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.
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…