One the final key pieces that I changed in my business when I attempted to overhaul the way money worked in my painting business was changing to weekly invoicing.
In the past I would take a large deposit - 25 to 50%, a progress payment on large projects, and final draw upon completion. I operated that way for 12 years or so. As mentioned in part one, the large deposit carries risk for both the homeowner and myself as the business owner. The large span between deposit and final payment also caused stress on cash flow because I often have little control on the project. There were times where general contractors would botch the scheduling or change specs and there went my profit. Other times homeowners would take 12 months to complete the other trades prior to me returning for final coat. Even with a 50% deposit, most of that goes to paint and materials, other job costs like fuel, business operating expenses and a little bit of labour. So I quickly found myself upside down on projects and that could last several months sometimes. Not ideal...
The decision to stop accepting large deposits had a ripple effect on the finances of my business in many ways.
The most significant adjustment that resulted was that I was no longer comfortable purchasing paint for my client's projects. It was too risky. Customers frequently change their mind, delay their projects, do it themselves, hire someone else, stop returning phone calls, or are indecisive about colours and sheens.
So with no or minimal deposits, it freed me from purchasing paint. This is a big change for a painting business. Most painting companies include paint in their quotes. This way they have more control over the materials they use and it can make things more convenient for the client.
But does it have to be this way?...
I've been thinking lately that a transaction between a home owner and a painting contractor is a very meaningful exchange, perhaps more than most other transactions.
In a previous post I've discussed that what we, as independent painting contractors, are in the trust business. I still believe that. I still believe that what clients are looking to buy is trust - trust that you know what you are doing, that you can solve their problem effectively, that you can join the family for a couple of weeks. Home owners need to trust you with their money, access to their home, care of their valuables and assets, safety of their family members, their schedule, etc. That is a lot of trust that they are shopping for. And all that trust has a high value to them - they are willing to pay a premium to deal with a company or craftsman they have confidence in.
But I no longer believe that what we are selling is trust. We should be marketing trust, our customers should be buying trust, but that is not what we are selling - the thing that we are exchanging for money is not trust, but it is even more valuable...
It's been a while since I wrote a post on this blog. I've just needed a break from the blog while I focused on other things for a while. If you've stuck around, thank you very much for your patience :)
The last couple of years have been full of challenges and there is always so much to do. The over-whelm gets to me sometimes as I struggle to tread water. Just the other day as I was commuting to work it occurred to me...am I so conditioned to work and life being difficult, that I have just accepted that it has to be that way? I know it isn't constantly hard for everyone. I work for a lot of people that have a pretty sweet life. But I also know that adversity finds everyone sooner or later, in one way or another. There is no escaping it. Maybe some of us get extra practice. Anyway, this is not a woe-is-me article. My life is pretty good overall, I know that, and I have much to be grateful for.
But I'm always looking for ways to make my life easier and it usually involves some type of simplification. Simplicity is often the answer when nothing else seems to be working. Back to basics!
Just finished reading the book Born For This by one of my favourite authors, Chris Guillebeau.
It is a good read and I may do a review sometime. But I wanted to share one simple and effective tool that I learned from this book that I've been able to use with success when it comes to managing multiple tasks on a given project...
Article by Seth Murphy
Tackling home improvement projects on a house you are about to sell can seem complicated. You have to anticipate what buyers want, make your house seem as universally appealing as possible and may not have the satisfaction of using your redecorated spaces.
Nevertheless, it’s worth it. The average home improvement can increase the value of your home by 9 percent. Depending on what projects you do, you may not have to spend that much money to get your house looking in top shape. Here are the main home improvement projects you need to consider if you want to increase the value of your property...
On this rainy West Coast Sunday morning I'm thinking about how many contractors I have personally talked to over the years that have told me that they grew their business to sometimes 2 or 3 dozen people, only to hit a major crisis (health, family, bankruptcy, lawsuit, etc) and decide to scale back, way back, to just themselves and a helper.
Like a cool Sunday morning rain, running a small business is just more laid-back.
Small is low risk. Small is low stress. Small is manageable. Small is profitable. Small is freedom...
So a few years back I was paying for my paint when my friend and colleague Mike walked in.
And that's when it hit me.
At the time I was busy and had a closing rate of about 1/3 of my estimates. But taking one look at my friend, I realized that if I was a customer, I would hire Mike, not me. Why?...
With all the heartbreaking natural disasters striking Mexico and the Caribbean this month, it got me thinking about the importance of taking small steps to prepare for the worst.
