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Guest Interview: John MacFarland of MacFarland Painting – Round 2

John MacFarland, Founder and Owner of MacFarland Painting, joins the Painter Marketing Mastermind Podcast for a second time to take a deeper dive into his unique compensation model. A very big advocate for open book reporting and transparency, John explains how other painting company owners can transition their employee compensation models to create a win-win. He also discusses how to keep a “small company” feel with customers while running a business that is currently generating approximately $8 million in annual revenue.

Video of Interview

Topics Discussed:

  • An employee compensation model that creates a win-win for the company and employees
  • How to transition existing employees to this new payment system
  • What customers value and why MacFarland Painting enjoys high referral rates
  • The importance of honesty, and how John uses it to create trust and loyalty with both employees and customers
Audio Transcript

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Welcome to the Painter Marketing Mastermind Podcast. A show created to help painting company owners build a thriving painting business that does well over one million and annual revenue. I'm your host, Brandon Pierpont, founder of Painter Marketing Pros and creator of the popular pc, a educational series, learn do 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 on this episode of the Painter Marketing Mastermind podcast. We host repeat guest john Mcfarland john is the founder and owner of Mcfarland painting, a residential and commercial painting company based in Metropolitan Detroit that does approximately $8 million in annual revenue. In this episode, john takes a deeper dive into his unique compensation model. A very big advocate of open book reporting and transparency, john explains how other painting company owners can transition their employee compensation models to create a win win. He also discusses how to keep a small company feel with customers while running a business that currently employs 50 people If you want to learn more about the topics we discussed in this podcast and how you can use them to grow your painting business, visit painter marketing pros dot com forward slash podcast for free training as well as the ability to schedule a personalized strategy session for your painting company. Again that you are L is painter marketing pros dot com forward slash podcast, john thank you for coming back on the painter marketing mastermind podcast man, my pleasure, thanks for having me back. Yeah, so we had a great first episode. I know a couple of people have actually reached out to you to inquire about some of the things that you spoke about. So we thought might be a good idea to have you come on and take a actually a deeper dive for everybody. Sure, my pleasure. So let's let's dive into kind of how well let's let's talk a little bit about Mcfarland painting um your background, what you guys do etcetera, kind of get the lay of the land so people don't have to remember the first episode and then we'll dive in. Sure, well our company is based out of metro Detroit, We are a staff of 50 and growing and we do mainly residential repaint stuff. The typical interior exterior, we have a division that does cabinets exclusively right now. We have eight people just doing cabinets every day. Um kitchen cabinet re finishing, so that's kind of a subdivision of Mcfarland painting. Um We also have another crew of guys that do staircase, handrail, re finishing, bouncer replacements, so that's a little different than than some of the other guys in our industry that just do the repaint stuff but most of our work is is residential repaint. Our guys, our staff are full time, your own employees. We don't subcontracts or a little different in that regard than some larger companies. There are, there are people and, and that's what we do. So you guys have 50 full time, year round employees. Yeah, we do not, we've hired 10 since january 1st, um, and we're very big on if you're good enough to be with us in the summer, we're going to carry you through the winter. So we've never laid anyone off off season. I think that, you know, that onus is on me as an owner and our marketing team to, you know, keep everyone that's with us busy. So that, that's how we do that. And what was your revenue in 21? About 5, 5 million, five million. And what do you think you're gonna end up finishing 22 with, we're going to be between seven and eight right now. We're running about 55 to 60% above last year and we have been since the year started. So, um, we have enough jobs booked out farther, you know, into the summer that we can have a pretty solid projection that that's going to continue. So you man, that's impressive. So what, Well, I don't want to dive into the employee think too quickly because I know that that's where we're headed. But I do, I am wondering being in metro Detroit, how do you not lay anyone off over the winter. It's not always easy. I mean, our, our lead time on jobs shrinks. So right now, I mean we're booking exteriors for us. We have a limited season, You know, we're wrapping up in october every year is a little different. Sometimes that's early, Sometimes that's late october, but that's generally when we're throwing in the towel. Um, you know, so we go from booking 68 weeks out in the summer to maybe we only booked out a week in january some years we're scrambling a little bit to fill time and keep everyone busy. But um, you know, that focus ships, we have managers that maybe they're worried about, you know, monitoring the progress of cruise all summer and maybe their job in december changes to making sure everyone's busy. You know, we're touching