http://www.facebook.com/pages/Dunbar-Painting/114717271873459

New house on West 11th, see http://www.facebook.com/media/set/?set=a.295854320426419.83762.114717271873459&type=3 for interior and exterior photos

An example of our work, this house required significant prep prior to painting!

As previously mentioned, my first couple years saw myself pricing my work quite low. My competitors were people I was not including in my peers. My goal had always been to move into the realm of the higher end residential painters in my area: contractors I respected and looked to for advice. I realized that if I did not hire employees with experience, I could not do the jobs as professionally as I wanted, since my ability to run the business and do all the hard jobs was limited.
In hiring experienced staff, I must pay them a decent wage for which they could actually make a living from (or some semblance of). As well, I needed to purchase the proper equipment, I needed to be willing to get better quality paint, better quality sundries, take more time to do certain parts of the job etc. Basically, what was separating my pricing of now from before was the attention I spent in living up to what I proposed.
As a result, my pricing did increase dramatically. Not to be frightened away by this, but I was WAY to low in the beginning, only losing out to some college run companies. I still find myself in the mid range, but at least I am able to provide the service I am selling now.
As I develop systems, I will make my pricing even more profitable. The more I understand what can actually be done in a day, by certain people etc, the more cost effective each hour will become.
In the end, I did book more jobs with increased pricing, but also did not get a lot because not everyone has the budget, or the understanding of the costs in running a professional painting service. Many businesses many have less overhead, or just not understand the cost of running a professional service, or even take short cuts you don’t know about to make their lower pricing achievable. This is unfortunate and lowers the standard for contractors, like myself, who are trying to maintain a professional service with paid employees and high standards!

Lesson #1: The cost of doing business.

I am not talking about the emotional, physiological, and psychological cost here; although those are significant, I am talking about the financial cost of operating an effective business. In my first year I made the mistake of both matching other contractor’s “billable hourly rate”, and making that hourly rate on the lower end of the spectrum. The result was no problem acquiring jobs, but no real profit from doing them. Of course I thought I was doing fine, since I had no idea how much it was costing to run a professional company.
Over the Spring I started to really understand or try and understand the cost: insurances, work safe, direct costs: labour, indirect costs: overhead. From adding these pieces up, and estimating a total number of billable hours per year, with a strong focus on exterior painting, I was able to approach a more feasible hourly billable rate. In the end, I try not to give out a billable hourly rate, rather I price jobs with a contract price: with caveats where they are needed.

The idea of running a business, especially one in the finishing/restorative trades, was never about doing all the hands on work myself. I do enjoy painting, to some extent, but what I really enjoy is the process: developing systems to do the work, meeting with clients, employees, seeing stuff get done; basically everything involved. In my first couple years I neither had the right employees, or the experience to do anything but all the hands on work and all the business work.

Time For A Change

In an effort to hire summer employees I happened upon something far greater. A painter with more painting experience than me (but less business experience), and a lot of experience managing other painters. After working together for a bit, to iron out the issues we had with each other, we are developing a working situation that can only lead to positive changes. That change is my progression from doing everything, to focusing on the business side. With a trustworthy skilled employee both working for me and managing my other employees, I can stop stressing and micromanaging on the individual basis, and start focusing on other goals I have been putting off. I can progress to more marketing and sales, I can focus on bigger picture items such as company progression. I can do a lot of the business side of things during normal work ours instead of after a 10 hour day painting.

Although this transition is initially met with a reduction in sales: I spend more paying employees since I used to do all the work, coupled with the fact that I have to focus on being able to sell profitable jobs consistently, ultimately this gives me the space and time to develop a very reasonable crew and a continued supply of work.

So, with that in mind I would like to introduce Graham Laidlaw to my company as the Job Site Manager, as he will be an extension of Dunbar Painting.

So what can you do if people are price shopping? What if they tell you your price is too high? What if they tell you to do another estimate? What if they ask for more services/better products at the price you are given?

Well admittedly, when I first started I would have likely given in to any of the above and tried to rectify my price/service ratio in order to get the job. Now, I am confident with my pricing, confident with my service portfolio, and confident that when the job is done the homeowners/contractors will be happy with the product and service a long the way.

If someone says my price is too high, I tell them that I quoted the job for what I require to complete the job, with the proposed materials, by my company.  Ever company has different rates, overhead, other expenses, owners salary etc. This price is indicative of my company’s profile. However, if you are bidding $10,000 on a job that someone else is bidding $6,000 on. You have to wonder what kind of company they have that can allow them to complete it for $4000 less. Either their systems are so proficient, or in fact their entire company is deficient. Do you want to take that chance with the cheapest price?

What if they tell you do do anther estimate? Well do you remember school when you ask for a test to be regraded, the end result could be a worse grade not a better? Well if you ask for an estimate to be redone there is a good chance it will turn out identical, however, what if the estimator/ sales person missed something on the first pass and now the price is more? Be careful what you wish for!