Living in Western Canada, I appreciate how quickly natural disasters can strike. Whether it was the wild fires that almost trapped the residents of Fort McMurray, the floods that instantly struck High River, Okotoks and Calgary, or the 'Big One' that the Pacific Northwest is anticipating. Living near a fault line in a subduction zone makes emergency preparedness is constant a concern. Everyone should have a Go Bag ready of course.
But I wanted to share another simple hack that can save your life in an emergency...
In an earlier post, I discussed the importance of Respecting Capacity.
But I've come to appreciate another facet of capacity that relates to our business - viewing capacity as an asset in your business and leveraging it for maximum profit.
Used to be that I got nervous if I was booked up for less than 3 weeks in advance. I was used to being booked 6 - 12 weeks out and that demand felt good, felt secure.
But these days...
The idea for this list came from a list Chase Jarvis made for Creatives, which was a variation of a list Guy Kawasaki made titled What I Learned From Steve Jobs.
Here is what I believe when it comes to running a small painting business:
1. There is no substitute for craftsmanship. Be wary of jobs where craftsmanship is not valued. Quality work should be non-negotiable.
2. Work begets work. Not busy enough? Get out there and add value somehow. The easiest way to find work is to be busy working. Too busy doing jobs you hate for people you don't like? Stop doing that, otherwise you will get more of it.
3. Profit is a proportional bi-product of the value you create.
‘FOLLOW YOUR PASSION’ '
FIND YOUR PURPOSE'
‘DO WHAT YOU LOVE’
These have become the de-facto career advice you hear these days. It’s as if we all need to be doing something incredibly inspiring and challenging in order to feel time spent at work is worthwhile. Does work need to be a spiritual, higher-calling endeavour to be satisfying?
Oscar Wilde is quoted as saying, ‘Everything popular is wrong’. Could today's popular career advice be wrong?
When we started our small contracting business, time is something that we invested heavily. Funds and experience and equipment may have been minimal, but time is something we all get an equal allotment of. If working for ourself is a priority, we will spend as much time as needed to get it off the ground.
The danger is that we stay stuck in departure mode. Imagine being on a long journey aboard a jetliner that was in lift-off mode for the entire 12 hour trans-atlantic flight. How stressful! Take off is exciting, but everyone's happy to sit back, take a deep breath and order a drink once everything is under control...
"Oh, I don't really have a business, I just work for myself."
Is something often heard out in the field. It sounds like a simpler, more manageable way to work independently without all the hassle of running a business. Who wants the headache? Get work. Get paid. Repeat.
But getting stuck in that cycle is a problem...
Over the years I've noticed that there are 3 quick, free and easy things that most experienced painters refuse to do that holds their quality back from producing professional results:
1. Caulk with a wet finger or rag, prior to painting. This reduces drag, leaving a smoother finish on the bead of caulk. It also prevents building texture with drag lines and tiny chunks of semi-dry caulk. The caulking deficiencies only look worse once painted, so proper application will give a better paint finish. Caulking applied after the painting is done will eventually collect dust, discolour and look unprofessional in a short time. Caulking requires top-coating with paint...
With a new year just around the corner, you as a business owner may be thinking about your sales numbers - what they were like this year compared to last year, what next year should look like, etc.
Like the economy, everyone assumes that a healthy business is a growing business. Progress and increase are quick validation that we are working hard and things are going well. If you are not growing you are shrinking, contracting, losing market share, in a recession...all negative sounding things we have been conditioned to have an aversion to.
Let's assume for the sake of this blog post that growth is good, necessary even, for your micro-business. We want to measure our efforts and see fine results: higher sales, and more importantly - higher profit...
At this time of the year many people begin thinking about what goals they may want to set for the coming year. I've always appreciated the importance of having goals, but have always struggled with the achieving of them. Here are a few things I have learned about goals over the years, as I have begun to use them as an important tool in feeling like I'm moving forward in my life...
When painting a room I find that having a system leads to the most efficient and consistent results.
One simple part of my system is working left from the entrance into the room and proceeding from left to right, top to bottom. This way nothing gets missed and no time wasted deciding where to start.
Another part of my system is to...
As a former high school drop out, it is not my place to say that getting a degree is a bad idea.
However, it is clear that education is changing fast and that the cost:value ratio of traditional post-secondary institutions is becoming more of a burden than an asset for many students.
Technology, industry and economic shifts are developing so fast that a 4-year program is sometimes obsolete by the time you graduate.
The skills that seem to be valued in the current job market are adaptability, life-long learning, working with others, project management, entrepreneurial skills, value creation (rather than getting paid to 'show up'), problem solving, social influence and so on. It is a dynamic work-scape out there, with few guarantees or long term commitments on both sides of the employer/employee divide.
