$31.25 per hour and I own the business--Input requested

Regarding find a reliable and capable sub or two: My thinking has been:
If the sub painter is good enough to work my jobs, he should not need me. He should have more than enough work for himself.

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I can appreciate where you are coming from, but feel this statement in incorrect
I feel you have chosen to believe this statement to support your decision not to find subs

It seems you are rethinking your decision not to use subs, so please excuse me for a moment to address this issue
Perhaps it will help ease your mind, or perhaps get it to the right place, frame of mind, for making a decision about this sort of thing (subs):

This statement, "If the sub painter is good enough to work my jobs, he should not need me. He should have more than enough work for himself.", operates under the assumption that any and every good painting technician will make a good business owner
This is far...far...from the truth

Most good painters, like most non-painting professions, are filled with great quality technicians, who don't know diddly about sales, marketing, profit margins....
I'm not saying none make good business owner-operators...just that most don't...just like in most every other profession

Being good at your job in no way shape or form makes you a good candidate for bossman

There are many good technicians that are comfortable owning their own business, but not comfortable (or good) at the marketing and sales end of the business
They would much prefer leave those details to you, and merely show up and work

If you keep this in mind, it may help you when looking for subs
It might get you out of the "I wouldn't join any club that would have me as a member" mentality that might infringe on your finding some good ones

JTP said:

Regarding find a reliable and capable sub or two: My thinking has been:
If the sub painter is good enough to work my jobs, he should not need me. He should have more than enough work for himself.

Click to expand...

Interestingly, before reading slickshift's response I focused in on the same sentence. I agree with what he said, and will add the following:

Keeping busy as a painter requires much, much more than being a good painter. It requires marketing, sales, and administration. I have subs who are very good painters-- they aren't good at marketing, sales, or admin.

A successful business requires a division of labor-- one person can't do it all. I handle marketing and sales. I have an office manager to handle admin. I have subs to put paint on the walls. In a sense, I handle the marketing, sales, and admin for the subs.

A business owner must pull together all the pieces of the puzzle-- marketing, sales, admin, and production. He doesn't necessarily need to be good at any of them, but he does need to be a good manager. He needs to hire/ train/ manage others to do these various things.

Many, many years ago I read a book-- MegaTrends. One of the points was that how a company defines the business it is in will have a huge impact on how it operates and its eventual success.

I could define my business in a number of ways. For example, I could say that my business is paint contracting. Or I could say that my business is sales and marketing. Each carries different implications and would dictate how I view my business. Both are true, but the latter makes me view my business much differently than the former.

The beauty is that we get to decide what kind of business we want to own. We get to choose what business we are in, and what that business will do for us.

Brian Phillips

JTP said:

Finding the right numbers for the sub and me: As an example, I have a couple of exterior re-paints scheduled for 2008 that are $10,000 jobs each. If my partner and I do all the work, we make a living wage--not great but somewhere around that $31.25 per hour discussed below. In order to sub out I'd have to bid the $10,000 job out at say $15,000. If I got the work at 15 grand, I am reasonably assuming a sub would take the $10,000 for the work. I am pretty darn sure that I'd lose the bid to another painter. A bid at $12,000 might work for me. If it did, the $2000 in my pocket seems a small amount for taking on all the responsbility.

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There are several errors in this thinking (I'm not trying to be rude or beat you up, just clarify how it works for me.)

First, you may not need to price the job any higher than the $10K, but let's assume you do. So? I am one of the highest priced contractors in my market. I learned to sell at a higher price. Thus, I can sell at a rate that allows me to pay my subs well and still make it worthwhile for me.

Second, if I was in the field I could only be painting 1 house per day. I would need to make all of my money based on my own physical labor (and perhaps that of my helper). This is very limiting, as I could only work so many hours per day and so my income is limited. But what if I could make just $10 per hour off of each person I had in the field? Suddenly my income is limited only by the number of people I could keep busy.

In other words, if I was in the field I would need a big piece of a small pie. Or, I could employ others, take a small piece of each pie, but create a lot of pies. And that's basically what I have done-- I try to keep a lot of people busy and make a small amount on each.

The bottom line is: if you try to share the same pie with more people, you will get a smaller share. But if you bake a bunch of pies, you can wind up with a lot more.

Brian Phillips

Thanks-Clarifications-More ???

First let me thank the people who have taken the time and energy to offer insight, ideas, and suggestions on this topic. Since I am the one seeking advice and counsel,I am very happy to accept any advice in a positive and non-defenisve manner. I am not offended at all when folks offer critical suggestions based on help I have solicited.

