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5 Roadblocks Keeping Home Service Companies Stuck at $3–5M – Patrick Lange
Manage episode 513578975 series 3651404
Most home service owners chase growth by adding trucks, techs, or new territories. Patrick Lange learned that more isn’t always better, and sometimes growth hides real financial cracks.
Patrick started in the pool industry, growing his service company fast before realizing that bigger often meant less profit. Long routes, callbacks, and overhead ate into margins until he sold the business and turned his attention to helping others avoid the same mistakes.
Today, as the owner of Business Modification Group, he’s one of the leading brokers for HVAC, plumbing, and electrical companies, having sold hundreds of service businesses across the country.
From his front-row seat in trades M&A, Patrick has seen the same pattern again and again: companies plateau at $3–5 million because of five key blockers that have nothing to do with sales volume. He breaks down how sloppy books, weak service mix, and poor route density quietly cap growth, and what to fix if you want to build a company buyers actually fight over.
In this episode, Patrick shares what separates businesses that stay stuck from those that scale profitably. It’s an honest look at what growth really costs, how to protect margins as you expand, and what turns a busy operation into a valuable asset.
What You Will Learn in This Episode
• The five most common blockers that keep home service companies stuck at $3–5 million
• How Patrick’s experience in pool service revealed the hidden costs of growth
• Why route sprawl and callbacks quietly destroy profit margins
• How clean financials can add hundreds of thousands to your sale price
• The difference between service-driven growth and construction-driven chaos
• When to add managers, and when they just add overhead
• Why maintenance agreements done wrong become liabilities, not assets
• How to build route density that multiplies profit without adding trucks
• What buyers actually value in HVAC, plumbing, and electrical companies
• Why smaller, tighter operations often make more than “big” ones
More From Profit & Grit
Book your complimentary Financial Insight Session with Tyler Martin, fractional CFO for home services and the trades, here:
http://cfointrocall.com
Learn more at http://cfomadeeasy.com
Follow the show for weekly interviews with HVAC, plumbing, and home service owners and experts who share what it really takes to grow, scale, and profit in the trades.
If you listen to any of the following shows, we’re sure you’ll love ours too!
To The Point Home Services Podcast, Toolbox for the Trades, Masters of Home Service, Home Service Business Coach With David Moerman, BlueCollar.CEO, The Home Service Expert Podcast, Next Level Pros, Blue Collar Business Podcast, Home Service Millionaire with Mike Andes, The Contractor Fight with Tom Reber, and Blue Collar Success Group
🎙️ Profit & Grit by Tyler Martin
Real stories. Real strategy. Real results for service-based business owners.
🔗 Website: ProfitAndGrit.com
📍 LinkedIn: linkedin.com/in/thinktyler
📸 Instagram & TikTok: @profitandgrit
Tyler Martin, a fractional CFO for home services and the trades
📅 Want to grow your business with smarter financial strategy?
Book a free intro meeting
Chapters
1. Opening: Buying Opportunity vs. Nightmare (00:00:00)
2. Show Intro and Tyler’s Premise (00:00:09)
3. Meet Patrick Lang and His Background (00:00:32)
4. People-First Leadership: Customers and Staff (00:02:35)
5. Hiring Slow, Firing Late: Hard Lessons (00:05:28)
6. Simple Numbers, Key Metrics, and Learning Costs (00:07:22)
7. Bigger Isn’t Better: Route, Pricing, Windshield Time (00:10:57)
8. Growth Eats Cash: Why Profit Lags Expansion (00:13:12)
9. Breaking Through $1M, $3M, $5M, $10M Ceilings (00:16:42)
10. Are You Ready to Sell? Valuation Reality Checks (00:20:03)
11. Four Must-Fixes Before Selling (00:22:40)
12. New Construction Risk and Market Perception (00:26:22)
13. Should You Grow by Acquisition? (00:28:02)
14. Integration Pain: Culture, Accounting, and Timing (00:31:36)
15. Recurring Revenue: Maintenance Plans and Liabilities (00:35:13)
16. The 1–10M Sweet Spot and Who Should Sell (00:38:12)
17. Choose Your Lane: Profit, Lifestyle, or Scale (00:41:21)
18. Mantra, Resources, and Patrick’s Links (00:44:54)
19. Host Takeaways and CTA (00:48:52)
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