Most HVACR businesses never make it past $3 million in revenue, but understanding the critical breakpoints between growth stages can change that trajectory entirely. During ACCA Strategic Partner Cardone Ventures’ latest webinar, “Scaling Success: Navigating Growth, Breakpoints, and Maximizing Valuation in Your HVAC Business,” co-founder and CEO Brandon Dawson revealed the proven framework that has helped over $9.8 billion worth of small businesses—including hundreds of millions in HVACR companies—break through growth barriers.
ACCA members can access the full webinar recording here.
Highlights from “Scaling Success: Navigating Growth Breakpoints and Maximizing HVACR Business Value”
The reality check every HVACR owner needs
The numbers paint a stark picture: 97% of small businesses fail within 10 years, with two-thirds failing in the first five years. For HVACR businesses specifically, 98.2% remain stuck at $3 million or less in revenue with an average of 12 employees or fewer. Dawson identified three primary causes of failure: lack of demand (not an issue for HVACR), inability to find great people, and lack of profitability or access to capital.
The HVACR industry represents a $32 billion space with 145,000 businesses—and there’s never been a better time to build value, especially with interest rates expected to drop in the next 24-60 months.
Understanding the 7 critical breakpoints
Through extensive research of thousands of businesses, Cardone Ventures identified seven key breakpoints where businesses either succeed or fail: $3 million, $8 million, $15 million, $25 million, $45 million, $75 million, and $125 million. Each breakpoint requires specific elements to be in place for successful navigation.
- At the $3-8 million transition – businesses must shift from relying on the founder’s technical skills to implementing documented processes.
- At the $8-15 million breakpoint – a three-person leadership team is essential.
- By $25 million – companies need five leaders working as one team.
- By $75 million – companies need eight leaders managing different functions.
The costly mistake of skipping optimization
One of the most crucial insights Dawson shared was the business lifecycle progression: start, build, optimize, expand, and transform. Most struggling businesses make a critical error—they jump from building straight to expanding, completely skipping the optimization phase.
“Optimization is where you really get aware of how many employees you have, what your profit centers are, what your revenue per employee is, what your profit per employee is,” Dawson explained. This optimization phase is essential before any expansion attempt.
The 20% rule that changes everything
When asked about cost of goods and profit targets, Darren (who helped grow Goettl Air Conditioning & Plumbing from $5 million to $215 million) emphasized starting with the bottom line: “If you’re not making 20 cents on every dollar to be able to reinvest into your business, then your pricing is incorrect, your efficiency is incorrect, and you’re killing yourself for absolutely no reason.”
Dawson reinforced this message with a critical directive: if your business isn’t achieving 18-25% profit margins, stop trying to grow. Instead, focus on optimization and efficiency with your current resources.
From struggling to platform company
The webinar highlighted Goettl’s transformation as a prime example of what’s possible. Starting as a struggling $5 million business with legal challenges and operational issues, the company grew to $215 million before selling for $550 million—a 22x EBITDA multiple.
This success came from systematically implementing what Dawson calls the “10 elements of scale”:
- Strategy
- Marketing
- Sales
- People
- Operations
- Finance
- Leadership
- Data
- Technology
- Investments
Each element must be developed in sequence as the business grows through different breakpoints.
Platform companies command premium valuations
Dawson revealed why private equity firms are so interested in what they call “platform companies”—businesses that have successfully navigated to breakpoint seven or eight ($125 million+). These companies have figured out their systems, leadership, and processes, making them primed for billion-dollar growth.
The key insight is that multiple smaller businesses working together on the same systems can achieve similar valuations to these large platform companies, even without reaching the same individual revenue levels.
Taking action on growth
The webinar concluded with actionable advice for immediate implementation. Business owners should focus on “sliding” to the next revenue level by maximizing current resources rather than “pushing” growth through increased expenses. This means taking 10 employees doing $3 million and finding ways to reach $3.5-4 million without adding costs.
For those ready to flesh out these concepts, Cardone Ventures offered complimentary access to their 10X Summit, typically a $2,000 event, exclusively for webinar attendees. This one-day intensive provides industry-specific strategies and direct access to HVACR experts who’ve successfully navigated these breakpoints.
The message was clear: building a high-value HVACR business isn’t just about working harder—it’s understanding the proven sequence of growth and having the discipline to optimize before expanding. As Dawson concluded, “Business should be fun. And you deserve the life that you deserve. So make sure your business delivers that to you.”
Cardone Ventures is an ACCA Strategic Partner. For more information about our Strategic Partner Program, visit our website or email ACCA’s Strategic Partnerships Manager Kenzi Vizzari at kenzi.vizzari@acca.org.
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