How to Maximize Your Profits
Estimation and application tips and techniques for the painting contractor.
by Jeff Davis
— not just the price of the job — to grow profits. Most contractors simply try to get as many jobs as they can, submitting dozens of proposals and hoping that somewhere they’ve come in as the low bid.
No matter how many bids you submit, however, there are only so many jobs you have the capacity to take on at any one time. You can bid on 50 jobs a month, but if you can only handle 12, all those extra bids are a wasted effort. The key to profitability is to maximize the dollar amount you earn from each of the jobs that you do take on, and that requires a little bit of selling on your part.
As a painting contractor, you can increase profits by demonstrating the value in your pricing and service, seeking out add-on opportunities to increase the scope of each job and investing in efficient techniques that will allow your business to carry out more jobs.
The first step in building your profit potential is setting the right prices for excellent service. Don’t be afraid to quote quality work and explain to the customer why each step is important. You might mark up your materials somewhat, but you can’t run a business simply based on markup. Therefore, the more value-producing labor you put into a job the more profit you will make.
For example, you may have a contract to restain a deck. You know that sanding the deck after pressure washing will help the stain look better and last longer. The temptation exists to skip that important step in order to keep pricing down, but as a professional, you know that not sanding will eventually lead to peeling because essentially you’re painting dirt, not wood. By taking the time to explain the importance of critical but often overlooked steps, you will be able to deliver superior workmanship and enhance your own profitability.
A crucial factor in winning jobs is showing the customer the value of your quote. One of the best ways to demonstrate this is by showing how your techniques are different from those of the competition. For example, if you are bidding for deck work, take a piece of cedar board 4 feet long, pressure-wash it and let it dry. Then sand half of it. Apply the finish to the entire board and show it to the customer.
Take care to listen to the real needs of your customers. If they are going to be moving in a few months and simply want their wood siding to be presentable, they may not want a high-end coating job. If they plan to continue living in their home, however, they can select from a range of alternatives that relate to the prep work, the quality of the coating, and maintenance that all can lead to a more profitable job.
Often, homeowners don’t know what they want when they bid out a job. By showing them options, you allow them to see the value of the higher-end product. Communicating with your customers will help you boost profitability today as well as tomorrow by building your reputation as a helpful professional who really listens.
You can also increase your profitability when you estimate a job. You may be called to a home to provide a quote for painting wooden fencing, for example. Take the time to see what else needs to be done to complement the work itself. The coating on the wooden patio furniture may be cracked, or the wooden swing set may look terrible next to the beautiful fence. Suggest to the homeowner that you can recoat those items, too.
When applying coatings, use spray applications and back-brushing. And be sure to invest in or rent the right equipment. Using scaffolding instead of ladders or renting a powered lift may add to your out-of-pocket expenses, but the savings in time far outweighs the cost of the rental. If you can get the job done in 20 percent of the time by acquiring support equipment, you can move more rapidly to another job. Meanwhile, you’ve impressed the home-owner with the quality workmanship you’ve provided all along the way.
The best means to maximizing your profitability is to do the job the right way and the most efficient way. Use your expertise to find a balance between speed and quality.
Jeff Davis is West Region Sales Supervisor for Akzo Nobel/Sikkens Wood Finishes.