Next Level Pros: From Stuck to Sold – The $18M Turnaround Story Every Business Owner Should Hear

Host: Chris Lee
Guests: Elaine and Todd
Date: October 14, 2025

Episode Overview

In this episode, Chris Lee sits down with Elaine and Todd, former owners of a successful HVAC, electrical, and plumbing business. For 15 years, their company experienced steady but stagnant growth, hovering around $3 million in annual revenue. A series of mindset shifts and operational changes propelled them to nearly $20 million in annual revenue, making them an irresistible target for private equity acquisition. The conversation dives deep into the challenges, breakthroughs, hard-earned lessons, and specific strategies that drove this dramatic transformation. This episode is a “wake up call” for founders stuck in a growth plateau and anyone curious about building a lucrative, sellable business.

Key Discussion Points & Insights

1. The Breaking Point: Outgrowing Old Mindsets

• Stagnation Despite Success: For over 15 years, the company had “solid margins, good reputation, and completely stuck.” (00:00)
• Year after year, they asked, “how do we do what we do different?” The breakthrough came when they realized, “a business can only grow as much as its owner’s mental limitations.” – Elaine (02:00)
• Pivot to Personal Growth: Elaine sought her MBA; their personal journey was mirrored in the business’s transformation.
• “The business only grows as fast as the owner does.” – (00:23)

2. Key Strategic Moves

• Seeking Outside Perspective: Joined Nexstar Network—a group of 300+ successful contractors. “Let’s just copy and do what other successful businesses are doing, and we can’t help but be successful.” – Elaine (02:59)
• Personal Development: Invested in Tony Robbins events to “get out of our own way.” – Todd (03:32)
• Expanding the Service Offering: Initially held back by the desire to dominate the electrical trade, they realized “the big money is in HVAC and plumbing.” – Todd (04:07)
• Killing the Ego: Set aside pride (“We’re in business to make money… we can do what these other big players are doing.”) – Todd (05:38)

3. Shifting Metrics: Beyond Vanity

• Focus on profit, not “trucks on the road.”
• “We realized we don’t care how many trucks we had. What we cared about was that net margin, that EBITDA number.” – Todd (06:59)
• Maintained healthy margins:
  • 65% Gross Margin (07:28)
  • 15-17% Net Margin (08:11)
• “Revenue is just for the ego. Right. Profit is where all the sanity is.” – Chris (07:12)
• Mantra: “Do we want to do a $5 million company at 20% profit or a $10 million company at 10% profit? Twice as much work for the same amount of money.” – Elaine (08:17, 08:36)

4. Financial Discipline & Reserves

• Kept “six months’ worth of money… liquid, usable for the company” in reserves. – Todd (11:00)
• On debt: Paid for at least half of their fleet outright; leased or financed the rest as needed. “Half of our fleet had to be paid for at any one time.” (11:57, 12:25)
• Philosophy: Avoided being beholden to banks; relied primarily on internal capital and cautious lines of credit use. (13:44)

5. Regrets & Lessons Learned

• Wished they’d added HVAC and plumbing much earlier. “Not getting outside of the ego earlier on…” – Todd (13:09)
• On multi-location: Opened a Seattle branch, which failed due to lack of strong management. “You’re only as good as your management team.” (15:48)
• If starting over: Would focus on “adding more streams of revenue” (restoration, roofing, pest control, etc.) locally before expanding locations. (16:22)

6. Strategies for Adding New Services

• Only diversify once existing lines are “super profitable… running like a well-oiled machine.” – Todd (17:35)
• Leveraged existing client database: Offered free tune-ups to electrical clients to launch HVAC/plumbing. (19:25-19:58)
• Honest about learning curves and capital required to successfully layer in new services. (18:05)

