Welcome to the Painter Marketing Mastermind Podcast, the show created to help painting company owners build a thriving painting business that does well over 103 million in annual revenue. I’m your host, Brandon Pierpont, founder of Painter Marketing Pros and creator of the popular PCA Educational Series to grow marketing for painters. In each episode, I’ll be sharing proven tips, strategies and processes from leading experts in the industry on how they found success in their painting business. We will be interviewing owners of the most successful painting companies in North America and learning from their experiences.

Building a bigger painting company does not automatically mean building more wealth. In this episode, Brandon Pierpont and Daniel Honan of Profitable Painter CPA break down the financial constraints that hold contractors back, from weak cash flow and underpricing to rising customer acquisition costs. They also explain how to increase profitability, prepare financially for aggressive growth, reduce taxes legally, and protect the wealth your painting business creates.

If you want to ask him questions related to anything in this podcast series, you can do so in our exclusive Painter Marketing Mastermind Podcast Forum on Facebook. Just search for “Painter Marketing Mastermind Podcast Forum” on Facebook and request to join the group, or type in the URL Facebook.com/groups/PainterMarketingMastermind. There you can ask them questions directly by tagging him with your question, so you can see how anything discussed here applies to your particular painting company.

Thanks for tuning in for this episode of the Painter Marketing Mastermind. This is a special in-person episode with a good friend and colleague of mine, Daniel Honan of Profitable Painter CPA. Daniel, what’s up, dude? Hey, what’s going on? I’m excited to be on the painter. Mastermind, what is this called? Painter marketing mastermind podcast. You should probably, should probably know the name of the podcast that you joined, but no, yeah, it’s OK. That’s OK. That’s OK. So Daniel, for, for people who don’t know you, and, and I don’t think there will be many because you’ve been on the show quite a few times, but if you could just briefly introduce yourself.

Sure, my name is Daniel Honan. I’m a CPA and former painting business owner, and over the last 10 years I’ve helped over 500 painting businesses from startup to 25 million, know their numbers and what they mean and save big in tax, and, uh, that’s what I do. I’m the numbers guy, numbers guy. I love it. So we had a virtual event. So Painter Marketing Pros host, uh, usually 3 large virtual events each year. Daniel, we invite him to, to be a keynote at each of them because of the value that he brings.

So the most recent event was Paint Profits Live 2026, and Daniel, you, you brought some major value, man. I’d like to dive into, into that. Discussion a little bit. I’ve heard you speak at a lot of events. I’ve heard you speak a lot of virtual events, and that was, I think for me, I think it was the best presentation I’ve heard you give. It, it is so sweet. Yeah, I usually don’t say nice stuff to you, but I appreciate that. But I wanted to, I wanted to film this follow-up podcast episode about it because I, I think it needs to reach more people.

OK, yeah, absolutely. Glad we’re doing this. Yeah, so what kind of give us just an overview of what you talked about on that. So it’s all about building wealth in your painting business, uh, using, using your painting business as a vehicle to build real wealth, and, uh, you know, I started running my accounting firm over 10 years ago now, and when I first started it was more about like, hey, let’s do the books and like do the tax returns and stuff so it was more traditional type accounting work.

Uh, but after working with so many painting businesses, you know, dozens and hundreds now of painting businesses, I started to see like the same pattern, the same patterns over and over again, uh, where one painting business owner was like, oh, I have a lead problem. I just need more leads and that’s gonna solve all my problems. But, right, right, yeah, never, uh, but he actually, it wasn’t a lead problem he had. He didn’t have any cash in the bank, so he had really poor cash management. And so he was, uh, you know, mismanaged like not taking a deposit, not taking progress payments, you know, low profitability, and that was his issue.

He couldn’t scale because it wasn’t because he didn’t have leads, it was because he, he wasn’t profitable. He didn’t manage his cash properly and so things like that. I sort of see same patterns over and over again. And so I kind of shifted my mindset about what what I could do to help people and and because I used to run a painting business business myself um and you know I’ve run crews uh when I was in college I did the College Works painting thing. And so I’ve kind of done, you know, running a painting business with multiple crews crews before and embarrassingly when I was running crews I had no idea what my numbers were.

