It’s Just Theory

Every so often I run into a contractor who claims that any talk about systems and best practices is a waste of time. It’s just a bunch of theory, and theory, they claim, is useless. Ironically, their claim is itself a theory, and a very impractical one at that.

If you were going to drive across the country, I doubt that you would just hop in the car and start driving. You would probably consult maps and develop a plan. You would consider numerous things: how far you would travel each day, places to visit along the way, weather forecasts, and more. In short, you would figure out how to reach your destination with the combination of efficiency and pleasure that you desired.

Of course, this would all just be a bunch of theory. Who knows what might happen once you get on the road? Why spend a bunch of time making plans when you might get a flat 100 miles from home? It’s better, the critics of systems would claim, to just start driving and deal with things as they happen.

Certainly, you could drive across the country without a plan. And you can build a successful business without systems. But you can also win the lottery.

Growing Pains

If you are like most contractors, you dream of growing your business. You may want to get out of the bucket and turn production over to others. You may want to hire a salesman or office manager. You may want to add another crew. Regardless of your own particular goals, growth can be a painful experience if it isn’t managed properly. And the key to properly managing growth is having systems.

Growth necessarily entails delegating tasks and responsibilities to others. If we want to get consistent, desirable results, then we must have systems in place to ensure that our employees are taking the proper actions.

When I first began delegating responsibilities, I often lamented the fact that my employees didn’t do things the way I wanted. It took me a surprisingly long time to realize why—I hadn’t trained them to do things the way I wanted. I assumed that they would somehow know. That erroneous assumption led to a lot of growing pains. Systems won’t eliminate all of the pains associated with growth, but systems will minimize those pains.

With systems in place, we have a process for handling the myriad issues that accompany growth.

For example, if we add another crew, we need to sell more jobs. And to sell more jobs, we need to generate more leads. When we sell more jobs, we have more customers to keep informed. We have more paperwork to keep organized. Without systems, we could easily find ourselves dealing with an endless stream of emergencies, jumping from issue to issue in an effort to put our the latest fire.

But with systems in place, we have a process for generating leads, for selling jobs, for communicating with customers. Fewer things fall between the cracks. We can be proactive and manage the company’s growth, rather than be reactive to the crisis du jour. And that is a lot less painful.

A Different Model for Paint Contracting

I’ve often heard it said that there are two types of painting contractors—those who focus on the technical side and those who are more oriented towards marketing and sales. Of course, a successful business requires the proper combination of both.

For the contractor who enjoys painting, sales and marketing are a “necessary evil.” He recognizes that, without some level of marketing and sales, he simply won’t have the opportunity to paint. For the contractor who is more inclined towards marketing and sales, production issues can be a constant headache.

Fortunately, there is an alternative to the traditional contracting business that allows each type of contractor to focus on what he enjoys. Indeed, I did this for several years, and it proved to be a win-win for all involved.

In the model that I followed, I offered a sales and marketing service for other painting contractors. They retained ownership of their company and were responsible for all production. I simply helped them with marketing, and then did all of the estimating for them. I received a commission for all jobs sold.

For my clients, they didn’t have to spend a large part of their day (or evenings) giving estimates. They could stay on the job and focus on production. They became more efficient. For me, I didn’t have to worry about production issues. I sold the job and then turned it over to them.

I won’t claim that this wasn’t without some problems. First, I spent an incredible amount of time on the road. My clients were servicing a large part of Houston, so I was giving estimates over an area of more than 1,000 square miles. That began to take a toll on me. Second, my clients were sometimes reluctant to do the marketing necessary to generate leads. Because of this, it was sometimes difficult to keep them with the backlog of work that they wanted. Of course, these issues can certainly be overcome.

Some might think it odd, and perhaps even damaging to one’s business, to work with competitors. While I still had my own contracting business, our service areas overlapped very little. In fact, I often received requests for estimates that were outside of my service area, but I was able to sell these jobs for another contractor who did service that area. So I was able to earn a sales commission and the contractor wound up with a job he otherwise wouldn’t have even bid on.

There are certainly variations to this model, but the important point is to create a win-win situation. And this is true whether you are the technician or the salesman.

Why are You Losing Money?

If your business was losing money, would you simply conclude that you need to raise prices and do so by some arbitrary amount? Or, would you sit down, analyze your finances, and determine a specific cause for the loss? In other words, would you just take a wild guess or would you approach the problem scientifically? Unfortunately, many contractors take the guessing route.

Certainly, not charging enough is a primary cause for contractors to lose money. But that fact alone does not tell us why a contractor isn’t charging enough. Perhaps he doesn’t know his true costs and isn’t recovering his overhead and labor burden. Perhaps jobs take longer than he expects. Perhaps it’s a combination. But he won’t know if he simply guesses.

While guessing may be fun at a carnival, it seldom is an effective business strategy. This is true whether you are trying to determine what you should charge for labor or whether you are trying to determine how long a job will take. To make accurate decisions, you must approach each aspect of your business scientifically, and this is particularly true of estimating.

Fundamentally, estimating comes down to identifying the time and materials required to complete a particular job. But we must do this before we ever open a can of paint. We have a choice when we are estimating a job: either we can guess, or we can approach it scientifically.

If you are estimating a simple job, such as a single bedroom, you might be able to accurately guess how long it will take. There are few substrates and other issues to consider. A small error won’t be financially catastrophic. But what happens when you are estimating a complete repaint of a 3,000 square foot house? The number of substrates, preparation and access issues, and other considerations rises significantly. A few errors could have a significant financial impact.

You wouldn’t paint this house in one fell swoop. You would approach it in a systematic manner—remove or cover furniture, prep the surfaces, paint, and then put things back. You would follow a series of steps to complete the job. The same approach should be used for estimating.

All things being equal, a painter should complete a specific task in the same amount of time, whether he is working at Mr. Brown’s or working at Mrs. Green’s house. If you know that time, then estimating becomes nothing more than a process of identifying which tasks must be completed and how much of that task is involved.

Of course, all things are seldom equal. Preparation will vary and access will be different. Surface textures will vary and other variables will come into consideration. But we can attach numbers to these variables, just as we can count the number of doors or windows.

Just as we attach a number of our financial activities—we identify how much of each expense occurs—we can attach a number to our production activities. By doing so, our estimating can become as scientific and objective as our finances.

In this regard, I am proud to announce Estimating Paint Jobs.com, a new project dedicated to helping contractors develop an estimating system.

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