I'd like to respond,to some of the comments given so far.

slickshift: It is my fault not to have offered an introduction to myself. For better or worse, I will just give you a very brief summary of what I am doing in the painting business.

I retired from a state job and needed to supplement my pension. I began learning the painting trade as an apartment painter in California back in 1976. I continued to paint part-time all these years. Once I hung my sign up, my bookings started coming in just fine. I fumbled around with pricing issues, was getting so much work, I had to take on a partner. My partner, 20 years junior, is an excellent technician and has taught me more in 6 months than I learned on my own in 30. I never had the fortune to be an apprentice. So, I guess you could call me a glorified apartment painter even now. My partner has really blessed the business because he is a high end craftsman who is meticulous by nature and trade. He has produced no jobs, but can really get the work done. I have sold all the jobs, and cannot even come close to his talented painting work.

I am getting close to 60 these days and want to taper off the physical end of things and concentrate on selling, administration, booking, hiring subs if that is to be.

Now to the meat of your comment Slick-- Here is my problem as I view it relating the hiring subs where I live and work. I live in a poor, rural county in upstate New York. I believe the average wage is 28-30 grand a year. These folks don't have the money to hire any kind of painter and don't. So local people are not a source of work for us. The second home buyers are my main bread and butter and the relatively few professionals that have the income to support quality paint jobs.

There isn't all that much competition, but there is a very limited customer base to draw from. And even the customer base I cater to will put the work out there to the uninsured, donut heads running around with a pick up and sign.

Additionally, I do know a couple of pretty good painters who would love to have sub work. They are not business types, but can paint. But, and it's a very large BUT--they don't carry insurance or seem to care about the legal ramifications (liability, workman's comp, etc). That's a very difficult problem to solve if you want to use subs around these here parts.

So the logical question is, do you hire employees? I really don't want to do that. I like the sub idea far better--thus my request for help in thinking this through. I plan on speaking to an attorney about me carrying all the requisite legal requirements and still subbing. I don't know if that can be done in NY State.

Thanks much for your considered opinion and response Slickshift. You can be sure I am very serious about learning how I might begin to build a better business.
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Brian: You make a mountain of sense. My strong suit is marketing, not painting for sure. I think I could sell more jobs by concentrating on the marketing end. I would do that if I can solve the sub dilemma. I truly like the administrative end of things.

Making a lot of pies ala taking a small piece from each one is sort of like the Amway and franchising approach. Amway makes a ton and the franchise company makes a ton on the efforts of subs basically.

I would appreciate any input that you care to give. I have read many of your posts and respect your judgment and good thinking.

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RC--Good points. 2 grand is great money if you have all the bases covered. If you read above, you know that subs here may present a problem. Finding ones with the proper legal requirements will be an impediment. I have not attempted finding subs yet. I wanted to get input from here and then, talk to my partner about the possibilites. If I had 4 subs working this month and came away with $8000 gross for the month, I'd be pleased. I'd settle for far less of course if I could assure my customer was cared for and the work was done with pride and cleanliness. My experience in life points to a simple concept, yet one that can be difficult to achieve. Win-Win. If your sub is happy with the work and living he receives from me, than, I in turn, will be pleased with the proceeds of this relationship. I definitely believe in an unselfish, yet business like relationships that benefit all parties involved.
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timhag: I should have mentioned that $52,500 figure was gross. Except for paint, you have to subtract all the expenses, plus others for a net figure. I'm probably doing better than most professional painters in my county even at that. But, I think I can do better.

Thanks for the reminder about expenses.

JTP

Before you do anything with your business like expand or considering subs to take on the extra workload, raise your prices. Its as direct as that and goes for any type of business. Expanding is a great risk and a great hassle. All you end up gaining in many respects is being busier.. more paperwork, more employee cost, more estimating time, more marketing expense etc. It sounds like both of you guys have the painting part mastered. That's probably worth about 50% of your goal towards making money. The rest is going to be exactly what has already been mentioned. Market, sell and systemize.

You mention being in a low income area. Don't market your company there. Target areas that can afford a premium quality contractor. Get you and your partner into logo'd trucks and logo'd gear. Upsell wherever you can and don't sell yourself short on pricing. If you have any true hopes for expansion you may need to bill $50 per man hour plus materials and markup.