I, I didn’t like to make a purchase. I just looked in the bank account to see if I had any money in the bank. Uh, I had no idea what I was gonna pay in taxes. I like all the problems that I harp on painting businesses, yeah, I, I, I made the same, same mistakes. Um, but I started seeing those mistakes again that I, the same mistakes I made, but then I saw met painting business owners that were killing it and like just scaling their business to multi-millions in, you know, a couple of years.

They were killing it on profitability. They were, you know, doing all these things right, so I got to learn from them too, which has been amazing. But you know over the years I’ve just been able to put the pieces together on what, what do you have to do as a painting business owner to build real wealth? What are the best practices to run a good business, to, to be profitable, to manage your cash. Uh, what do you need to do to, to actually save money in taxes?

And diversify your your wealth a bit because when you get to a certain level you wanna do a little bit diversification like Warren Buffett says, you know, put all your eggs in one basket and watch that basket very closely you should do that to to get to to become wealthy but then once you’re wealthy then you wanna kind of diversify some risk there so that you know you can keep stay wealthy but uh. And then also You, you and I, you just came back from Alex Hermosi’s, uh, marketing event.

Um, and so I, I’ve been there many times as well and working with. Alex and his team on different things. But the one big thing that I learned from him and his team is the theory of constraints. So this is from This guy named Gold Rat back in the 80s, I think it is, and he wrote this book. And blanking on the name of the book, but it’s all about the theory of constraints was basically the idea is your business will grow, will continue to grow until it hits some kind of constraint or bottleneck, and it will stop growing.

It will flatline until you fix that one thing that’s wrong with the business, then it’ll start growing again. So with those different components of bottleneck thinking, constraint thinking. Uh, learning from the best painting businesses, learning the, the best kind of tax and legal strategies from Mark Kohler, who’s another guy I follow really closely. He’s like a, a lawyer and a. A CPA and he works a lot with small businesses on like protecting and building wealth, uh, but with those different Um Concepts I’ve I came up with uh 3 different frameworks and I wrote about it in my book Profitable Painter which came out last year.

But it’s all about how do you take these components? How do you build your painting business for profitability, for cash flow? And then how do you build real wealth, protect that wealth? So that you can, you know, share that with your family and your loved ones. I love it, man. Yeah, the, the book’s really good. If you don’t have it, check it out. Where can they get the book you wrote? It’s called Profitable Painter, uh, Profitable Painter. You, you seemed like you had forgot the name of the book.

I can’t. I thought it, I thought you would have it on like your bed stand. Like you read it every night before you go to bed, but apparently not, um, OK. So yeah, you can get the book at on Amazon, Audible, uh, you can go to my website, which is probably the best way because you can get it for free, just cover the shipping, um. That was, that was kind of the plug I was trying to give you. It was, yeah, it was the website we got there.

So, uh, profitable painter CPA.com/book. Awesome. You guys check that out. So Danny, one of the things that I found most fascinating with your presentation is you focused a lot on beliefs, kind of these limiting beliefs, and I think that’s true for all areas of life. And I think in business it’s especially true. And I think they’re really, I think you broke it down into 2 or 803 essentially limiting beliefs and how these manifest throughout the, throughout the business life cycle. And I’d love if you could kind of hit some of those.

Yeah, so. We all have limiting beliefs. Um, I have limiting beliefs. I just identifying them sometimes it’s hard because you, you have a belief you don’t even know you have it and you’re like just think it’s a fact. Yeah, you just think it’s a thing and, and then you realize. After it’s broken that you’re like, oh. I believed that for years and that was probably holding me back. But one of the things that I hear a lot is when I tell a painting business owner what I do, like I meet a lot of folks at conferences and I’ll say like, yeah, I’m a CPA.

I work only with painting businesses. We help them build wealth and blah blah blah. And their kind of initial reaction is, oh yeah, I already have a bookkeeper and a CPA. I got to have that handled, which might be true, but most of the time it’s not really handled. What’s happening is that their bookkeeper is recording what happened in the past. So they’re doing the bookkeeping, which is helpful and then. Their tax or their CPA, their tax preparer is filing the forms. So that they don’t go to jail, right, because you got the IRS, you literally minimal, right, which is great.