What about trying to get better service/products for a the proposed price that go beyond the scope of the proposal? This is common. I give a proposal that outlines what I offer, what products I use, and for how much. I offer a section for addons, including service and product addons that increase the value of the job. As soon as someone sees these upgrades, they are thinking why can’t I have this for the same price as the original proposal? Well, lets face it, would I be in business if I continued to do unprofitable jobs? No! I need to make sure my jobs are profitable and done properly so I am not called back over the years.  I offer a proposal with all the service and materials required to warranty your house for at least 2 years, sometimes 5 years depending on the original condition. I am willing, for those people with the budget, to offer extended services and products that will enhance the warranty. This premium on service and products should also entail a premium on price. In the end, you get what you pay for…

Where does the cheaper price come from? Most contractors pay similar prices for paint. So, if you are hiring a painting contractor to paint your house and their price is 40% less than the other estimates, what are they doing? Less paint? worse products? less surface preparation? Is their overhead that low? IF that is the case, are they actually running a business, or just moonlighting as a painter.

A job sale price is composed of several things: materials, labour, overhead, and profit. IF you are getting quotes that range from $15,000 to $7500 you are going to be dealing with companies that either maximize or minimize each of those areas. If you go for the cheapest price you will be getting the cheapest materials, the least amount of labour, and have it done by a company that may be operating without the actual operating costs of a business. If they don’t last as a business, who will uphold their warranty?

My first couple years were hallmarked by offering a service that customers were happy with, but at a price that was just too cheap. So for all you lucky home owners that hired me before I raised my prices to reflect running a business, using premium products, and offering premium services,  you should be happy

Next time you get an estimate that is either much cheaper than the others, or much more expensive, take a look and see what they are offering. Ask questions about materials, labour hours etc… those kinds of questions will determine how important the job is to that company. An expensive company that is using top of the line products and has estimated a job at twice the others probably has a better idea of what the job entails and how to get it done right. Where as the company with the cheapest price probably will be doing the bare minimum. If that is what you want, then tell the contractor ahead of time!

After reading through this site, which clearly outlines the major mistakes small businesses make when sending out fliers, I have come to the realization that I have committed almost all the mistakes there. I have had little to no return on fliers, and mostly just window shoppers or people looking for the “low bid.”

I will redesign my flier hopefully and see if it generates any better leads.

A few mistakes I committed:

1. The title of the flier was either my company name, logo, or the service I provided. This site advocates the title of the flier to be a tag line. People don’t care what company it is until they have read through the flier to see if they are interested in what it is offering.

2. I listed services. Services are great, but it is easy for someone to read through the services and think how they do not need them. What this site recommends is listing problems and solutions. The solutions will be your “services”. For example instead of listing: interior painting, exterior painting, blah blah blah. Something like: Do you see cracking paint on your house? If so perhaps it is time for some exterior painting to rejuvenate and protect the surface ensuring less problems in the future.

and so on… read the site, and see what you can do!

-Coby

Dunbar painting

Anyway, when I finish reading, rereading and trying to apply the ideas of markup to my business to actually run at a profit, I will write a better review!

Generally there are rudimentary and expected aspects of  prepping surfaces prior to painting that must be done in order to offer a basic warranty. That being cleaning of the surface (be it washing, scrubbing, wiping),  scraping or removing any loose and flaking paint, sanding the peeling edges to ensure it will no longer peel, filling certain areas as needed, priming bare wood, filler, and drywall, caulking unsightly gaps, and ensuring the surface is once again clean before applying paint. With a few other things, these basic prep practices ensure that the paint will stick.

So what about clients that want more than the basic warranty, can afford more than the basic job?

There are other interesting products one can use, and procedures one can undertake that would both increase the worth of the job and the lasting of the result.

Spraying the entire surface with loxon sealer, or another clear coat sealer can help ensure the previous paint job won’t break seal when you apply the finish coats.  This is a value added product and procedure. Using the high build primer “peel bond” can help seal ugly wood surfaces and level out the valleys and areas where paint has chipped or peeled further beneath: alligatoring.  This is both a structural and aesthetic product and procedure. Further, one can use higher quality (read priced) paints.

So this leads me to two options.

Option 1: price packages: Bronze would be the basic pricing and procedures as originally outlined and be sufficient to uphold a 2 year warranty. Silver package would upgrade the paint, some of the products, involve using peel bond sparingly and spraying a the clear coat sealer. This would add a 25% price increase. The Gold package would have both a clear coat sealer and peel bond applied to all surfaces, as well as using highest grade paint. This would be an additional 25% on top of the Silver package. Each package pricing and offerings would be catered to each job so that the client can see what they are getting. Each package would increase the warranty years as well.

Option 2: In the proposal include the basic package. Then provide a number of upgrades and their prices. So people can pick and choose exactly what they want. Paint Upgrade: switch to a higher grade paint, and the price I put would be the difference in paint cost. Clear coat sealer upgrade: this package would price out the requirements for spraying clear coat on all surfaces. Peel Bond Package for spot priming or entire surface would outline the cost and advantages of that. This way customers can fine tune their pricing package to their budget and ensure they get what they want.  I can both explain what each procedure does, explain how it enhances the warranty, and enhances the job itself.

Thoughts?