7. The Sale: Private Equity Insights

• Burnout and industry momentum (others selling) prompted the decision. (22:10)
• Initially received a lowball offer; hired an investment banker who “instantly gave me a number” in line with their expectations. – Todd (24:15)
• 20–25 initial expressions of interest (IOIs), eventually narrowed to five strong letters of intent (LOIs). (25:58-26:43)
• Due diligence lasted about 120 days; was “8 to 12 hours a day, days upon days, which turned months into months.” – Elaine (28:20)
• Notable deal lesson: No tax distribution on rolled equity. “We get a K1 and… pay income tax on money we don’t get a distribution on.” – Todd (30:04)

8. Post-Sale Reflection

• Watching “your baby” change under new ownership is hard—“not always pleasant to watch them make the changes that you built.” – Todd (31:58)
• Employees often adapt well to new boundaries set by private equity; their own ego may have limited employee potential. (33:14–34:12)
• “I highly recommend it.” (selling and moving on) – Todd (34:29)
• Adjusting to retired life takes time. “It literally took like three, four months for me to kind of just settle down…” – Todd (34:47)

9. Life After the Exit

• Spending more time with family and pursuing new projects.
• Elaine wrote a memoir: Made in Vietnam—her story growing up Amerasian in Idaho and discovering her “why.” (35:36–36:40)
• “Becoming more in the United States of America. Because it’s our capitalism and free market that allows us to thrive and grow. And that’s how I pay my gratitude.” – Elaine (36:20)

Most Notable Quotes & Moments

• “A business can only grow as much as an owner's mental limitations.”
  – Elaine (02:00)
• “We realized we don't care how many trucks we had. What we cared about was that net margin that EBITDA number.”
  – Todd (06:59)
• “Do we want to do a $5 million company at 20% profit or a $10 million company at 10% profit? …Twice as much work for the same amount of money.”
  – Elaine (08:17, 08:36)
• “If you can do it with your own money, that's way… a much easier process.”
  – Todd (13:46)
• “You're only as good as your management team. If you don't have a good team that can run it without you there, it's just not gonna work well.”
  – Todd (15:48)
• “We leveraged our database... you get a free tune up because you just did electrical work with us…”
  – Todd (19:58)
• “You took 21 years to build something and… they're just going to do what they're going to do.”
  – Todd (32:25)
• “I highly recommend it.” (selling and stepping away)
  – Todd (34:29)

Timestamps of Key Segments

• 00:00 – Introduction: The discomfort of “fine” and the need for owner growth
• 01:20 – Timeline: 15+ years at $3 million; what changed
• 02:00–03:40 – The wake-up call & investing in personal development
• 05:38–06:49 – Killing the ego and focusing on what truly matters
• 07:04–08:36 – Margins over metrics; the profit versus revenue debate
• 11:00–12:48 – Cash reserves, philosophy on debt and financing
• 13:09–17:02 – (Regrets) Why they didn’t move into new services sooner
• 18:34–21:00 – Tactical move: using existing client base to launch new services
• 22:10 – Deciding to sell (burnout/friends selling)
• 24:38–28:20 – The sale process: offers, due diligence, stress
• 29:42–31:58 – Deal insights: pass-through taxation issues and watching post-sale changes
• 33:14–34:12 – Realizing the team thrived without them post-exit
• 34:29–36:40 – Life after business, new endeavors, and Elaine’s book
• 36:20–37:04 – Final words of gratitude and legacy

Closing Thought

This episode offers a clear roadmap for business owners yearning to scale and eventually exit on their own terms. Elaine and Todd’s story is a masterclass in embracing humility, focusing on value over vanity, and understanding the personal growth required to break through ceilings. Their candor about the pressures and rewards—both before and after the sale—make this episode essential listening for entrepreneurs at any stage.

Recommended for:

• Owners stuck in “good but not great” mode
• Entrepreneurs considering private equity exits
• Anyone struggling with ego, focus, or strategic growth decisions

Listen to the full episode for in-depth anecdotes, tactical discussion, and more of Elaine and Todd’s remarkable journey.