I am a huge advocate of not going to jail. So yeah, so this is good is compliance work is what we call it in the biz, uh, compliance work. They’re doing the books, they’re doing the tax return, that’s great, but there’s a lot more that can happen to really help you get to the next level. So, um. What what we do, for example, and there’s obviously other firms that do this stuff, but Obviously you should do that that compliance work bookkeeping, tax preparation, absolutely. On top of that, you probably should take a look at your numbers and analyze them for what is holding you back in your business like what is holding you back from hitting your goals.

So this goes back in the theory of constraints. So whenever we look at uh financial statements, we’re looking for a policy or behavior constraint as an example, policy or behavior constraint. This would be like. Is the owner doing something to prevent the business from having enough cash, or do they have bad cash flow policies in place or bad pricing policies or bad compensation policies that are limiting the profitability and and and the cash flow? That’s really limiting the business’ ability to actually grow and so that we’ll take a look at the financial statements and we’ll see an easy way to to do this would be to look at your how much cash you have in your business bank account.

We, after looking at hundreds of, I’ve literally looked at tens of thousands of financial statements, financial statements for painting businesses, and the folks that have over 2 months of overhead costs as cash in the bank. They’re in a good place with cash. So basically, what does that mean? You look at your overhead costs for a single month, so this is marketing spend, insurance. Accounting All those anything not related specific to a job, you add those up. Multiply it by 2. You should have 2 months of overhead costs as cash in the bank at any point in time.

And the thinking is if you go through a slow period like maybe the winter when most painting businesses have a slow period, slow down over the winter, yeah, apparently. Uh, no secret there, right? Same thing that happens every year, slows down December, January, February. So, uh, wouldn’t it be nice if you had enough cash to cover overhead? No revenue comes in, but you cover overhead, so you keep the doors open. So that’s kind of the thinking there. So if you don’t have two months of overhead costs as cash in the bank, that’s an indicator that you probably are mismanaging cash in some way.

Either you’re taking it all out of the business to You know, for the personal side, or maybe you are just not profitable. Maybe you don’t take a deposit, you don’t get paid fast, you don’t slow down payments outgoing so you can, you’re not getting paid quickly and you’re not slowing down payments to others because that’s kind of the game with cash flow. So there’s many other, there’s many things you could be doing wrong, um, that is limiting your cash balance and thus limiting your ability to grow because in order to grow you need cash.

Right, you need cash to put into marketing. Because especially if you’re doing outbound type marketing like paid ads working with, you know, painter marketing pros, for example, you’ll need to spend money on, on ads if or you, you might need more, more of a team, more workers, right, and it costs money to recruit, hire, train, and pay people so. On either side of the coin, you need money to grow. So, Daniel, I have a, a really important question for you, following up on all that was when you said the biz, was that from the movie The Breakup?

Maybe I haven’t seen it. Have you not seen it? I haven’t seen it. It was, uh, it was with Jennifer Aniston and it sounds like a movie you’d watch. Yeah, Vince Vaughn. Vince Vaughn’s why I watched it. I do like Vince Vaughn. His comedies, he’s gotten into some other stuff now, but Wedding Crashers is one of my, oh yeah, I gotta watch that again. Yeah, Owen Wilson, really good, but the Jennifer Aniston went on a date with an accountant. And he was super creepy. Not that you are.

This, this, this accountant was is different. And he, he was talking about accounting and he’s like, that period is what we in the biz like to call party season. It was something like that. So when you said the biz, I was like, I think he just dropped, uh, the breakup quote, but no, you just said it the same way. That’s good to know. But I do, so I, I want to make a point on this. I think, so what you, what you explained is called commoditization, right?

It’s, OK, you’re a CPA, I have a CPA. Therefore, I don’t need to really hear much more about what you do because a CPA is a CPA and we’ve, we’ve seen that kind of limiting mindset with people who have never maybe worked with an agency that specialize in painters, never worked with painter marketing bros, um, they’ll think marketing is marketing, SEO is SEO, right? A company that runs Facebook ads is a company that runs Facebook ads. They’re wildly different. Capacities, wildly different um abilities of companies to perform, right?