things with our sales team saying, hey, I need a handful of small jobs or I need one real big one. I'm looking for a spot to put. So, and so who maybe has a particular skill set? Maybe they're good with stain work and you know, we kind of comb through those and we try to do it in advance as much as possible. You know, trying to get a short list of things that may fit if we have a problem or hiccup in the schedule and we've been pretty successful the last couple of years, demand has been so high. It's not been very stressful. But historically, I mean there's times that were filling jobs and we're starting something that we estimated on a monday. We're painting it thursday, you know, in january, but the last couple of years hasn't quite been that stressful. Do you ever offer people who want to get work done in the summer discounts to wait? Yeah, we do a little bit. Um, you know, we kind of touched on this last time. I don't know if it's just because I'm cheap or stubborn or both. Um, but I really believe that if you just are honest with folks and say, hey, you know, we appreciate your business. Um, it means a lot more to me in december than it does here in july or august, you know, can we push you back a couple of months? This is just repainting something. Um, people just kind of appreciate that honesty and they'll say, yeah, on a lot of it I can, but you know, we want to do this a couple of bedrooms now, we're redecorating. So let's split the project. Uh, and with a little bit of that conversation, we can get ahead of it without having to just provide a discount. You know, we try to keep our pricing consistent so that we're not alienating customers that didn't get a discount or, you know, relate to the party and, and our prices based on square footage take off and we don't like messing with that a lot. That makes sense. Yeah, like that. So you find that a lot of times you end up sort of splitting a project, they'll, they'll tell you what their priority is, you know, get that done and then what things they might be willing to wait on. Absolutely cause a lot of our stuff is interior next year combos or it's got cabinets to it or it's got handrail component to it. Um and honestly for a lot of clients that's stressful, you know, to get that much of their home ready for us, um you know, and that's what we tell them. Do you want us there for two weeks or if we did this and kind of one week, took a couple of months off and came back to catch your breath. You know, financially you catch your breath, you know, just getting ready for us to show up and turn your world upside down a little bit. Um and and that doesn't take a lot of convincing to have people say, you know what? We're excited, but that's fine. We'll wait. Yeah, now this handrail thing that you guys do is this, I mean is this a pretty key differentiator for you guys, for the sales team? It is because in our market, um you know, we got a lot of homes built in the early two thousand's that have, you know, oak handrails, white colonial masters and okay, honey oak tops and people want to do wrought iron ballast ear's, they want to do some color changes their matching the floor. So they're changing stain color sometimes and there's just not a great market of other carpenters and stair builders and Flory finishers that do that. Um so people want it done and see the pictures and love it, but they have no idea where to go to do that. And honestly it's pretty straightforward work, It's pretty basic carpentry that we do, we get into some, you know, post swaps and some changing out and some stuff that's a little bit higher level, but most of our stuff is just replacing balas tres priming and painting of the handrail and putting it back together. And that's incredibly popular and it definitely has been a differential for us because um if you start searching on google, you don't find a very good fit for those services. You find stuff that's closer, it's scary finishing Flory finishing, but those guys don't touch anything that's vertical. Yeah, so I'm I'm actually looking at your website right now, Mcfarland painting dot com. Mcfarland, right, john MacFarland? Yeah, So that incorrect last time. So Mcfarland painting dot com. And then I see you have a whole page dedicated to staircase renovations. Is that a is that a page that you guys find gets found a lot online and it's a big lead magnet for you guys. Yeah, it is and that uh I think it's important that it just doesn't get thrown in with, you know, this, this other stuff that we do, it's different, I mean we have different guys that do this, we have some guys that might be able to moonlight and cross over, but this is a little bit of a specialized group. I mean they carry different tools and their trucks and vans. Um they have different skill sets and so I think it's important to direct people if they're going to do any google adwords or stuff from the facebook and kind of cross marketing have them land on that so that it looks like it what it really is, which is not like this afterthought, it's something that we do an awful lot of and we have a crew that does that five days a week. Um So it's a big deal for us and when you guys do that, is that typically a lead into a bigger job, are they typically doing a full interior repaint or or not? It goes both ways. You know, sometimes it starts with the handrail, a lot of the times it starts with the interior painting and ends up at the handrail. Um you know, the handrail is probably the second component, it's that add on. But I mean there it's a really nice, you know, multiple $1000 add on in most cases, it's not like adding a couple of doors or a bathroom for 200 bucks, it's, it's substantial. Um and our sales guys, when they go to a job, they have photo books that they give to