As a final note, I constantly hear "you would never get that price here." That's baloney. I charge triple what most guys charge and while I didn't start my first year closing a ton of sales I secured loyal customers slowly but surely. The one thing that kept me rolling was that I made money on every job. With a referral program and constant marketing to my existing database I have been able to whittle down my marketing budget to under three percent of my projected gross for this coming year. My gross billing can exceed $250 per hour with a two man crew because I focused on becoming efficient and systemizing methods that allow low skill labor to step in an become trained quickly.

In my opinion, you are not at the phase where expansion should be considered.

JTP - your way of thinking about money is so screwed up. Firstly good luck getting 210 perfect 8 hour working days. You will have to hustle alot to get that much work - obviously you are still in the mindset of worker bee and not the boss. And I hope you realize, that your customers have to pay you as well for all the days you don't work, they get paid for sick days, personal days, vacation days, they get paid for all the days minus weekends. Your thinking is so flawed. A more logical approach would be - need to gross in sales $250/man for 260 days. That would be - $65,000, now mind you that is still crummy pay for a business/working owner - so you have to get that off your helper as well and reap some profit. Now use your 'predicted' 210 workdays - instead of making $31.25/hr, now you have to charge $310 per day per man or just under $39/hour per man. Now that $10,000 dollar house that you think you finish in 320 man hours or two weeks with 2 workers - LOL ha ha ha ha. Pal I had a 380 man-hour house - the first of my season in '07 - and was me and a helper, and sometimes pro for several days - and between me running around getting crap, setting up equipment - waiting for the weather to cooperate, stopping early for predicted rain, etc etc etc. that job took 2 months! Anyways back to what I was saying - you think 320 man hours - now you have to charge $12,400 plus probably another $1,600 in materials, sundries, unexpected small equipment purchases, repair to pressure washer etc, etc etc, now your '10k' house is now $14,000! So now you were saying $62.50 double man hours and mistakenly thought you could get that done in two weeks - those were 160 double man hours silly that you said - so in reality you'll be working 160 man-hours and so will your 'partner' so it will take you a month not two weeks! But if you're lucky it will take 6 weeks - so your real wage will be about $25.83/hr - if you charge my rates, because you have to consider every single day and every hour as part of your wage - because when mother nature rains - you got no choice but to stop - and you don'e get paid for those days - so you have to average that out. At your silly wages of $31.25 and a home you think will take 320 man hours or 2 guys for a month if you're lucky - but really 6 weeks - your real wage will be: $20.83/hr.

Now you are going to run a fulltime legit painting contracting company from a lousy $20 bucks an hour???!?!?!?! You are crazy - you will be buried, and probably will have to do everything illegal - and go out of business. Rethink your numbers - this ain't a perfect world - even my numbers put into practice less money in the real world. A 'True' painting company will charge $60/hr per man on the job time - with no markup on materials - and even then you won't get rich. And true painting company would never say they couldn't get anymore from people - only street urchin fly-by-nighters think like that. I've been through battles with customers - and one thing I have learned - if you don't stick to your price - even if it means you have to price your 10k homes at 16, 18, or even 22k - then that's what you gotta do - or enjoy and be happy with your poverty. It's guys like you that let homeowners get away with cheap house painting - it ain't yours or my responsibility if a homeowner can't afford to pay a professional - there are too many laws on the books, too many safety issues, too much equipment, too much time spent chasing leads that don't pan out - to have to succumb to people not affording the proper price - it ain't our responsibility to aid our customers income by offering starvation wage paint jobs - if they can't afford it - then perhaps they can't afford the home their living in - krikes 10g's is a monthly mortgage payment for some of my customers!

I do know a couple of pretty good painters who would love to have sub work. They are not business types, but can paint. But, and it's a very large BUT--they don't carry insurance or seem to care about the legal ramifications (liability, workman's comp, etc).

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Of course, I agree with Brian and slickshift.

Our company subs a large amount of our work, and I believe that it will continue to be a very important part of our business.

About your statement of workman's comp: You may ask your attourney and insurance rep if NY allows the use of a "ghost policy".

Here in our state, owner operator's are not required by law to have worker's comp coverage, BUT for about $750 for the year they can opt to have what is known as a "ghost policy" absolving you as the company that is subbing out the work of liability, the customer of any blame if they are hurt on their property, and it will work in a year end audit as if they actually carried worker's comp.

Several of our subs are companies with 2-3 partners that paint.

They are awesome painters, have their own equipment, and rock out work. They refuse to carry worker's comp claiming they've been painting for YEARS and never had an accident and don't plan on starting.

