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How to Double Your Painting Business in 21 Simple Steps…Part 1

By on November 14, 2011 in Business Practices with 37 Comments

Let’s preface this discussion by saying that there is no right or wrong size for a paint contracting business, no one size fits all. Crew size and configuration is completely dependant on the market you operate in and your potential to generate work. This discussion is geared more to the paint contractor who is in the first 5 years of business, and it is not based on empirical data, but rather my own 16 years of experience in hiring and employing painters.

The First Double: Going from One to Two

The Solo Show
Many, perhaps most, of us start out as solo operators. Taking on small paint jobs and executing them by ourselves. This is the simplest way to do business, and can either be a powerhouse of profit or a treadmill to burnout. That is up to you. I did it for many years before becoming an employer. At least 10 or 12 years in fact. I know all of the advantages and disadvantages to the model. And I chose not to spend my career in business in that mode. If you are reading this, I will assume you have done it too, and not go into the gory details. The solo show can be one of the most profitable modes to be in. You may not make as much money as you would like to, and you will have to work consistently hard, but it’s entirely do-able. Personally, I think it is great for specialists, such as faux artists, mural specialists, wallcovering installers, etc. For a paint contractor, it comes with limitations.

Owner and a Helper
Stop right there. No one wants to be your “helper”. What are you, Picasso? Customers don’t want to hire you and a helper either, because all a helper will do is slow you down and cost the customer more. If you need help, the customer will clean up after you, rinse your brush, fold your drops and help you load your gear.

That said, you are keeping yourself busy year round. Year round, for the record, means that you are working 40 hours/week about 50 weeks/year, yielding a 2000 man hour work year for yourself. You are likely working much more than 40 hours/week to get the projects done and keep the pipeline full for the future…marketing, estimating, selling, scheduling, procuring materials, billing, paying bills, etc.

This is Tipping Point #1…where you decide to slow things down a bit because its a rat race – and doing that causes you to miss growth opportunities – or you decide to grow. Not one for complacency, I have always avoided stagnation. Even down the road, when you land on the model that is best for you, the tweaking and internal enhancements you can make are endless. But at this stage, adding an employee, means you have just doubled the size of your business, at least in theory.

When making a hiring decision early in the lifespan of your business, it is good to be open to the possibility that you may be embarking upon a path of doing a bunch of hiring in the future – this will not be the only person you ever hire – so it is wise to put a few things in place right up front, to make your life easier down the road.

Such as:

1. Hiring takes time, and that time can take you away from the 100 other things you already do
2. Streamline your interview and hiring process by focusing on what is important
3. This means that you need to know WHO you are looking for
4. You probably shouldn’t hire someone with no experience whatsoever
5. I always avoided hiring family, friends and neighbors
6. Sometimes a 10 year painter can be the worst painter you ever met, no matter what they tell you
7. Checking references is well worth the time, just remember that they won’t tell you everything
8. The quality of the person is more important (to you AND your customers) than paint skills
9. Paying cash to your employees is a bad idea
10. Get advice on properly setting payroll for employees…bookkeeping services are helpful
11. Consider a transition from sole proprietorship to incorporation
12. A good attorney is helpful in business entity selection and maintenance of status
13. Get an accountant. You are now dealing with other people’s tax status and details.
14. Don’t try to be a bookkeeper, accountant or attorney
15. Do what you do best, which is delivering paint services
16. Get yourself as much education as you can on being an effective manager of other people
17. Back to #3, The WHO, a good person with 1-3 years experience makes a great hire
18. Reflect on the customer experience you deliver, and demonstrate it to your new employee
19. Give them lots of feedback, more positive than negative
20. It doesn’t matter if they don’t fold drop cloths like you, as long as drop cloths are well folded
21. Oh, and you also need a termination process in case things don’t work out. See #12 above.

Some of these things take time and money, which means that they will need to be built into your business as costs, which means that you now, more than ever, need to be aware of what you charge, which hits right at the estimating level.

Why is this important?