homeowners to kind of occupy that we're trying to take measurements and and do a take off. I mean it's great to have homeowners there, but they can be a distraction a little bit. Um so we'll give them a photo book that has cabinets and we'll give them one that has handrails will give them one that's into your painting and it keeps them busy so we can get accurate intel, you know, and then we go back and people say, well what is this handrail stuff? And we found that's been wildly successful with that cross sell, you know, give them something to look at either on a tablet or we use actually use paper medium because our guys are putting their information on a tablet and it makes their estimates cleaner, they're missing. You know, less stuff because they're not getting distracted man, that's genius. I have not heard anyone ever say that on one of these podcasts, you know, one of my objectives on the podcast is to try to pick things out that that maybe would otherwise go unnoticed. So you said a couple of things I think are really key. You give people something to look at. It's almost like occupy. I mean it could be a little condescending, but it's almost like occupying your child at a restaurant or something. Give them a coloring book. So you can actually focus on picking out what you want to order 100%. I mean how nice is that time after dinner, You know, if the kids are coloring and you can talk to your wife or husband and and get five minutes, you know, the family together, not in electronic devices all the time necessarily, but with the estimates like that's the way we get good information and you know, homeowners started asking questions, which is great. But like if you get a guy off his flow, they kind of have the same process and they miss stuff. I mean, don't forget that you said you didn't want ceilings in these rooms or whatever. And that's really, really nice and allows us to show those things that maybe differentiate us. We do the same thing honestly with our presentation folder and like insurance certificates, you know, give him that stuff to go through. Um, it allows you to kind of do a little more detailed recon, I think when they're getting the proposal together. Yeah. Yeah. I mean when you're talking with the customer, you really want your attention on the customer. You know, it's all about the customer experience. So if you're trying to figure out, you know, you're trying to run an effective estimate and make sure you don't miss anything while at the same time providing this excellent customer experience, it's just not gonna happen. So yeah, they, this, this idea of the staircase renovation. Um, it's just so interesting to me because you guys are residential repaint, but you've carved this thing. And even if, you know, just coming at it from my marketing. Hat, right? Even if you guys aren't leading in with it all the time, even if it tends to be an add on and, and it's a nice $1000 add on. I'm betting that it helps your close rate a lot because I'm betting when you come in and, and, and there are other painting companies that are estimating against you and they don't say, oh hey, we have a whole staircase renovation team, here's what we're gonna do to your staircase, obviously people are gonna care about their staircase, that is such a differentiator. Yeah, I think it is what no one wants to deal with more contractors than they have to write. So you get multiple quotes and after talking to, you know, three stair guys and three painters um that gets cumbersome and I think that stalls out people actually purchasing what they want because it just becomes overwhelming. They're like, gosh, now I've got to have six or eight people in my mind. Yeah, yep, so it just paused and then we can avoid that. Yeah, man, good for you guys. So let's dive into your employee model. I know that's what, what people are contacting you about, you guys have a bit of a different model, let's get into it. So all of our field staff has paid a percentage of the project, you know, full disclosure, our number is 31% your overhead and yep, um you know that that may be different in different markets. Um honestly it should be different if you do way more faux finishing your production painting, you know that number won't work for everyone, but um it gets you kind of in the ballpark. Um we've been doing this about seven years, so um if I went to the back and told the guys we're going to switch it up and go back to our early, I would not be taking taking care of real well, they would have a problem with that, they love this model. Um so it several things when we started it, the fear of the crew guys was john's gonna want us to work faster harder more in, in that mentality um and they're not totally incorrect in having those fears because I've been guilty of that as a boss, you know, but um functionally what's happened is we're transitioning to just a lot smarter so um you know, we get out of the shop quick if guys want to take a longer break and they wanna have coffee in the morning. Cool, you can, but you're not grinding out my clock, you're just not getting the job as quick. Um you know, trips to the store trips to Sherwin and PPG and these other things um it's fine to go stand in line and wait for them to mix your paint, but that costs my guys money, they're not getting paid $20 an hour to sit there to actually paint a wall. Um, you know, that's downtime to them. So they're looking at more as a business owner, we order the weak materials a week in advance, especially with supply issues right now that everyone in our industry is dealing with. That's nice because you don't have a hiccup and we can only get you two gallons, but you need eight of this. Um, you know, so we order that stuff in advance, we have it shipped to our shop. Um, those