I'm definitely not an expert on any of these issues. And there is no question that some types of post-secondary training can lead to higher paying work. Having a basic high-school education these days doesn't open a lot of career doors. I just thought it would be practical to think about whether starting a painting business is a viable option for a young person, as opposed to pursuing 'higher education'.
The cover story on the August 2016 issue of Consumer Reports stated that 42 million people owe $1,300,000,000,000 in student debt. While many countries around the world offer free education, in North America adult students are drowning in deep pools of debt. Is it a wise investment?
Jackie Crowen, aged 32, from Portland Oregon, with $152,000 in student debt is quoted as saying "I kind of ruined my life by going to college." Let's play with some numbers...
If she attended school for 10 years, that is an average of $15,000/year in debt. If she had worked instead of attending school during those years, lets assume she could have earned an extra $15,000/year in earnings. That is $300,000 over 10 years that she is behind someone who didn't attend school and started painting full time, earning $30,000/year. How many years will it take her to catch up? If she gets a job paying 50% more because of her education, it would take 20 years! But that is assuming she doesn't end up working at Starbucks, as many highly educated people do. You sometimes end up over-qualified for entry-level professional jobs while lacking experience required for middle-tier professional positions. And that is assuming her skills and education are even still relevant after all that.
Now there are other factors to consider...
Greetings from Reykjavik! What a cool place!
We often hear about or strive for 'balance' in our lives. The idea of balance has always kind of stressed me out because I picture myself as a juggler trying to focus equally on multiple machetes in the air coming down on me and me panicking to keep it together and keep it all going while not dying a bloody death.
Balance has always felt unattainable, and thus the pursuit a little discouraging. Lately I've been more interested in the concept of focus...
Chase Jarvis, founder of Creative Live, has recently posted a series of 30 long format interviews with some of the world's leading creatives, entrepreneurs and influencers. 30 interesting interviews to get you thinking about creative new ways to clarify your vision, reach your goals and make a difference. It makes for engaging listening at work, or while stuck in a long commute. You might hear something that gives you a 'light bulb' moment, inspires you, or leads to a break through in your business...
One of the key benefits of self-employment is the ability to have more control over our work life.
What control do you have? You can respond to an opportunity you see in the market by creating something of value. You can set objectives for your business. You can set boundaries for your customers and yourself. You can make many of the day to day decisions.
So many factors conspire to restrict our freedom and impose stress on our projects and lives. This is where we must push back...
An observation from the last 12 years of self-employment:
The more you charge, the better you are treated.
How does that work? I'm not sure, but I would guess a couple things are at play...
A couple of months ago I had a cancellation. As happens from time to time. You just roll with it - because really there is nothing you can do about it, and sometimes it takes the pressure off of an over-booked schedule.
The problem is that it is very easy for a prospect to cancel a job when they haven't made a financial commitment. Unfortunately, as the contractor, you don't have the same flex going the other way. Imagine cancelling at the last minute on a customer - the bad rep you would develop, how you could totally mess up their entire project schedule and that of the other trades, etc...
05/2017 Update: After using Easy Invoice App for over a year and appreciating it's value, I have stopped using it due to a change in their pricing. It may still be a viable option for your business, but for now I have chosen to go back to using a template on my MacBook. A little more work, less utility, but cheaper and not held ransom by a 3rd party app.
The calendar can be an effective agent of change. For the past 11 years I had been generating almost all my sales documents by hand. That means hundreds and hundreds of pages worth of estimates and invoices, all painstakingly hand-written. The thing is, I had experimented with Word and Pages and dabbled with various apps, but nothing seemed to meet my needs. I felt like it was simpler and that it gave my business a craftsman feel. But maybe it was fear of change, laziness to learn a new method, or pure procrastination. Either way, the time had come to try something new.
This past January I decided that it was time to commit to switching to digital estimates and invoices. After 2 months of using this particular app to create all my estimates and invoices, I think I found an effective new tool that is an asset to my business. I'd like to share it with you in case you are looking for a simple way to manage this aspect of your business...
Part of the process of quickly moving from surviving to thriving in your painting business requires that you be selective in who you work for.
Not all customers are created equal. Learning this principle was a 'light bulb' moment for me, after years of trying to give every customer my best, every time. With a bias towards wanting to be a perfectionist, combined with a desire to treat everyone equally, it was a tough process for me to let go and recognize the need to optimize the service I provided according to the quality of the customer.
It is easier to change yourself than to try and change your prospects and clients to fit what you want to provide. Focus on what you can control. Focus on your strengths. Focus on results.
A little backstory...