Now that you have an employee, you theoretically need more work. Where 2000 man hours/year felt booming when you were solo, its misery when shared by two. Doesn’t last very long. So, your goal at this stage is to get employee #1 up to speed and profitable as quickly as possible. Where alot of businesses fail to make this transition successfully, is that instead of raising prices (for all the reasons we are discussing), they instead fall into the trap of lowering them because of pressure to now keep 2 people busy instead of 1. If you cannot sell at the price you need to sell at, go back to what you were doing as a solo operator until you figure it out.

How is profit measured now that you have an employee?

At this stage, same as it ever was: by the job; by the week, month, quarter and year. If you were hitting 15% net margins over the course of a year, you should make sure you can hit that with an employee. In other words, if you had gross sales of $100k as a solo, at 15%, then your net was $15k. With an employee, you might now do $200k, and if you hit 15%, you net $30k. But it costs more. Overhead can feel a little stiff at this size. The bookkeeper and accountant referred to in the above list will help you understand your costs.

At this stage, the burden of profitability still falls completely upon you and your ability to properly train and manage. But guess who might be doing some of the training with the next hire you make? It’s an investment.

I wrote an article in my apc column last year that gave very specific real world examples of how this stage of growth sometimes goes for paint contractors. It was one of the most popular and well responded to pieces I have ever written. CLICK HERE to check it out.

If this topic is helpful to you, please leave a comment or question below. If this topic generates a good discussion in the comment section below, I will happily return to bloggingpainters.com and continue it as a series outlining each stage of continuing to expand your paint contracting business through hiring good employees and building effective crews.

If not, I have plenty else to do! I look forward to hearing from folks who are in the early stages of growth, though, it is an exciting time, and you are very lucky to have so many good resources and online colleagues to tap into for knowledge.

Hope to be back for Part 2…

Scott Burt
Scott Burt owns and operates Topcoat Finishes, Inc. in Vermont, writes the monthly "From the Field" column in American Painting Contractor, and blogs prolifically at www.topcoatreview.com. Google
Scott Burt
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There Are 37 Brilliant Comments

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  1. Heidi Nyline says:

    Really great advice Scott.

    Few paint contractors truly understand what it takes to grow a company from a one man show to a company with multiple employees. Often the on the ride up the hill there is little or no financial gain (and if you aren’t careful – loss) and a ton of extra work. I think it is why so many end up going back to working for themselves.

    I look forward to reading more on this subject.

  2. A lot of good info you just put out there Scott.

  3. I, for one Heidi, am one that has yet to come to a full understanding. I think experiencing this such as you and Scott and some others have will be the only way to truly know. I say this in all seriousness, that writings such as this are most inspirational for helping me accomplish my dream in this business. I look forward to the following chapters.

  4. Chris Haught says:

    Great points Scott, and a lot of good takeaways. I agree strongly about getting professional help for the accounting and payroll, there are a lot of options and maybe a follow up is in order if there is interest!

  5. Ray says:

    Thanks for the article Scott,
    painters have very high ego! We think nobody can do our job better! We have to be able to move beyond that and trust others to step in and take care of certain things for us. The key is to find the right people (employee, lawyer, accountant, bookkeeper, etc.) and become a good manager of your business.

  6. Back in the day we had many seminars with, Len Fife, Monroe Porter, Irv Chasen all were very giving in the knowledge and great tips for growth.

    I see many so called contractors who dont have a clue what to charge for one man never maind two or more.

    • Scott says:

      Nick

      Times have changed and so contractors either change or sit around and complain. Thats what I like about networking with this group. They take action. I hope all of you guys stick around here at blogging painters and contribute thoughts. Thanks.

  7. Holly Kidder says:

    Thanks for posting this information. Really really helpful.

  8. Clark says:

    Reading articles like this, in a forum such as this make me feel like a kid in the candy store, I can’t get enough! Being a contractor in the 6-7th year, I found myself concurring with much of the strong points made. I look forward to the follow up chapters/feedback from others.

  9. Great article Scott. I’m in an interesting position where I work for my Dad in his painting company. I saw first hand while I was in grade school and then when I started painting in High School the transition he made from a solo shop to 1 and then multiple emlpoyees. The part I like the best is your advice on being careful who you hire. Our company got too big too fast and we didn’t have the right kind of employees. We had to take a step back, go back to being small (3 painters) and then build it back up. It’s been a journey but we’re now at 7 full time painters and hope to be up at 10-11 next year. The slogan I like best is “slow to hire, quick to fire” Your employees are your company and it was a good reminder.