big, those big suppliers will do that for you where you let let there guys get paid to deliver. Why would you pay your people to go and pick that up? I mean fuel's expensive time is money and um, so we do some things like that are shops, stock is critically important. Our van stock is important. You know, we, we stocked the ceiling paint trim, paint drywall mud of several different varieties and several different kinds of roller covers and tape if it's masonry tape or low adhesion or frog tape for all these specialty things. We stock that in quantities that we know we're going to go through a reasonable amount of time. Um, so that our guys can have a well stocked ban and get to work and working makes money sitting in the paint store doesn't make anyone any money. So um, you know, culturally we've been really successful with that, but I'd be lying if I told you that everyone fits into that model or that there wasn't some growing pains, but right now all of our staff is so on board with thinking about this is controlling their own destiny. Um, you know, our pay rates are just kind of through the roof, to be honest with you, wow. So when did you create Mcfarland painting? Um, you know, I started like a lot of guys did, I kind of started out of high school and high school with a guy and you know, I got my builder's license, um, my second or third year in college and it became pretty official when I, You know, decided to leave one university and go to another for construction management and up to 2005. Um, you know, that's when things got serious. Okay. And so 2005, it got serious and you started this new pay Basically pay um, method seven years ago. Yeah, it's probably eight at this point, you know, I think it was probably 2014 2014. Okay. And you're saying, did you lose some people, you said it wasn't fit for everybody. We didn't have people quit immediately. When I say it led to the departure of some folks, certainly, I think it did, um, there is inherently some stress in this and that it just doesn't fit everybody, you know, and, and probably because it was new if I had those people back and they came into the system today. Um, I think it probably, they'd still be here, but the infancy of it and trying to learn on the fly and having a lot of faith in me with a system that wasn't that proven. Um, there was definitely some people that I would wish to have back that just didn't, didn't fit it at the time. Sure. What prompted you to make that change? Actually, it was two of my guys who were driving an awful lot. They were high production, really good, good guys that said, you know, maybe there's a way that we can look at this. We're not like complaining about money, but maybe the next stage is to kind of do it this way. Um, and we ran some trial stuff and we had those guys do it for a month and by then we started to have other guys say, whoa, what is this? What, what is Aaron making? What did you guys come up with? Um, it was kind of an opt in almost at first and then in the second month it became no, we're all transitioning. This is the way we're going to do it. All right. So you have, your labor is 31%. What do you find that your materials tend to run? I want to get your gross margin here. Yeah, we're 17-18%. Okay. So you're going typically a little over 50% for your groceries. That's great man. We have another metric for managers to that, you know, it's if we can go to all sorts of wormholes, but we pay um if they're operating it under 18% were doing a quarterly bonus for those project managers, operations guys where they're getting 100% of that back to them. Um and that bonus could be a couple $1000 a quarter. Two guys that even kind of sort of keep an eye on it. If they're really diligent, it could be four or $5000 in the quarter that they're getting. Have you ever found, I guess my fear would be if the quality control or oversight wasn't there? Have you ever found guys trying to kind of manipulate the materials or get lower quality paint to try to get the bonus. Yeah, not not with paint as much. And honestly, what we've learned is it's not really even about the materials are saving every last strip of tape, it's more time working less time with the downtime. Makes the relationship of production versus materials much more in their favor, you know? So instead of, you know, we did, we had some problems like paint trays especially right covers are disposable generally, but you know, brushes and trays were not being cleaned out because let's let's throw it out, let's move on to the next one. You know, um that stuff we had problems with, its why we made this kind of quarterly bonus component Because we got where we were getting away from 18, which is our historical numbers 2 22, 23%. Um, and, and obviously by that point we've already been doing the labor component at 31. So reducing that by three or 4% of the labor would have gone over really poorly. So the company needed something to protect us on the other end since we're not the ones purchasing most of the stuff. And this, this solution has really been been successful with that. Have you like have you guys found that production has increased in speed or quality fewer callbacks since implementing this stuff? Yeah, I would say all of the above now, you know, our staff has grown wildly and it's, it's different people running the ship in the field. But I do think there's an accountability. My concern is an owners. Are we rushing stuff? Are we cutting corners? Are we not doing it right. But when those callbacks pull you away from the next project and you have to go back and do something that didn't get scraped well or cocked right or a thin spot behind the door. Um, that's really costly to the guys. So the ones that are most successful really do a nice team walk through when we're