And, and so what you talked about with, with the, with the CPA and the bookkeeping role is there’s the bare minimum function is essentially record what happened. And then paying enough money so you don’t go to jail. It’s basically it. And, and what you’re talking about is, hey, we’ve worked with over 500 painting companies. There’s pattern recognition in working with that many painting companies, and you can essentially look at the books and, and see a story. Because finances, the, the P&L, the balance sheet, that they’re gonna tell you a story about what’s going on with that painting company.

And you know, based on over 500 painting companies, you know what the story should be. And now you’re seeing what it is, and usually there’s some kind of a delta there, right? And, and the vast majority of local CPAs are just, well, I’ve been using him forever. They’re usually not gonna be able to, to quickly pinpoint what’s going on there and what you need to do. And I think, and I just want to hammer this because I also want to make a point to everyone listening. I don’t, I take my reputation really seriously.

I actually like Daniel a lot. That’s why I make fun of him so incredibly much, and I respect him a lot as a business owner and profitable painter CPA. I wouldn’t, I wouldn’t put my, my brand next to him if I didn’t believe in him. I think if you’re serious about scaling your painting company, at least talk with this guy because There’s not much more effective marketing and knowing your numbers. I mean if you do those two things right you’re probably off to a really solid start in your scaling journey but I uh with with Daniel, the thing that they do differently is they are strategists with you so I don’t know if you wanna add to that, but I just wanna make sure people are kind of picking up what you’re putting down because it’s significant.

Yeah, I mean, we’re, we’re there to do, we’re, we’re there to help you know your numbers and what they mean and save big in tax. Those are kind of our two core promises, but. For example, we just this past week I was working with. A painting business owner, he’s doing about 4 million this year in revenue. So he’s really solid margins. I want to say, yeah, his margin, his net margin was about 16, 17% on 4 million, not too bad. Then he’s on top of that, making an officer’s salary since he’s taxed as an S corp.

And he, his next year he wants to do 13 million. And um The the thing that What, what I could provide to him, you know. I think any accountant looking at his financials would be like, you’re doing amazing, just keep doing what you’re doing, which I agree with that, like he’s definitely killing it. But the, the, the level of insight that he was missing at this point was that I’ve worked with businesses bigger than him. In the same industry, and I know that his gross profit, which is at 55%, which is great, most painting businesses would kill to have a 55% gross profit margin.

But I know, I know that there’s painting businesses out there. Uh, one of your friends, Jason Phillips, um, I believe he has a 65% gross profit margin, but folks like him, a 67%. OK, so yeah, it’s crazy. Uh, so 67% gross profit margin, and there are other painting businesses out there. That are hitting, you know, not just 55%, but 60, 65, 67 apparently. Um. And so your margin can be a lot higher. And he was kind of under the limiting belief that he couldn’t go higher than 1003%. And what I was pointing out to him is that You know, you wanna more than double next year and that’s gonna cost a lot of customer acquisition costs.

Ben, your, your customer acquisition costs are gonna go up a lot, not only as in dollar amount but also probably as a percentage of your revenue. And he had a, he has a good, um, gross profit to customer acquisition cost ratio is like 4, 4.5 to 1 I think or 4:1. I’m sorry, it was 3.3 to 1. Now I remember 3.3 to 1. So it was above what we want as a minimum of 333 to 1 gross profit compared to customer acquisition, which is basically marketing and sales. So he was kind of just above the minimum that we recommend and but he wanted to over double the next year and I was like, so Daniel, let me, let me just inject on what CAC is real fast because you’re too smart.

It’s hard for me to keep up. Uh, cost customer acquisition costs is just everything you pay to acquire customers. So the marketing, if you’re spending ad spend, if you’re paying a marketing agency, if you’re paying. to a salesperson and I would even argue the gas and everything that you’re paying for your estimators to go out and basically gross profits usually uh indicator of your biggest cost, right? Your biggest cost is to produce the work and then your second biggest cost is your marketing and sales spend, your cus your cost to acquire the customer.

So looking at the ratio of GP to CAC is basically if you put $1 in a customer acquisition. How many dollars out do you get in the form of gross profit? And so we say a minimum is $3 to 1. You put $1 in a customer acquisition for marketing and sales, you should get $3 back in the form of gross profit. And gross profit is just after you take out your labor, after you take out materials, if I would say if you’re paying a project manager or any kind of commission to run the project, whatever it costs you to run that project, remove it.