    Thanks and I’ll look forward to part 2!

  10. Matt says:

    Scott,

    A very different perspective for me. I’ve worked on he other side of the business for a few years (paint sales) and its alway good to hear what happens behind the scenes. I’ve embarked on a new venture that you may be able to give me real feedback on. Some friends and I created a website, EasyPaint.com. It connects homeowners to painters. I know, you’ve probably heard or seen a hundred of these sites popping up but I’d like to think ours is different. We haven’t launched as of Dec 1st 2011 but will in a few weeks. You obviously have your pulse on the business side of things so your feedback would be important. No gimmicks just your take. Thanks in advance for any help.

    Matt
    Wash, DC

  11. Sounds like your giving away all the tricks of the trade!

    • Scott says:

      Just sharing info on a common obstacle that most of us encounter in growing businesses. If it was all the tricks, the list would be too big for a blog post. :)

  12. Dave Drew says:

    Scott,

    I’ve built my painting company up to 6 and 7 painters twice during the course of my painting career and always earned less money while working longer hours, and with more headaches the entire time. Plus, when a painter screws up once time, it can cost the entire profits on one job.

    I took my work to bed and I woke up with it while hiring employees.

    I also have a friend who built his painting business up to 35 employees and he also earned less money during that time and eventually got rid of everyone.

    Here in Arizona, there are so many companies bidding jobs so incredibly low, you have to have some way of avoiding them as competition, or you’ll never make any money.

    The plumbers and electricians here make $500 per hour when bidding on jobs, but it’s different with painting companies. You know that “EVERYONE” is a painter.

    When I figured out a way to make more money with less headaches, I stuck with that plan.

    I’m convinced that you can’t grow a residential painting business like you can a plumbing business, because it’s not regulated enough and everyone is a painter.

    Arizona is overrun with illegals doing all the work here, and I’m sure it’s like that in many states since there are more than 14 million of them here now.

    I’d like to hear your comments.

    Dave

    • scott says:

      Dave

      What you are describing usually points back to ineffective hiring, training and supervision. It can take 2-3 months to put the right platform under the right people. There are some “sweet spots” for profitability in different crew sizes and configurations. Going from solo operator up to a crew of three, then working towards doubling that is the first hurdle. Too many contractors either do it too fast, or too slow. Planned and controlled growth is best. Not letting the workload dictate crew size, but letting crew size determine workload.

      • Dave Drew says:

        I think what it boils down to, is how much stress do you want, how many hours do you want to work and how much do you want to make for the amount of hours it takes to grow in a painting business, compared to any other niche.

        Any business owner I’ve ever talked to, has admitted the same. Working long hours, taking their work to bed and waking up with it … and not enough reward for the time.

        When I say, didn’t make any money, I meant worth the time and effort. I made a profit, but it wasn’t worth justifying the amount of time and energy. The same with my friend. He made a little extra, but he said it was sucking the life out of him and taking away from his time with his family.

        Anyone who is good enough to supervise a crew will usually start their own company before long. Plus, the profit margins are so low in the painting industry, paying a supervisor only cuts more into those profits.

        I want a business where I can lay in bed at night and not have to plan out exactly what every employee will be doing the next day, or worry about them screwing up and costing the profits, or stealing from my clients.

        In a tough economy, you have to bid tight on jobs, because everyone knows they can get the job done for cheap – and they will hire the gypsies and illegals to get it done for cheap – especially here in Phoenix.

        I don’t know if you’ve ever spent time in the Phoenix area and checked out the painting companies who have employees. Everywhere you can find any number of painters working on a job site, they are illegals getting paid $6 per hour, and they work their tail end off for that money. The bids are so low, they have to hire illegals to make any money.

        It’s going on everywhere around here and you can’t compete unless you operate illegally. Not for me.

        Have you heard anything in the news about sheriff Joe cracking down on the illegals and all of the politics involved? He is doing his job, but it’s hurting the rich people around here who hire those illegals – and those rich people are spouting to their friends in DC. When you go into a city and bust several large businesses that hire 20 plus illegals in one business, and those businesses are owned by local politicians, the obvious will eventually happen – and it has. DC has stepped in and they want Sheriff Joe out.