done with the job. It's no offense to any homeowner but we don't want to see again until the next project. You know, we have a great warranty, we hate doing warranty work. We want to avoid that at all costs. Callbacks are even worse. So you know, forgetting the tool on the job is terrible with us that hour, hour and a half that, that cost the guys is a big deal. So they're the best guys in our company do a really thorough kind of team walk through where maybe, you know, you have trim paint, I have ceiling and other guys wall color and we're all getting, you know, six different eyes on it, hitting it from all angles. Tall guys, short guys, you know, we're all looking at it so that when we're done, we're done and those callbacks have really gone down since we started it. Now when you do get a call back, do you make the same crew go back and do it generally. Yeah. Generally, um, we don't have callbacks that are, are so cantankerous that the people don't want to see a certain person back. It's usually, hey guys, I noticed this or a lot of it is this happened. You know, we're moving stuff back and we stopped the wall. Um, we'll pay our guys to go back and touch that up and then not charge a homeowner for that. But yeah, most of the time we try to keep it in house, the same team of guys is going to decide who goes back. So you guys will at that point, if the homeowner stuff something up and asked if you can fix it, you'll just pay your guys something hourly to go back and do it. Yeah, generally, and culturally we have guys that they're not going to turn in a sheet for that or they're not going to log an hour or two hours for that, they're just gonna handle that because they, they know they know that it's the right thing to do, but we wouldn't mind paying it either. So with this compensation plan, what I mean, what's the range that you're painters are making? Oh gosh, I mean it's, it's all over the place a little bit. It's, it's our area, right metro Detroit. Um I would say our average guys are making 25 or 30% above our competition. So a guy with a year or two experience is probably going to be making 18 to $20 an hour in our area. Um that guy is in the mid 20s consistently with us. Um and you know, it's, it is a little variable, This is the stress for some people if you have some jobs that are different um that pay a little differently, you know, we do go through and cost stuff and figure out what the production actually came out to make sure we have accurate quotes, make sure we did everything in the right order and we have the right staff and you know, sometimes the extra guy or to help, sometimes that really slows down the project and gets it out of sync, you know, so We go through and evaluate those that we're putting our people in the best position to make as much money as possible. I have, I have guys last year that did work on a Saturday and they made $150, an hour. Not that's what they got paid. Um, the company made great money, you know, signing those checks. Does it make me feel funny every now and then? Absolutely. I'd be lying if it didn't, but um, you know, we got paid to everyone wins. Let's put him in the situation and make as much money and provide the best product and not worry about what the total was. Do you guys find that any of your employees make less than, than the average of your market just because they're not performing as well? No, no, we really don't. You know, they're put on a team and that team is kind of balancing them. Um, you know, so based on their skill sets, I would say even people that are, are new to us or a little newer to the business. Um, it doesn't take them that long to get them, you know, that's our goal is kind of 20% above you know what our competitors are paying consistently. Got it. Yeah, it seems like the, the stress I guess would be the fact that it's not certain how much money they'll make, even if they are pretty much always making above their competition. This kind of uncertainty is something entrepreneurs and business owners are pretty comfortable with. But employees, it's a bit of a novel concept. Sometimes it is, and you know, we have them actually as a group run kind of run their job cost at the end of a job they turn in what we call a curbside report, so it's really generic stuff, you know, to do, ask permission to park on the lawn sign in. Did we do a walkthrough? Did we leave the pain talk about paint storage and you know how long they can wait until they put stuff back and all these other typical checklist things. Um at the bottom of that, they figure out what the average hourly production for that entire job was. And that's open information. So we're in a crew of three people and we have a really fast skilled person, a guy in the middle of a brand new person, obviously brand new guy knows he's not getting what the average is, but the guy in the middle probably is. And so those guys know if our target is $27 an hour average and we're a crew of three and you're on the low end, you're getting paid 20, the average guys getting paid 27 and the crew lead guy is getting paid 34 and you know that breakdown in that relationship. Um since they figure that out on every job, I think he's is a lot of that stress. And if we have something that comes back bad, we really figure out why, you know, was it a problem with the quote? Did we miss stuff that we couldn't go back and reasonably charge for? We just had to eat it. Um you know, did we have too many guys there that we have dry time issues because we put six guys in the house and you know, we just outkicked the coverage and uh you know, just had too many bodies there and so we try to staff those projects correctly to have them come back right to, you know, getting stuff done in a day might not make sense, but six guys, maybe