Worker's comp could easily cost $15,000 for the year as much as we sub to these guys.

Now something to remember is that if they get hurt, they are not covered. AND if they have any employees THEY MUST have worker's comp for employees. Its kind of like paying DMV a fee to NOT have insurance.

For subs that are great painters, understand the risks they are taking and choose not to pay for worker's comp, it at least covers your butt, and absolves you of the financial liability come audit time. I wish these guys would take the high road, but that is their choice.

We often pay for this policy for them up front and take it out of their payout on the first job or two that they do.

If they refuse to do even this, then we don't sub to them, or we take out our % needed to cover insurance costs and more for admin fees, this usually gets them to go out and get it themselves.

For the companies with multiple employees that we sub to, all have insurance and worker's comp.

Also, a great place to look for subs: at your local paint store. Most technician minded painters(maybe lacking the marketing/admin, etc Brian talks about) put their business cards up at paint stores. We called maybe some 40 of these companies to interview to find our first sub.

Others we have found through our paint sales reps(SW, Duron, ICI, Ben Moore, etc). Get a free lunch out of your sales rep and sit down with him to figure out who he knows and who he can introduce you to. Chances are he'll know some good paint contractors looking for work.

So I don't know if that helps you at all where you are, but it is the solution that our attorney and insurance reps have come up for us here.

Best of luck to you.

Just think, every hour someone else is painting instead of you, is an hour you can be relaxing with family, or getting to know your customer better and looking for upsales, or figuring out from them where to find more customers just like them...

JTP responds to more input

Pressure Pro: You make an excellent point regarding raising prices before considering other alternatives. As I figure it today, I have perhaps 6-8 weeks of open time for the 2008 outside painting season. If the weather does not cooperate-- a lot less time. I think I can afford to try your suggestion about upping the proposal prices

Expanding into subbing or employees certainly creates some difficult hurdles. At this point in my business, subs may be unwarranted. I put the questions out there on this subject for just the sort of discussion which has developed.

I could market outside the area and get even more work and higher prices. Problem for me is travel time. I am rather comfortable in that my work has, thus far, required travel within no more than a 20 mile radious of home. Now I realize complaining about the poverty where I live and not wanting to drive too far to where the money is, may be a contradiction in my intent to make more money. And your point is well taken. Traveling to better fishing waters usually leads to a better catch. It is a definite point to ponder.

Thanks for your thoughts on this issue.
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plainpainter: I hesitated answering your post, but decided to respond anway. If you sell your jobs like your post to me, I wonder how you make any living. I didn't sign up here to be told how screwed up I was or am. I have a wife for that! (A little humor here plainpainter to break up your very earnest and grating post)

Now with that said, you had some excellent points in your post. And I'll bet, you are a great painter. If you'd tone the rhetoric down a bit and leave out the "You seem so stupid to me" attitude, you'd be a very effective teacher.

So-- I would appreciate hearing your suggestions and opinions without the condescending posturing.

I am not looking to build a multi-billion dollar painting organization. I do have a pension and the 52 grand is a tolerable wage to make when combined with my retirement money. I, of course, would like to maximize my potential and thought my example of 210 working days was a good model, not a model made in stone. It was only one example of how one might look at my small little world.
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Ethan- I will take your information about ghost policies to my insurance agent and attorney if subbing become a part of my business structure. Thanks much for that insight. And yes, I think I will raise my prices for the last bit of time I have to schedule for outside work in 2008. Thanks much.
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premier painter & prowall guy-- Thanks for reinforcing the notion that a forceful opinion need not be expressed in a confrontative and condescending manner.

JTP

JTP - don't listen to Prowallguy or Premierpainter. Sorry for the negative tone - but I felt you came so far from left field , you needed a good shake down. My thoughts are that I have made more money for less work than most other people - I am working for a lady right now as I am waiting for my springtime clientale - and she criticizes me, as I have no work now. But what she didn't realize is that I raised my price so much - I made more money this year than any other year - and worked only a 1/3 as much. If you use your models about how many days so and so - you are just focusing on staying busy, not making money. Sure I love what I do - and perhaps you have some reason for not wanting killer money - money is comensurate with respect - I don't care if you were a trustfund baby with millions, you still shouldn't undercharge. And would you want tthe frustrations of a painting company with all the liabilities and periodic meltdowns with unreasonable clients for short pay? You have to bill for everything - you have to know all your expenses, and you have to be comfortable with what's left over. Personally - my thoughts are, if you can get a stable job for 15/hr with bene's - you will make much more money than a contractor billing $40/man-hours, for much less aggravation. We don't have 5 day work weeks - unless you are the Interior King and are always billed out 6 months .