        Running a painting company is not like running a plumbing company or electrical company where you can charge $80 just for the drive to a person’s home and bill them for it regardless of getting the job or not … and then charge $500 per hour with you bid, because you know you have them stuck with hiring you or they will be out the $80.

        Since everyone is a painter, people know you can get painting done for cheap around here. This industry is not regulated like other industries.

        I’m not sure what part of the country you are from or how many employees you have.

        I think it’s all about how much time you put in compared to the amount of money you make, and whether or not you enjoy putting the time if for the little extra money that’s made.

        I figured out a way to make more money working less hours, compared to when I had 6 employees – and I didn’t have to take my work to bed with me. Plus, it was easier work.

        Weighing out the profits on six employees and thinking about doubling that to 12, wasn’t all that appealing to me.

        I’d rather stay a one man show, work less hours and make more money working on plush jobs where I’m in demand … and the perks that went with these plush jobs were way better than if I had employees working who usually ended up screwing up or stealing from my clients.

        I hired one guy who seemed great. He was really nice and seemed honest, but was stealing my clients pills and I didn’t figure it out until the third time. I found out later that my clients were bad mouthing my company about having employees who were stealing their stuff.

        I had painters bang ceilings while rolling and ended up having to paint the ceilings and lost all profits on the jobs.

        I had an employee walk on the top of a stove and crush the burners. One thing after another.

        You can be careful all day long about hiring people, but the painting business attracts a lot more losers that seem like good people.

        It takes a fairly intelligent person to operate an airless and apply the paint properly.

        The good ones never lasted long, because they saw how easy it was to make money painting and they ended up starting their own business, just like I did.

        You might make a little bit of money at the end of the year with employees if you live in the right part of the country, but not here in Phoenix.

        I had a company not too long ago where we had six employees and didn’t have any trouble for three years. Why? it was the type of company and the type of employees.

        I’ve talked to many painting company owners and have always heard the same story. Long hours, stress, headaches and low pay for the time and effort.

        That might be for you and a few other people, but it’s not for me.

        Sure, you can grow and hire employees and double your employees, but I’d have to argue about the amount of profits compared to the time and effort in the painting industry.

        Towards the end of my painting career, I also noticed the paint chemistry changing in a lot of the supposed quality paints. I talked to one of the chemists for a major paint company and he said they have had to make some changes based on the regulations made by the states.

        I didn’t like how the paints were reacting there towards the end of my painting career. I knew there was something going on with the paint when it would not cooperate as well while applying it.

        When you buy the best paint and try to wash it off at the end of the day and you have to scrub hard to get it off, you know you have a great paint. But, when you notice the changes in how the same paint reacts and how much easier it washes off your hands at the end of the day, you know they’re messing with the chemistry.

        I became frustrated with applying those great paints towards the end of my painting career, because they didn’t lay down as easily. It’s nice when you can get a paint to cooperate and dry properly.

        As long as you enjoy your work, I guess it doesn’t matter how many hours you put in or what you deal with in the process.

  13. Scott says:

    Dave

    Sorry, I just saw this comment from a couple of weeks ago. Sounds like your business burned you right out. You obviously had horrible employee experiences, which points right at the hiring process. And it sounds like there were regional challenges. Every contractor faces all of these challenges. When you choose to be the owner, the problems often land in your lap, but you get to choose who gets to be part of the solution, on the internal and external sides. Once a good crew is intact, and the owner has a crew leader in place, responsibilities are shared across the company. It is a model that is no different from other small business types. Glad to hear that you navigated your way out of it and found happiness.

  14. I really liked reading this, it was very informative and helpful. I just saw it by googling. I have been following your blogs and Facebook. We do not have a very small crew now we have about 6-7 guys right now, but my husband is still running all over trying to do alot of it himself. Right now we need a project manager. We are trying to find a way to make it work and hire one. Our other struggle of course is having a great hiring process and finding good help!

  15. Pete Curtis says:

    good basic stuff, Scott. What have you written lately?

  16. Great post! Been reading a lot about tips for a painting business. Thanks for the info!

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