They, they pay you $100,000 it costs you $400,4013 in materials and labor, then your gross profit is $600,000. Right, so he was at a 3.3 to 1, so above the minimum but still not super high, and he’s talking about doub over doubling in the next year. So just from having seen this over and over again, I know that if a painting business wants to. Grow any any kind of meaningful way like I would say 50% growth or 30% growth or more, your customer acquisition costs are gonna go up as a dollar amount obviously but also as a percentage of revenue meaning that when you look at your profit and loss and you can see the kind of the the percentage of uh revenue you add that little column on the the right.

You know it might be 7% now, but if you try to double in the next year, that’s going to go up to 14, 15%. And the reason why is as you reach out to colder and colder audiences. The people who haven’t heard of you. It’s gonna be more and more expensive, which I’m sure you see that, um, when you’re scaling painting businesses, right? Yeah, I think that’s a really good point because I, I think painting companies will come in and the, the best example is a painting company that’s grown purely on word of mouth.

They’ve never done any paid ads. They’ve never hired an agency, don’t, don’t really know how to do any of that stuff. And so their marketing investment is essentially zero. Maybe they have a commission salesperson, probably not. Those companies usually still the owner doing all that stuff, and so they effectively think that they have a zero cost to acquire a customer, which of course isn’t accurate because you need to be looking at what you would pay a salesperson. So they, they come in and you go from basically a 103, 0% cost to acquire customer to now you’re doing marketing.

Well, automatically you’re higher, right, because you’re doing marketing and so I think. You have these repeat, you have this referral, you have this customer base even not effectively generating repeat referrals because most painting companies it’s very passive, but even not effectively generating those, you’re going to get those, you’re gonna, you’re gonna get those kinds of projects which essentially are free in terms of acquiring the customer, right then you. You want to scale, well, now you want to start running paid ads, you’re going to people who don’t necessarily know you, right?

You want to start investing into website and SEO into organic content like that. It’s going to take a little while for that to gain traction. And so your, your spend starts to increase a little bit. And when you have a goal as aggressive as, as this goal, obviously going from 4 million to 10 million in one year is super aggressive. When you have a goal that’s aggressive, you have to aggressively market. And go to a broader audience and a colder audience is one that doesn’t know you is not familiar with your brand, meaning you’re gonna get a lower percentage of them to potentially move forward and so you have to invest more money.

That being said, your cost of marketing as a percentage will go up, but it won’t stay up. It shouldn’t. When you’re scaling, it goes up as you scale aggressively. Then when you kind of settle there, you have repeat, you have referral, you’re starting to own that client list, and, and your cost of marketing can go down a little bit. So if you’re, if you’re looking at a company at 1 million, you want to go to 3 million or 4 million, you’re at 4 million, you want to go to 10 million. You have to be prepared to eat it a little bit on the margin.

You might go from 4 to 403 and you might not even make any more money that year, but you have to know the other numbers that you’re running through to also make sure you don’t grow yourself out of business. Yeah, and so explaining that to this painting business owner like, hey, Your your marketing spend, I think it was at 8%. His customer acquisition, I think was at about 16, 17% or whatever. This is going to go up to 280, maybe, maybe even as high as 21% if we’re trying to over double a lot.

So you’re going to have to. So what we wanna do is create additional room for that extra spend, um, and the best way to do that is to increase your gross profit margin. So if, if instead of hitting a 2100% gross profit margin, if we can get it up to 233% now we have more room to not sacrifice the profits we might have to sacrifice a little bit of profit but not so much that we’re just unprofitable, so. So kind of pointing that out like, hey, you know, your customer acquisition cost is probably gonna skyrocket.

Let’s preemptively start working up the gross profit and By probably doing some price increases because um that was I mean with increasing gross profit it’s either you increase your prices or you pay your team less or make it more efficient um. And so that second lever, he’s already has a pretty efficient shop. Uh, so really the only lever he had is really increasing prices and then it’s a question, that’s another belief that folks have is I can’t raise my prices because you know they’re already the highest in the market.