two guys or three guys for two days is a more profitable, you know, fit for us and a better look for the clients. So we adjust. So the, this idea of low Middle, high for a crew of three, is this your saying this is based on seniority. So how many years they've been at the company? Excuse me not even necessarily seniority, but you know how their skill sets fit in. Um you know, we do how we're set up, we basically have five teams of guys right that are about 10. An average of about 10 on a team. Those guys kind of, you know, adam's attract pieces to make their daily cruise depending on the project. You know, 2 to 3 people on the crew generally makes a lot of sense for our type of work, But we have some larger jobs that we may all come together and have, you know, eight or 10 guys on one big project. And so when those project managers are determining who's going to go, where they're looking at what that best fit is. You know, maybe a job is really just all high end stuff. So it's gonna be two of our best guys going there and doing a lot of just detailed work. It's trim only in a house where we're not prepping everything off. We're doing touch ups that, you know, in a finished space where we can't move everything, we gotta dance around stuff. Um you know, we were just staff it accordingly. So I guess when I'm looking at this, this is an area where I could see potential conflict, you know, people saying why would I shouldn't be at 20 and he's at 34. How do you, how do you decide that? How do you deal with that? Um, I don't, they do. And and that's what's kinda nice is Everyone on a team that works together consistently, really knows if that average number is $27 an hour. Really what that means to you and to me And in that relationship generally remains consistent. You know, now if you're a low end guy and you're used to 20, but it's like man Brandon just has been killing it this week on exteriors. He's learning how to spray his production and masking is, is going through the roof. He's just super helpful. He's talking to customers. Um, we can shift that and give somebody a bump even temporarily, they're just going to get a bigger piece of that pie. We deal with very little in fighting on that I think because even at the low end they're being paid well. They don't have much to complain about and they see what the high end is. Um, and we have stuff where we'll move guys around and say, hey, when we took, you know, john off a project. Um, Gosh Brandon and Mike did a lot better as a team. Um, maybe that's not a great fit. Maybe john's a good guy, but he works better with a different type of person who works better by himself. Um, and we may shift those things around to, to have everyone be happy and successful. But I know mom mentality or something that kind of fixes itself with the crew. That's really interesting. So let's, let's talk about your, your, your chart for a second, your organizational chart who, So you have 55 teams of 10 people do you have basically a project manager on each team who's kind of running this or what does that middle management look like for you guys. Yeah. So we have our office staff, but we have an operations manager. Garrett and and he kind of does everything. He's that buffer between sales between the office between the field guys uh and girls and, and Garrett's job is to make sure that things are generally moving along and that those on site project management guys are doing, you know, they're collecting that check, customer satisfaction is high. The crew's happy, we have the right volume of work being assigned to each team so that we're not overbooking the first team and then the third group is available next week, you know, so we try to meet her all that. But those on site, you know those project manager guys they're calling and actually booking their projects. So we use a, we use java for our crm but you know once we start tagging jobs to accrue, they call those at the end of the week, every job that was sold and in order they go and assign dates, you know, they're looking at photos and talking to customers and getting information and saying, okay, you know, may 5th and six is when we're gonna be there. Um they set those dates, they also do a call the week before to remind that customer, hey make sure you have this and that's ready for us, your power washing and need hose bibs to be, you know, one winterized. No, you're not familiar with that in lovely florida. But up here we gotta turn off extra, how is this And you know windows closed access to things and stuff like that. Um those guys are doing that. They're actively working in the field, 50, of the time on projects. Either training or starting or you know starting or finishing, closing down projects. Um you know, but generally when they go to the field they have a purpose. It's not necessarily just to get stuff done. You know, maybe they're doing some harder work or some difficult stuff or maybe it's a little higher needs client and they need to be on that side a little bit more. So they kind of know that and they assign themselves to spend a little more time there. What is your interaction? So so they're interacting. The project manager is interacting with the customer to make sure everything's set up running smoothly. You know, you guys aren't delayed um because I hope its hose bibs aren't ready and things like that. What is your system or do you have a system for gauging customer experience um customer success, you know, when a project is done, what happens as a project manager asked for a review? Do you guys have anything structured around that? Yeah, we do we use we use broadly for that. So there's a lot of them that will do the automated response when we closed down a job in java, it automatically triggers broadly to send a review