Five steps to starting a successful painting business: Sales

You may regard sales as a dirty word, but if you are going to have a successful painting business, you must accept the fact that you are a salesman. (Or you must hire a salesman.) If you are going to have a successful painting business, then you must be successful at selling paint jobs.

If you have followed the advice in the earlier posts in this series, you will realize that your selling price must be significantly higher than what many of your competitors charge. This is not an impossible situation, but it does require sales skills and a sales system.

There are many different sales systems that are effective and my point here is not to promote one system over another. Many factors are involved, including your market, your clientele, and your personality. The point here is to find a system that fits your needs and perfect that system.

Many painting contractors believe that a sales system requires a slick presentation, high pressure, and other tactics that they find uncomfortable. I personally find such sales methods contrived, often unethical, and generally ineffective.

I have found that the easiest, most natural, and most effective sales systems involve little more than having a conversation with the customer. Such a system is low pressure and informative. It creates trust and confidence.

A conversation however, can go in many directions, particularly if you do not take control. A customer may want to discuss issues that are irrelevant or of minor importance. A sales system will allow you to stay in control, direct the conversation to those issues that are most important, and yet do so in a manner that is not offensive or pushy.

As in every area of your painting business, a sales system will help you to achieve consistent results. Tomorrow I will offer some final thoughts on starting a painting business.

Five steps to starting a successful painting business:

Five steps to starting a successful painting business: Estimating

For a new contractor, estimating poses one the great mysteries of owning a painting business. (Estimating is also a great mystery to many seasoned painting contractors.) Yet, estimating is crucial to the financial success of the business.

An estimate is nothing more than a projection of the labor and material costs required to perform a specific job. An error as small as 10% can have a huge impact on the profitability of the job.

Many painting contractors–both new and experienced–believe that a painter should be able to look at a particular project and know how long it will take. This is the “eye-ball” method of estimating. And it is prone to numerous problems. Two of the biggest are that it relies entirely on the experience of the estimator and mistakes are almost impossible to identify.

But what if you could eliminate these potentially profit-destroying problems? What if you could estimate jobs accurately and consistently? The good news is, you can. If you have an estimating system.

A system is a specific series of steps that you take to achieve a desired result. If you desire consistent and profitable estimates, then having a specific process for estimating jobs goes a long ways toward making that a reality. (The quality of your results will depend on the quality of your system.)

Certainly, the “eye-ball” method can be accurate in many situations. If you are estimating a 10′ x10′ bedroom, an experienced painter will have a good idea how long it will take him to do the job. But on a typical job, with dozens of substrates and variables, this becomes almost impossible. Estimating is little more than a trial and error endeavor, and too many errors could prove fatal to your painting business.

Producing accurate and profitable estimates from the start of your painting company is possible if you have a system. However, even with accurate estimates, you must still sell the job. And that will be tomorrow’s topic.

Click here to learn more about estimating paint jobs.

Five steps to starting a successful painting business: Knowing your numbers

There is perhaps no area of a painting business that is more important than finance and accounting. And yet, this is the one area that painting contractors are typically the weakest. If you don’t know your numbers, you can’t charge the right price. And if you don’t charge the right price, you won’t be in business for long.

I regularly hear painting contractors claim that they have no overhead. This means one of two things: They really don’t have a business, or they don’t know what they are talking about. Neither bodes well.

The contractor who makes such a claim typically explains that he has a home office (no rent), relies on word of mouth (no advertising), has no employees (no labor burden), etc. However, overhead consists of much more than the items listed.

Overhead consists of insurance, vehicle and equipment maintenance, depreciation on equipment, postage, office supplies, professional fees, training and consulting, owner’s salary, and much more. A contractor who truly has no overhead has no insurance, no equipment, does not pay himself a salary, and does not use a lawyer or accountant. Without insurance or equipment, can he really call himself a contractor?

Understanding your overhead is crucial to identifying the selling price you need. If you do not recover your overhead in your selling price, it will come out of your wallet. Which means, you will make far less money than you think you are.

Another common misunderstanding relates to profit and owner’s salary. Many believe that the two are synonymous. They are not. Owner’s salary is what you are paid for the investment, time, and effort you exert on behalf of your business. Profit is what is what is left over after paying all of your bills–including owner’s salary.

A further confusion relates to gross profit and net profit. Gross profit is what remains after paying job related expenses, such as labor and materials. Net profit is what remains after everything–including overhead–is paid.

These numbers can vary widely between companies, and therefore, it is imperative that you understand your numbers. If you don’t you cannot establish a profitable selling price. If you don’t you cannot estimate profitably. Tomorrow we will look at estimating.

Five steps to starting a successful painting business: Systems

While I advocate having systems and procedures for every task in your business, this usually isn’t practical or even possible for a business that is just beginning. However, there are some systems that are imperative. These systems involve:

  • Marketing
  • Finance
  • Estimating
  • Sales

The last 3 of these will be covered in more detail in the coming days, so my examples today will focus on marketing. But first, let us examine why systems are important and how they will help you implement your plan and accomplish your goals.

Systems provide specific directions for accomplishing a particular task. For example, if you wish to balance your check book there are specific steps that you must follow. The same is true for your painting business.

A crucial component of accomplishing your goals is to measure your actual results. Doing so provides historical data that can be used to make informed decisions and project future results. Let us look at marketing as an example.

There are an abundance of ways to market a painting company–yellow pages, door hangers, direct mail, magazines, newspapers, lead services, and much more. How do you decide where to spend your advertising money? And how to you determine if that money is being spent profitably?

To answer these questions intelligently (that is, which actual data rather than your “gut”) you must consistently obtain certain information. You must have a way to record and analyze this information if it is to be useful. You could spend hours at the end of each month going through your records and constructing the data. Or, you could have a system in place to record the requisite information as it comes in. The former can be time consuming and prone to errors; the latter is efficient and generally more accurate.

To illustrate further, let us say that you use 4 different methods for generating leads. Each generates a different number of leads, has a different closing rate, and generates different levels of sales. A system will allow you to quickly and easily compare these different methods–despite the fact that every number associated with them is different. A system will allow you to identify which you should continue and which you should discontinue.

The same is true in every area of your business. Systems provide you with a tool to consistently achieve the results that you desire. Tomorrow we will look at finance–knowing your numbers.

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