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I did something that I found was necessary to understand my current market: I shopped my competition. I didn't do this the last time I had a painting business, and found that my pricing and marketing was way off. I wound up selling myself short by competing with the bottom of the pile in a game of painter limbo: "How low can you go?"

Problem with that scene is the answer: "Low enough to lose your @$$."

I'm starting a new venture here, in hopes of at least putting food on the table. I'm trying to stick with entrepeneurship, but wanted to share some initial findings.

First, the thought comes to mind: have any of you ever asked for estimates from your competitors? I'll be honest: I called a bunch of local companies and pretended I was having my interior re-painted. No, I didn't think it was a good use of their time, but how else can I know what I'm up against? Not knowing what's out there hurt me something awful last time I tried this. I don't want to repeat that mistake.

Second, here's what I found (I'm in south Idaho, BTW. The "project" was about 1,045 sf area-wise. Radius corners. Open floor plan. Light texture on walls--"orange peel." Currently off-white, eggshel/satin on walls. I was asking for the basic "paint the walls only, no trim, nothing fancy," type of job, just a simple color change, perhaps a "one coat wonder" with the possiblity of a second color with a very minor transition at a window.):

Bid one: $1.25-$1.50/sf of heated space. This turned out to be from a guy who was BEGGING for my business, was completely unprofessional, and reeked of smoke. I thought, honestly, he may have had a drinking problem as well. Terrible first impression. His bid was $1,350-$1,500, depending on if I had a color transition. This would be a two man crew, but he said he's SPRAY everything, and get it done in a day (unlikely time estimate and poor application given the fact that we are ALWAYS home and have 6 kids--he didn't bother to ask if spraying would work for my family, which no, it wouldn't.).

Bid two: $0.55/sf....!!!?! This freaked me the heck out, as this company has a 36-year reputation, good first impression, and has several crews (at least, this is what I was told). The ad's for this company suggests this is the case (BIG ads in several phone books). Said he could do it in 6-8 hours, with perhaps 4-6 guys working. At his bid, I thought, "I am completely undone. I can't compete." I still don't know how the dollars add up to profits for this company, and they are mainly why I'm writing this post. Their bid, paint included, was about $585. Nothing extra for a color transition. ?!

Bids 3-6: Estimates anywhere from $650 to $850 (with materials). That works out to be $0.62-$0.81/sf.

As a one-man show, this is going to be hard to beat, but this is the pond I am in.

One HUGE consideration: I live in a CHEAP neighborhood, so I know I don't represent the market I'd personally target.

Also: the market is slow right now, for anyone in the trades (in this neck of the woods). I think this may represent an answer to that trend.

'Nuff said. Thoughts?

--James H
 

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James

In this economy, if I had 6 kids and was getting a bad feeling about the market I am entering I would absolutely not do it.

Ride it out on someone else's books and make your move when the timing is better. You would be better off to go to work in the local paint or hardware store for $12/hr and get all the side work you can from people coming in the store. You could probably even get benefits for your family that way.
 

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Doing this is okay to understand your market. Do not base you bids on what other companies bid at. For instance, since Company A bids at $0.60 a sq. ft you will bid at $0.55. I never bid by the sq. ft. I go analyze what needs to be done, how long I can do it, and how much I need to do it for. Just because Company A bids at that price, doesn't mean you should base yours off of his. This can ruin you, and can do it quick.

Starting out bare bones, with no references, no contacts, no leads is tough. Especially with a family to support.
 

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James

In this economy, if I had 6 kids and was getting a bad feeling about the market I am entering I would absolutely not do it.

Ride it out on someone else's books and make your move when the timing is better. You would be better off to go to work in the local paint or hardware store for $12/hr and get all the side work you can from people coming in the store. You could probably even get benefits for your family that way.

I agree 100%, if the market is that tough why break yourself and put your family's future at risk?
 

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I normally don't like to comment on things like this.
I just cant believe you wasted other companies time and money like that.
There are plenty of ways to shop your competition WITHOUT wasting their time and money.
Really man, did you ever think of someone doing that to you.
Im sorry, but that is just ridiculous
 

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Alex

That occurred to me as well. It violates the code.

If you absolutely have to know what others are charging, which is irrelevant to what you should charge, there are other ways to get the information without wasting people's time.
 

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I too believe it was a waste of time to the other painters, but we also have to realize we ALL do bids that we will never get anyways. Don't cry too much for the other painter, either they didn't qualify this painter first, or they should have dead-end leads built into their overhead. Still it was a kinda tacky thing to do.

I'll admit years ago when I decided to venture out into commercial wallcovering, I was curious as to what the other companies charged per linear yard. I called them and asked them. Posed as a new business owner, and just asked what they would charge to hang some vinyl. Did I waste their time, maybe 5 minutes each. Was it wrong to do?

So, you guys who said:
There are plenty of ways to shop your competition WITHOUT wasting their time and money.
there are other ways to get the information without wasting people's time.
What would those methods be?
 

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What would those methods be?
If I did that sort of thing, I would do what you did and call them. Five minutes of wasted time on the phone is nothing compared to the rigamarole of going out to do an estimate.

Last summer, I was out in my yard one fine evening. A painter pulled up in a paint truck with business lettering, got out and approached me to inform me that he was spraying barn and garage roofs in the neighborhood and pointed out that my garage roof was rusting and flaking. He didnt notice my company trucks, lettered Topcoat Finishes right in the yard, or my pants with paint on them. He got quite far into his pitch before I could even get a word in to tell him that I was a painter. The two roofs that he did have since failed, but he was doing some fine canvassing and I didnt want to waste his time or hear his prices.
 

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What would those methods be?
I have had estimates of 7 local companies given to me in the last year by customers. Most of the time the customer asks me if I want them, others I offered a small discount if they would be so kind as to give me any other estimates they may have. I sold the jobs while others dropped of an estimate and hoped for a phone call. I love to see other companies estimates but I will not use deceitful tactics to get them.
 
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