I just don't want you to fall into that mindset where painters start having more empathy for the customer than they do themselves. You owe it to yourself to be paid for holidays, rainy days, sick days, personal days, and vacation - you owe it to yourself that after you have paid for ladders, brushes, trucks, repairs, tarps, medical insuracne, liability insurance, comp, commercial plates, etc. To have a good salary plus profits to grow your company. One of my services I routinely gross about $150/hr for my work - but if you only knew how much equipment, advertizing, time on the road doing sales - I don't end up making much, not to mention the service never lends itself to actually being on premises for 8 hours. At most I can get a 4hr day.

If you want my opinion - exterior work is back breaking - I still do it because I am an idiot - but in reality it's really for guys with large teams, who work on quantity not quality principle. And you have to compete with immigrant labor more than anything. If you want to stay small, interior work affords the least overhead and investment, yet at the same time requires mastery to produce an acceptable product - and I believe with proper sales and very high standard and neatness etiquette and professional uniforms - that is the best avenue for making money - and there isn't ball busting work of scraping and grinding and inhaling paint dust at 32 feet - ugghhhg!

timhag & plainpainter

timhag--thanks

plainpainter--thanks for the excellent and heartfelt points you made in your last post on this thread.

I realize each person has different motivations and ideas about life and making money. Depending on many factors, a person chooses where to go and what to do.

I think the main point you make is: No one should sell themselves short. We all deserve to make a good living and one must charge the client for services rendered.

I do not look upon the customer in an adversarial way. Nor am I sucker for a person who owns a 1/2 million dollar get-a-way palace and is hustling for a painting deal.

If a customer calls me and my partner, they already know we aren't the least expensive professionals on the block. I do virtually no advertising with the exception of throwing a craig's list ad out there occasionally;and, every now and again, a short running classified in my local weekly just to keep my name out there a bit.

All our work, thus far, has been word of mouth or from the 4 x 8 banner sign (internet $19.99 you can have one too!) I have a 1999 Dodge Ram with pt, homemade ladder rack. Of course, I have JTP prominently displayed. But, that's not much of a budget and we do get lots of work. We have been busy all winter thus far and our interior work is booked through February and March may come in as well. The bids are out there.

Now, to be somewhat pre-emptive explaining the pricing issuing: One might make an legitimate argument that quality work at $31.25 per hour is a steal and that is the primary reason for me being busy. And you know, that might be exactly the reason we are busy. Generally, it has been my experience, that one reason rarely explains anything. Here is an interesting quote I've referred to many times:

I have not done a market analysis, nor questioned other professional painters in the area as to their pricing structure. I am beginning to think my partner and members of this forum, including you plainpainter are right in suggesting I increase my prices. I did mention in my last post I was going to implement this strategy for the last several weeks I have open for the outside painting season of 08.​

I'm not soliciting empathy at all. If anything, I believe I am in a power position. I am not playing with scared money. I can live off my pension alone if I choose to. I do not choose to at this point. It isn't only money that motivates me either. There is a tremendous satisfaction in growing one's own business from scratch and seeing it flourish. My experience has taught me that when you take care of another's need first and sincerely, you will be successful in the money and life game.​

When you can say, OK Mr. H/O, you have a proposal at $15,000 and mine for $20,000. Would you rather have an excellent, exquisite paint job, or two illegal aliens floating in your pool this summer? Once the H/O understands what he is paying for, we get the job. Now, this may seem somewhat contradictory to the nature of this discussion, but it really is quite relevant. I know I can make more money on some jobs. I don't know just how far to push that envelop right now relating to subs. I don't know if the market will bear it here. From what I am hearing on this thread, however, my first move is to forget subs and increase my prices. I can work smarter rather than harder and see how that goes.​

Regarding interior as opposed to exterior work. No question interior is less physical. But, I am more comfortable outside b/c I tend to be a bit sloppier and there is a little more wiggle room on this issue for the likes of me. Now, I am not saying I pour a gallon all over the new architectural shingle, but I have been known not to be super exacting. Interior work--well, I must force myself to pay far more attention. My partner brings me back to reality on just about every interior job.​

So my friend, thank you for your ideas and input. You make a lot of sense. If you can begin to view the world from others' eyes a wee bit, you will see not everyone wants the same things.​

JTP​