They’re already one of the highest. Yeah, it’s amazing. Um, I hear that like literally every day is that I’m already, I can’t raise my prices. I’m already the most expensive. And then God told him he cannot raise his prices, right? Uh, and it’s funny how, you know, in, in this painting business owner’s case, he’s probably He’s probably, um, I’m not saying that anybody’s lying, they’re probably somewhat true, but he’s actually probably the most expensive because he actually does have the highest gross profit uh in At least his area, um, but you’ll, you’ll even hear that from folks that are hitting a gross profit of 2401-210%, they’ll say that same thing that the, the highest price, um.

And the the the truth is, that’s great if you’re the highest priced. That’s that that’s nothing to back down from, um, and you probably have more room to increase your prices. It just comes down to your sales process and your offer. If you can improve one of those two things or both of those things, you could probably increase prices even more, which I know, um, I know Jason Phillips, who we just talked about was, um. With Phillips Home Improvement out of Dallas. Yeah, so he has a $3503 million.

Painting business I guess they do roofing a little bit of roofing too, but. I know that they, they really focus on the sales process and they have a sales boot camp for other painting businesses, which is a really awesome, uh, boot camp, by the way. They’re really focused on their sales process. They’re always improving it. And we mentioned he has a 2350% close rate. He actually uses his, I’m sorry, 21% gross profit. And he actually uses his close rate as a signal for when to increase prices. So whenever his close rate goes above like So I gotta go above 21.

Yeah, I think it might be 45. I think he keeps it around 35% close, close, close rate. If it goes above 35%, then he’ll start creeping prices up a little bit. So he uses his, uh, close rate as a signal. But yeah, the two levers to increase pricing, your sales process, and your offer, um, and so if you, if you improve those, then you can improve pricing without impacting your close rate. Yeah, Jason has a cool story where he, so he has his own serum software that they’ve built and it provides pricing and, and proposals through it and it’s a story where he reconfigured the calculation a little bit without telling his sales team.

And so they didn’t know that the prices had just increased 10% and they, they went out and, and didn’t miss a beat. They, the, the close rate, I actually think the close rate increased a little bit afterwards, but I, he, he’s under the impression, I, I also believe him. That if he had notified them, the results probably would have been different. The head trash in there, you know, the confidence isn’t there. They don’t think that they can sell it. So there’s so much head trash and you mentioned Alex Ramosi.

We’re, we’re both big Hermosi guys, but his team said they don’t care what the industry average is. They don’t even want to hear or know. It’s not a benchmark for them because the industry average is inherently average and average is bad. And so the, I, I think when painting companies, if they think, well, I should be at a 50% gross profit or, you know, if I’m at 50% is really hard, I mean they could be at maybe in their market they could be at 13%, right? The, the pricing is the single biggest lever that.

You have, and this isn’t a sales course where we’d be sitting here probably for 8 hours talking about that, but the fundamental concept is remove the limiter in your head. You’re an entrepreneur, you’re a business owner. The reason that I’m a business owner is because I don’t wanna have limits. I wanna expand. I wanna be able to help as many people as humanly possible. I wanna be able to help my team, and I, I don’t want somebody telling me what I can and cannot do. But I think as business owners we so often are telling ourselves what we can’t do.

Right, you’re the boss. You can do whatever you want. And so as long as you’re serving at a high level, as long as your operations are backing up your pricing, as long as you have customers that are leaving that are happy, that are leaving you five-star reviews that are giving you referrals, then your pricing is not too high. Yeah, and, and it’s also not a. Once you raise your prices, it’s not like you can never reduce your prices ever again. There’s no retreat. I mean, I, I get what you’re saying there, but like when I’m talking to folks like you can just test this out, right?

Like just raise your prices by 2%, see what happens, uh, you know, it’s not a one way really test it. It won’t be, well, we did it for a week and no like commit, do it for a quarter, right. And it’s not a one-way decision uh if, if you’re really unprofitable or maybe you’re very low on cash taking a deposit, that’s another big one. Can’t take a deposit, right? Like you can’t take a deposit. So that’s something that’s another one that’s just like we see it just helps people so much painting businesses so much.

