The lure of owning a business, along with a slower economy, has swelled the ranks of painting contractors. Low cost of entry, minimal equipment requirements, and the attitude that anyone can paint has led many to start a painting business. Statistically, these new contractors are facing long odds—most new contracting companies fail within five years.
The chances for long-term success for these new contractors can be greatly enhanced if they take the time to learn some basic business skills and develop systems for their business. A contracting business involves much more than putting paint on the walls. Unfortunately, many overlook the business side of the equation and think that the only skill they need is the ability to spread paint. They worry more about what ladder to buy than what accounting software to acquire. They put more effort into selecting a paint brand than branding their business.
Certainly some level of technical ability is needed, but without marketing, sales, and administration there will be few opportunities to demonstrate those skills. Without the ability to generate leads, sell jobs at a profitable price, and manage the business, there simply won’t be any jobs. Technical skills alone will not make for a successful business.
The ability to generate a consistent flow of leads is crucial to any painting business. Doing so requires more than “word of mouth” or randomly placing ads. It requires a marketing plan, careful tracking and analysis, and an adequate marketing budget. It requires a consistent message and proper targeting. It requires a long-term commitment to building brand awareness.
Selling at a profitable price presumes that the contractor knows his actual costs. This requires an understanding of accounting basics, as well as an identification of the true cost of doing business. Ignoring expenses won’t make them go away, but will make it difficult to pay the bills. Perhaps more importantly, without an understanding of financial matters the contractor could easily wind up broke and in debt.
Whether a contractor works alone or manages multiple crews, he will have tremendous demands on his time. He must be able to prioritize, focus on the long-term, and deal with many different issues. This requires time management skills, leadership abilities, and the patience to train employees. It requires systems to operate efficiently and consistently.
Neglecting these facets of a paint contracting business does not mean automatic failure. But it can result in unnecessary stress, frustration, and wasted money. It can make it more difficult for the contractor to accomplish his goals and build his business. It can add complexity and problems to what is already a difficult task.
Starting a painting business is not rocket science. But it shouldn’t be approached in a lazy or slipshod manner either. It should involve careful planning and thought. It should involve a commitment to ongoing education regarding both technical and business issues. Doing so will greatly increase the chances for success.
Part 1 of this interview can be found here.
Q: What is the difference between owning a job and owning a business?
A: I define a business as a vehicle that creates steady, sustainable income. If you have passed the point of startup and have four or five years in business but still find yourself assuming all the roles in your company, you own a job. The business is you and you alone. A simple look in the mirror analysis can be done by answering one question. If there were to be an unfortunate turn of events and you could not work, would your company remain operational? Who would paint? Who would do the estimates? Sell the jobs? Would your family survive without you? It is scary to contemplate. Most of us like to think of ourselves as stronger.. more invincible than the general public. Unfortunately, fortitude cannot prevent bones from shattering if you are in a car accident. Things happen and insurance is only going to carry you so far. Every maneuver, every part of your plan should be executed to get you away from assuming all the roles in your company.
Q: A common complaint among painting contractors is the inability to find good help. What advice can you offer?
A: This is a difficult one, Brian. One needs to know their numbers and factor a payroll accordingly. If you can only afford a low wage, then your results are going to be predictable. Of course the wage offers no certainty of performance. One key is to refine your painting techniques for maximum efficiency and organize each task into a teachable system. Training is vital. Each worker needs to know exactly what his tasks are as soon as the truck pulls to the curb. If the leader of a crew walks into a job empty or short handed, his workers are going to do the same. The job is going to take longer and cost you more money. If instead the crew is proficient and knows what it needs to do, jobs are going to get done quicker. That frees up dollars that allow you to hire a better workforce.
Q: Painting contractors seem to very concerned about price. Is this a legitimate concern?
A: Not nearly as much as many would believe. Here is the statistic… One of out every five people makes a purchase decision based solely upon price. That leaves 80% of the people out there looking for more than the best price on merchandise or a service. If this wasn’t true, companies like Starbucks, Mercedes or Bloomingdale’s would not exist. These are premium offering companies that are in demand. What keeps them successful is that these companies know how to market and sell their products.
If you answer the homeowner’s concerns versus telling them what a great job you will do, you’ll get results. It is beneficial to listen to what a person is telling you during a sales estimate. Your ability to paint a straight line may pale in comparison to a mother that is looking for a paint that resists scuffs and can be easily washed. If you continuously touted your superior ability to paint you lost her because you did not address her needs. When it comes down to the part where you give her your number, the first thing out of her mouth may well be “That’s more than we wanted to spend.” Or, you may get the delay tactic of, “I’ll talk to my husband and we’ll get back to you”. The contractor walks out the door with resentments. After all, his presentation was pristine, he showed her pictures, supplied references, therefore it had to be the price. He couldn’t be more wrong but his ego will not allow him to follow up or take ownership of his mistakes.
One thing I have witnessed over the years that amazes me is the amount of contractors that mention to me that once they raised their prices, they actually got busier. That is a predictable phenomenon. If a business is selling quality, quality, quality, then turns around because they think price is so important and offers a low or medium rate, it triggers a red flag. You message has to be consistent.
Q: What is the single most important skill the owner of a painting company should possess?
A: The ability to request help. Once owners lets go of the reigns and are honest they realize they cannot do everything themselves. This opens the door for growth and working smarter. Its wisest to check ego at the door and always do what’s best for the business. Most often this means learning to delegate as much as your budget allows.
