Podcast Summary: Next Level Pros – Episode #161

Title: From 38% to 55%: How David Mayster Mastered His HVAC Margins
Host: Chris Lee
Guest: David Mayster (Cool Mater Heating & Air, Lakewood, WA)
Date: August 22, 2025

Overview:

This episode is a powerful blend of a live consulting session and an immigrant success narrative. Host Chris Lee sits down with HVAC entrepreneur David Mayster to dissect the journey of scaling a trades business—in particular, the critical transition from being a technician to building and understanding a truly profitable company. Topics include margin mastery, pricing psychology, the hard truths of business partnerships, and David’s inspiring personal story of overcoming addiction.

Key Discussion Points and Insights

1. David’s Background: Immigrant Grit and Redemption

• Family’s move from Ukraine (2001): David describes the immigrant work ethic and facing early adversity.

• Personal struggles: David opens up about addiction and hitting rock bottom, finding his faith (16:14), and how a life-changing night in December 2013 turned him around.

  • Quote: "I felt chains ripping off of me… that was me being born again." (13:35)

• Why business? Originally wanted to be a pastor, but found his calling in the trades as a way to serve others and provide for family.

• Family: Married with two children; brother Daniel is his business partner.

2. HVAC Business Beginnings and Early Mistakes

• Startup (2019): Launched just before his son was born, with little understanding of business mechanics.

• Key mistakes:

  • Price by gut, not actual costs (26:40).
  • Under-accounting for critical expenses like marketing, labor, and future scale.
  • Lack of formal CRM tools—initially ran on spreadsheets and basic tools before upgrading to ServiceTitan (27:19).

• Quote:

  • "You price based on how big you are today, not how big you want to be." (25:49)

3. The Partnership Dilemma

• Friction with his brother-in-law partner: Differing mindsets—David wanted to grow and systemize, partner prioritized stable income and hands-on work (22:33).

• **Eventually bought out the partner amicably, emphasizing fairness and long-term vision over short-term comfort.

• Quote:

  • "If you want to be anywhere anytime, you have to buy your freedom." (22:33)

4. From Technicians to True Business Owners

• Learning margins the hard way:

  • Belief: Jobs were being priced at 55% gross margin.
  • Reality: Actual margin after review was only 37–38% (51:32).

• Why the gap?

  • Ignoring necessary future costs.
  • Discounts and negotiation leaking profits.
  • Pricing for today’s size, not the company he aimed to build.

• Chris Lee’s principle:

  • "Numbers don’t lie, people do. The beauty of accepting the truth is that's the only way to make change." (49:48)

5. Pricing, Negotiation, and Financial Structure

• No more negotiation:

  • Customers sense lower prices = lower value.
  • Negotiation undermines salesperson confidence.
  • Standardized pricing builds trust and predictability.

• Quote:

  • "When you give room to negotiate, it tells the customer, ‘I was trying to screw you to begin with.’” (38:03)

• Handle price objections with value:

  • "I can drop the price, but I'd have to cut corners. Which corners would you like me to cut?" (40:55)

  • Ask: "Why is it important to you that we're profitable?" to highlight warranties and company longevity (41:21).

6. Sales Team & Commission Realignment

• Old method: Paying percentage of gross profit incentivized margin-cutting.
• New method: Pay commission on revenue; prohibits negotiations and empowers true selling skills (75:57).

7. The Psychology of Home Services Sales

• Don’t make customers admit they are “poor”: Finance as a first-class offering, not a lifeline (32:05), opens up your entire market.
• Standardized offers: Too many options confuse buyers. Structure for predictability and simplicity (53:15).

8. Marketing: Investment vs. Cost

• Underspending on marketing hobbles growth:

  • Target 10–12% spend for scalable lead flow (62:38).

  • Must test and diversify—don’t “go all in on one hand” (66:56).

  • Viral hits rarely predictable; “marketing is a science, not an art” (69:12).

  • Social media giveaways with poor educational messaging flop—even a free heat pump failed to get entries (68:03).

  • Quote: "If you’re not spending enough on marketing, you’re not able to figure out how many more hands you could deal to find a winner." (66:56)

Notable Quotes & Memorable Moments

• On Faith and Redemption:
  • "I literally felt chains ripping off of me… that was me being born again." (13:35–14:10, David)
  • "A fool is wise in his own eyes… a fool cannot get instructed." (81:05, David)
• On Business Reality:
  • "If you’re not leading with financing, you make people say ‘I’m poor’—nobody wants to say that." (32:05, Chris)
• On Numbers:
  • "Numbers don’t lie, people do. And the exposure of the sins of the business is the only way we can make change." (49:48, Chris)
• On Negotiation:
  • "When you're willing to negotiate, it tells the customer: 'I was trying to screw you from the start'," (38:03, Chris)

Practical Advice and Process Changes

Action Steps for High-Margin Growth:

• Standardize offers to make margins predictable—aim for 55–60% actual, not theoretical (54:35, 57:14).
• Stop all ad hoc negotiation.
• Pay sales reps on revenue, not margin.
• Market to a broader customer base with strong financing offers.
• Spend enough on marketing to continually test, refine, and scale.
• Emphasize the value of company profitability to employees AND customers.
• Educate the team on the full numbers story, not just technical expertise.
• Focus business priorities: Company > Employee > Customer (44:47).

Important Timestamps & Segments

• Introduction and David’s immigrant story: 00:00–06:22
• Addiction, faith, and life transformation: 06:56–18:57
• Business formation, partnership, and early mistakes: 20:37–26:11
• Pricing pitfalls & standardization: 25:29–27:33; 52:33–54:52
• The power of no negotiation: 38:03–41:22
• Sales compensation best practices: 75:57–76:53
• The reality of numbers vs. belief: 49:23–54:52
• Marketing truths and science: 62:38–69:21
• Role of process and team mindset: 46:34–48:31
• Key closing takeaways and advice: 74:22–77:07

Tone & Language

Positive, candid, motivational, and often laced with humor and authenticity. Chris Lee provides sharp, no-BS feedback, while David is open, humble, and eager to learn, leaning into vulnerability for personal and business growth.

Conclusion

This episode is an MBA in trades business profitability and a deeply human story. David’s humility, willingness to confront hard truths (both personal and financial), and Chris’s actionable consulting deliver a playbook for any entrepreneur stuck in the technician-to-business-owner transition. Margin discipline, honest accounting, and courage to ask for help are the central themes that empower growth and scale.

For those looking to master their numbers and get real traction in their business, this episode is essential listening.