If you just start taking a deposit, if you’re taking no deposit, take some deposit. If you’re taking some deposit, take more, you know, obey the laws, right? Of course obey the laws in your state. Some states are strict about what you can take, but or do a progress payment instead. But basically the whole game with cash flow get paid faster and then slow down payments to others, but we You know, we have a lot of folks are really resistant to, to, to taking more money down because they feel it’s gonna impact their close rate.

It’s kind of the same thing with, with pricing, but you know, if you’re really, if you only have like $1000 in the bank and this is you’re borderline not gonna make payroll, probably should just increase your deposit and you can maybe lower it later on, but at least do it temporarily so you can get some cash in the bank so you don’t go out of business. I think US Bank had a, a stat. From a couple of years ago where of the businesses that went out of business, 80% of them went out of business because they ran out of cash.

So there’s a reason why they say cash is king. Number one rule of business is don’t go out of business. So, so Phillips Home Improvements, I’m quite confident they are consistently the highest priced company in their market. Dallas is highly competitive market, tons and tons and tons and tons of painting companies there. And they have a really dialed in sales process. They, they teach us, you mentioned the sales boot camps. If you haven’t checked it out, check them out. Contractor Freedom sales boot camps, super dialed in process.

And when you go in with, with a super dialed in sales process, you have a differentiator for, for why you are better than the competitors, which if you don’t, there’s your problem. But you have a differentiator for why they should choose you over another painting company, and then you present a price that is in line with the other painting companies, you create what’s called cognitive dissonance, which just means you’re confusing them. If you’re better, then why are you the same price, right? So if you actually refine your sales process, if you actually show, they call it the Phillips difference with Jason’s company, but if you actually say, hey, we do this and this and this and this and this, and we’re gonna take care of you on this one, we have this kind of guarantee warranty. Right?

If you have all these things and then you’re priced the same as Chuck in his pickup truck, then they’re actually trust you less, right? But if you price it at a premium, well, yeah, that makes sense. Your product’s clearly different. This is apples to oranges. So I think what, I think one of the mistakes people make is they, they go in with no differentiator at all and they wonder why they can’t charge a higher price or they actually have a differentiator. And then for some reason still don’t charge a higher price.

Yeah, I, I catch myself doing this whenever I’m looking like to buy some piece of technology or something like a new computer or whatever. I don’t know how many gigs of whatever I need to have, you know, I’m just like, OK, I’ll just choose the higher price one like that would be better. It’s like I don’t even know. I’m just like, yeah, I don’t know. So it’s, it’s at least I do it. I mean it depends on your buyer too. Right, because, yeah, the, if I mean there are not a lot of painting companies that we work with that painter marketing pros and we say, hey, who’s your ideal customer profile and they’re like poor people.

We really, we try to sell all of our painting projects to poor people, right? It’s usually middle upper class people is who they’re targeting. No, of course they don’t say that. No. So, so they, they’re saying, they’re always saying they’re, you know, upper end of the market, wealthy, middle, middle class and wealthy, and, you know, above. Well, when you’re, when you’re serving a higher end, more affluent market, don’t price it like you’re serving everyone. Right? Price it like the market that you want to serve, and the market that you want to serve is people who value their time, who, who don’t want to have to redo the work, who want peace of mind.

A third of the 1 trillion, uh, home improvement market every single year, a third of that a third of that every year is redoing projects that other contractors screwed up. There’s something you can put in your marketing and sales collateral right there. So you could charge, if you can guarantee 100% that, that they’re not gonna be part of that third, you can charge 33% more right there. Yeah. Yeah, and the next thing that once you’re and this is going back to the painting business owner I was talking about. He wants to double in the next year.

We did some tax planning for him. As well, and he’s making a lot of money like. Tons of money. He actually has so much cash in his bank. It’s like the opposite problem where he exceeds the FDIC insurance amount. I’m like, dude, you need to put your money in like different places so it’s not. At risk and insured, but uh. He has all this cash and now he’s facing a pretty big tax bill so we’re looking at different tax strategies. What what we can do to actually lower that tax bill as close to zero as legally possible, um, so we’re doing some advanced retirement.