Ken Fenner is the owner of PressurePros, Inc and its subsidiary company, Restore-A-Deck located in Havertown, PA. Ken started PressurePros, a commercial and residential pressure washing company, in 2003. Employing union painters, an interior residential repainting division was added in 2005. While no longer performing painting services, Ken is familiar with the industry’s issues. In 2006 a company expansion was made to incorporate product sales. The Restore-A-Deck company is rapidly becoming an industry leader in the of selling high quality, eco-safe deck restoration products. Servicing several counties in Southeastern PA and having a database of nearly 800 customers, Pressure Pros, Inc has is one of the area’s leading companies providing deck restoration and pressure washing services. Ken’s formal education is in economics with a Bachelor of Science degree received from The University of PA in 1991. Ken is also a partner in CRK Holdings, a family conglomerate that operates Curves For Women and Cold Stone retail franchises. For more information on Mr. Fenner’s companies’ services or products you can visit www.pressure-pros.com or www.restore-a-deck.com.
Q: What advice would you offer to someone thinking of opening a paint contracting business?
A: Start your business with a plan. There are many aspects to owning a successful business outside of knowing how to paint or having a strong work ethic. Two of the most important things to address in a business plan are defining the job roles for a smooth operation and formulating a plan to make the phone ring.
In the beginning, a business owner will have more time than money so he or she will wear the hats of marketing expert, estimator, salesman, laborer and secretary. There is nothing wrong with this as it will give the new owner a true understanding of each role in the company and allow him to make educated decisions as his company moves forward and he focuses on making the business more profitable. Some forethought has to be put into hanging a shingle that reads “Painter For Hire”. There is only so long before someone assuming all the roles I listed above realizes that their time is being under compensated. By defining and analyzing each role in the company, an owner can have a standard of criteria to begin hiring qualified employees as his or her profits increase. Its important to understand personal limitations and not get caught in a conundrum of “nobody can paint as well as I can.” If a person comes to the realization that business management is not his forte then he may need to consider the need to hire someone to do the marketing and promotion of the business. It comes down about taking your strengths and capitalizing on them and surrounding yourself with a strong team to support your weaknesses. Every maneuver made during the startup phase should be geared towards that end.
Q: A frequent question on many contractor forums goes something like: “What form of advertising works best?” What type of advertising do you think works best?
A: This leads perfectly into my second criteria for success, making the phone ring. No one is going to start off with a customer database. The business is new, therefore it has no credibility in the marketplace. To begin building that consumer confidence that turns into sales one should approach marketing as a whole versus focusing on any single form of advertising. If you speak to any contractor he will tell you exactly what doesn’t work. Unfortunately, many forms of legitimate advertising get a bad reputation via this word of mouth. Often, when I inquire further, the pundits disclaiming a certain media’s failure to generate leads comes down to poor execution and tracking. Placing a single ad in the classified section is not going to generate enough leads to build a six week book. When looking at the ROI (return on investment) at that particular form of advertising, I find that it yields a good return. Its very important to ask the customer “How did you hear about us” and document the replies. Different things work for different areas. It takes a bit of fine tuning to get together the best forms of advertising that makes people respond.
Q: There are a lot of choices when it comes to marketing. How does a contractor avoid getting his message spread too thin?
A: I prefer to break down my marketing campaign into smaller, digestible areas. This is how someone on a budget can become a dominant force in an area. Your marketing should be based upon people seeing your message multiple times. The first thing that tops my list is to make sure the right people are hearing my message. If I were targeting higher end residential work, having people living on a fixed income would likely not get me the type of leads I would want to spend time upon. I like to utilize direct mail to generate these types of leads. There are services that offer very specific mailing lists to insure you are targeting people that can both afford your service and demand the quality you offer.
Once you begin performing jobs in the right demographic area, the ball begins rolling. Soon your yard signs, door hangars, flyers, direct mailings, and newspaper ads begin having a collective effect. Your name gets known within a defined demographic area. Statistically speaking, people may need to see your name seven times before there is enough built in credibility that will create an action on their part. If a new company sends out 10,000 post cards there is usually little left in the budget for subsequent advertising. I feel this is a huge mistake many contractors make. I have had much greater success sending out my message to 2000 people five separate times. Not only do I generate more overall leads than one mass mailing, Towards the end of my campaign my close ratio increases. People already trust me before I walk through their door.
Q: A lot of contractors think that referrals are the best form of advertising. Do you agree?
A: That can depend upon where the contractor is in his time line. Since we are discussing startup companies, the answer is no. There is a common misconception that just doing a fantastic job insures people will refer your company. That is just not the case. A painting job could have been done to near perfection but the homeowner may not have liked the overall process as much as the contractor may have thought. We are dealing with people and real people have emotional hot buttons. If the work was sold as nothing more than a paint job, even if it was performed well there is no emotional attachment. It was a paint job, nothing more, nothing less. There is no incentive for Mr. and Mrs. Jones to run and share your company name at their next social gathering. The reality is… they won’t.
I seriously doubt that any painting contractor would use a 1” sash brush to paint walls. It would be inefficient and the results would likely be less than desirable. It simply isn’t the right tool for the job.
Yet, when it comes to other aspects of their business, these same contractors often fail to use the proper tools. The result is the same as painting a room with a 1” sash brush—inefficiency and less than desirable results.
One example is accounting software, such as Quick Books. Such software, when properly used, provides a wealth of information about the finances of the business. That information does more than simply tell you your profit, it helps you make wise decisions regarding planning. And the best part is, you can accumulate years of data that is easily accessed.
Another example is web sites. I continue to be amazed at the number of contractors who do not have a web site. A web site provides 24/7 access to information about your company and is an invaluable tool in reaching potential customers. Hosting can cost less than $10 a month.
A third example is estimating software. There are an abundance of programs on the market, and while none is perfect, each provides an efficient and accurate method for pricing jobs. The savings in time is usually well worth the investment.
Using the proper tools helps you get the job done faster and with better results. Doing things the “old fashioned way” may be quaint and nostalgic, but it isn’t good business.