged.
Industry Data: Gallup reports that companies investing in employee development see 11% higher profitability and 17% higher productivity. ACCA found that 71% of HVAC firms said their biggest drag on profit was a lack of skilled labor..
Action Step:
Redirect 2–3% of payroll annually for training purposes. It will return more than any physical asset you buy.
Mini Case Study: Six months into training, the Philly company’s turnover rate dropped from 28% to 17%. That alone saved over $250,000 in hiring and onboarding costs.
Tip 5: Use AI and Technology to Multiply Efforts
Technology isn’t a cost. It’s a multiplier.
When we first met, the Philly HVAC owner was still quoting jobs in Excel and mailing paper invoices. Ouch! It was costing him nearly $300,000 a year in wasted admin hours. On top of that, his proposals looked unprofessional and outdated.
We replaced spreadsheets with AI-powered proposals, digital invoicing, and automated email follow-ups. His admin hours dropped by approximately 20 hours a week. Cash flow improved immediately.
Industry Benchmark: According to PwC, 61% of companies that adopt AI in their operations experience cost reductions within the first year.
Action Step:
Identify your three most repetitive tasks.
Find AI tools or automation to eliminate those tasks.
Most pay for themselves in under nine months.
Mini Case Study: By automating follow-up reminders, Hr. H reduced nis overdue receivables by $378,000 in the first year.
Tip 6: Scale Smarter, Not Faster
Scaling doesn’t mean doing more. It means doing better.
The Philly owner wanted to expand into another state. But his margins were weak and his leadership bench was shallow. Expanding would have multiplied his problems.
We halted his expansion plans and focused on improving margins, strengthening leadership, and refining the company’s systems.
Most commercial HVAC businesses operate at net profit margins of as low as 2–5%.
Businesses should consistently achieve and maintain a net profit of at least 10–20%. The company should be able to stay at this net profit level for 2-3 years before thinking about any location expansion.
Industry Benchmark: Bain & Company found that 80% of failed expansions occur because businesses scale before their margins and systems are secure.
Action Step:
Do not add locations, services, or regions until your foundation is rock solid.
Mini Case Study: After 2 years, once his profit was strong and steady, Mr. H. HVAC opened a second location out of state.
Tip 7: Master Cash Flow Discipline
Revenue looks good on paper. But cash flow pays the bills.
Mr H. was constantly blindsided. Payroll surprises. Vendor bills he couldn’t pay. He felt like he was always one check away from disaster.
When he started, I encouraged him to use a 13-week rolling forecast.
Once in place, he realized he could now see his problems before they hit. He never missed another payroll again, and his stress level dropped overnight.
Industry Benchmark: Companies with weekly cash flow forecasting are 36% more likely to survive downturns.
Action Step:
Develop a 13-week forecast
Review it weekly
If you don’t know how to develop one, make a 30-minute strategy session with me
Mini Case Study: After building the forecast for Mr. H., the Philadelphia HVAC owner was able to reduce emergency loans by 63%.
How the HVAC Commercial Business Owner Turned It Around
Within 14 months of business coaching with me, Mr. H. transitioned from panic to control.
His net margin jumped from 0% to 11%. His hours dropped from 74 per week to 45, and he finally took his first vacation in years, all while his company continued to run smoothly without him.
That’s the power of scaling smart. These seven tips aren’t theory; they’re proven steps, tested in real businesses, that create freedom and profitability.
Scaling is never about luck. It’s about discipline, systems, and leadership. The only question is: are you ready to step into your CEO role?
Key Takeaways
Shift from worker to CEO.
Build systems that scale.
Track profit-focused metrics.
Train people before buying tools.
Use AI to multiply efficiency.
Scale smarter, not faster.
Protect your business with cash flow discipline.
FAQs
What’s the biggest mistake service owners make when scaling?
They chase revenue growth without first fixing their margins. That multiplies losses instead of profits.
What profit margins should a service business target?
By 2025, aim for 15–25% net margin. Anything under 10% is a red flag.
What scaling tips help avoid burnout?
Delegate low-value tasks, document systems, and track only profit-focused metrics.
How fast can AI improve profitability?
Most owners see results in 60-90 days. Automation cuts 10–20 hours a week and improves cash flow.
How long does it take to build systems that scale?
Most owners can document and hand off one core process in 60 days. Within six months, sufficient systems can be in place to run without the owner's direct supervision.
What is the first step to improving cash flow?
Start by tracking receivables daily. Many companies wait 45–60+ days to collect. Cutting that by even one week can add thousands in free cash every month.
What to Do Next?
Scaling profitably isn’t about working harder. It’s about following proven steps that protect margins and free your time.
As a certified profit coach, I help owners scale smarter, reduce stress, and build companies that thrive even when they're not there. All this is accomplished with proven systems, coaching, and the use of custom templates.
Schedule your Profit Strategy Session today and discover which of these 7 scaling tips will unlock your next level.