Tax strategies with defined benefit plans like a cash balance plan, which, you know, 401ks, simple IRAs, those are kind of the starter, starter things you should do. He’s kind of Starting to graduate into like defined benefit plans and and cash balance plans that can really skyrocket how much you can put away for retirement to build your wealth but also can save you a ton in taxes so we’re doing some stuff from on that front but also on the uh some folks don’t think of this a lot but like the estate planning front which is like what’s gonna happen after you pass away he’s not super old but he does have um he has a couple of kids he has a wife.

And right now all of his assets are in his personal name, his company’s in his name, his home’s in his name. All this stuff is in his personal name. And if he’s really gonna, you know, and he, and he, he accomplishes what he, he sets out, so he probably will hit 10 million at least in the next couple of years. As he becomes more and more successful, he’s going to become a bigger and bigger target. So unfortunately we live in a pretty litigious society and so as he becomes more and more successful he’s gonna become a bigger and bigger target and people are gonna look to see if they can get a piece of that basically and so we we started to talk to him about setting up a revocable living trust.

You know, putting your assets in that revocable living trust, which a trust is just a piece of paper that says Were these, you know, the um You have your title for your home, right? Or even your guns, any title property, right? You can put the owner as a trust. So the trust literally owns that piece of property. And then on the trust side, you have instructions on what should happen with that asset if you pass away. And so the revocable living trust, it’s not really a tax thing, it’s really about managing the assets after you pass away so that you can avoid probate court, which probate court is, if you’re not familiar, super annoying process where you have to go through a judge and the judge looks at the will and says, OK, these assets go here and here and here, um, whereas, uh, if you have a trust set up, it avoids all that nonsense with the probate court and it goes right to your, your descendants.

But not only, and that’s what it’s traditionally used for is the revocable living trust is a great estate planning tool, but it’s also really good for privacy, which is good for him because he’s young, we don’t expect him to die, fingers crossed, uh, anytime soon he’s in his 40s, but what it can provide is a layer of privacy so. As we said, litigious society, people are gonna be targeting him as he becomes more and more wealthy, but if his all his assets are owned in a. Nondescript trust like ABC Trust, like it has no connotation to him, like he didn’t name it after himself or his business, you know, it’s, it’s just some innocuous name, ABC Trust.

And so if somebody does an asset search on him, like looks at who owns this house, who owns these um these businesses, all it will say is ABC Trust and like, OK. Who, who controls that it’s harder to find out. So adds a layer of privacy, so you’re harder to sue basically. And so starting to think about things like that where you once you heard a certain level of success. You got to start thinking about planning for taxes. Don’t letting taxes just happen to you. And think about your future, your, your loved ones, are they taken care of if you pass away, uh, and also providing um.

You know, getting a layer of privacy. So if you, if you have a CPA right now, if you’re on a painting company, you have a CPA and they’re not doing all of this, then it’s probably worth at least having a conversation with Daniel. Daniel, this, this has been incredibly insightful. Is there anything else before we wrap up this episode that you wanna cover? No, I mean if you wanna talk about your financial situation, I’d love to have a conversation. You go to profitablepainter CPA.com. Just schedule a consult and we’ll, we’ll see what makes sense for your situation, whether you’re a startup, you’re Between 350 and 1 million and 1 million above, we, we have, uh, different packages for, for, for folks in different stages of your journey.

And that’s one of the things too is they, they will grow with you. So don’t think you’re too small to, to, to talk with Daniel. This team, worst-case scenario, you’re gonna walk away with information that you didn’t have before. So, Daniel, I appreciate you, man. Thanks for joining. We, we got a couple more podcast episodes coming up. They won’t be in person, unfortunately, maybe we’ll come back. I don’t know, it would be, this is, this is pretty nice. But yeah, we got more stuff coming your way and appreciate you, bro.

Thanks for joining, man. Glad to be here, man.

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Hey there, painting company owners. If you enjoyed today’s episode, make sure you go ahead and hit that subscribe button. Give us your feedback. Let us know how we did. And also if you’re interested in taking your painting business to the next level, make sure you visit the Painter Marketing Pros website at PainterMarketingPros.com to learn more about our services. You can also reach out to me directly by emailing me at Brandon@PainterMarketingPros.com and I can give you personalized advice on growing your painting business. Until next time, keep growing.