You own your own enterprise. Are you wealthy? No-Why not, why not? You’ve got a lot of work, your reputation is spotless, you love your customers. Why are you not wealthy, then? Subcontractors have been asking themselves the same question for years. WHY WE WANT RICH? You should at least be well off, to tell the truth. If you don’t, then why not? Visit Frederick Painting & Supply, Inc.-Painting Contractors.
Chapter 1-Some basics
In 1985, shortly after seeing Tom Hopkins give a full day seminar on professional selling, I called on a large commercial painting contractor. Mr. Hopkins taught me to stay confident. And to value the time given to my customers. Therefore, I filled out all the paperwork in advance before making my sales call. It took approximately 20 minutes. I gave my introduction and asked my closing question. After my client said yes, I told him I had taken the liberty of filling out all the paperwork ahead of time to save him time. He was so impressed with my preparation and confidence that on the spot he offered me a job as Project Manager / Sales Representative to work for him. I didn’t take the job straight away, but I joined his company as a PM after a year of handling his account, and seeing what an impressive company he had. I knew the one I wanted to work for was this.
We have worked for the best GC’s of all. Our prices were among the town’s highest. Yet none of that counted. Our quality and service have provided us with all the work that we could do. With big margins to profit. Our projects were estimated based on simple arithmetics. When we can get our ideal profit margin we’ve taken the job. If not, then we’ve gone. We had production rates for painting every possible substratum, knew our direct costs, indirect costs, material prices, and mitigating factors that could accelerate or slow production. It was scientific straight forward. And outstandingly precise. And I have been good at implementing it. By 1992, in one year I had gained $148,000.00. During those eight years I learnt enough and saved enough to start my own business during 1994.
I made it a point, over the years, to get to know my competition. They are genuinely excellent at drawing, by and wide. Not so good at running an affair. They are able to do a lot of production but not make a lot of income. Here’s a prime example. One evening my wife and I met at a dinner with a semi-competitor. He volunteered the way he had done business the previous year. It was the same amount that we did. So I asked him how many painters he ‘d been working for. It has performed twice as many for us! That’s Okay. We did the same amount of business but the cost of his labor was double ours. So, why do you think they have made more money? As I got to know him better, he once shared with me that he had been called by his accountant to inform him that he had “lost his a * *” He wondered how this could be; they ‘d been busy over the year, buried in work. The CPA replied this could be true but clearly they had not paid sufficiently. He told him his rates had to go up. This was it. “Raising prices.” Unfortunately he refused stubbornly. After all, they would not be having any jobs if they increased their rates. They were already slightly above their main competitor (but I have to add some way below us). They have thought they are as far as they can go. Then guess what they have done? They switched accountants! They gunned the messenger. It wasn’t working.
A few years passed without improvement and they hired a consultant with a high dollar and yet another accountant. It took a while but they learned to read the financial statements and began to cost their expenses to work. They also began issuing monthly letters, rather than annual ones. And every month they saw how much they made, but they lost more frequently. They would kill for a few months but then lose their shirts the next. Sales by two million but no profit. What a hectare! Once, their rates were ordered to go up. They listened this time and were doing better for a couple of months. But then they went back to their old ways as competition caught up. They were stuck in doing things in their own way. They also used “square foot pricing.” And that’s what they actually did in. They ‘d gone out of business after 18 years.