link, you know, thumbs up, thumbs down, would you refer us and we get that every single customer gets that. Um, we get very few people that are thumbs down and you know, we don't always get the second party reviews, but we'll get the thumbs up, you know, and that's how that system works. If it's a thumbs up, then it sends him a link to google or yelp for, you know, wherever we want that to go. Um, but if we get a thumbs down, that project manager is calling like immediately, you know, and like I said, that's pretty rare. Our response rate Is above industry average. I think they say about 13% for when I talked to those services, what we should expect to get a little bit better than that. Um because our guys do humanize it when they, when they close down a project, they tell people you're going to get this, you do cash contest for him a lot too. Um when we do a cash contest, we might do $100 per guy on the crew for the most name mentions in a month. Um, you know, it's great to get reviews, but like those guys did the project so long as they Brandon and mike did a great job, not farming, painting, did a great job, you know, they did it. So, um, we, if we do something like that, I recognize people, we do it by first name, got it. So if they, you guys will do monthly contests and if their name is mentioned the most then they'll get $100 and some recognition within the company. Yeah, we do it on our monday meetings. You know, we kind of go through and say, um, you know, when we rotate that stuff through because it does get stale, you know, so we'll do that for a couple of months if we feel like maybe that closed down has been lagging and they haven't said, hey, you know, you can expect to see this and this means the world to me. And a lot of times just like we talked about what the wanting work in the winter, if you just tell people, it's just kind of bragging rights around the shop. I think our crew is the best and uh, you know, we want to be able to say that we're the best and we post them on the wall back there from time to time if it's, you know, really good ones and things like that. We double back and post on social media and these guys can act like that stuff isn't that important to them, you know, that they get very cavalier about whatever. It doesn't matter. But when they see their jobs and their name posted on things, um, it's, it definitely pops them up a bit. Yeah, no, for sure. I mean people, people respond a lot generally to recognition and I think if people like to help people that they like. So I think if you're a project manager sounds like there's a lot of interaction there before the job really starts and then throughout the job, so that communication is on point. Um, if the customers feeling taken care of the entire way they're gonna be much more likely I think to want to help the project manager whoever is really asking for that review. I think you lose that when you grow right when it was me back in the day and I was the guy that did the estimate around the projects, there's a, there's a different relationship. So we worked really hard to try to continue that concept of the other company is really good. But the guys are the guys that are gonna show up and do this. So they have to be likable, approachable part of the family, know the kids know the dog's names and you know, we send the same guys back out to quote for neighbors and friends and family. We generally send the same crew back out to work for the neighbors, friends, family, referral sources, so that, you know, when guys say Kyle was great to me, the neighbor gets Kyle to, unless there's a really good reason why another cruise, a much better fit. You know, we try to keep that consistent and I like that a lot. So you guys are really focused on this human component. It's not Mcfarland painting, it's Kyle or mike or that's how the homeowners viewing it, right? We're, we get so hung up on, it's the company, but for the homeowner, the realistic experiences, it's the person who's actually in their house or painting the exterior of the house. And I think the fact that you guys, again, that's another point that's never really been brought up is when you're, you're referred, if you have as many painters or even remotely near as many painters as you do. Being careful to try to always use the exact same painters and crew that was referred. Um, that's, that's just a great point. You know, I think that that's something that could really easily be overlooked. Well, loco is far like, you know, handrails a specialty, Your cabinets are where if a guy does a project for a homeowner, we get in the neighborhood right? And you just kind of do the same thing. We paint all the way down the street for exterior time to time and we just, you know, they have a guy, if that guy isn't the right guy to do the stairway, we've had those people say, hey, it's been a pleasure, but I'm going to hand you off to steve to do your handrail stuff because I don't do it the same caliber that he does and I want you to feel like you're getting shorted or you know, I don't love you anymore, but he's the guy for you and, and that's huge too because the people don't, they will feel slighted a little bit, you know, that they're not like working in my house, Do they not like my dog or you know, did I offend somebody or, you know, not all from coffee and um, you know, trying to just make it so that we keep that smaller feel we have information, right? We can put tags and stuff on our system of, you know, don't let the cat out, you know, nap times and time of estimates. And when are we going to paint a bedroom? Because they got a kid going down for a nap. Um, those are the things that make a huge difference. Do we paint straighter lines than our competitors? I don't think so. You know, I don't think we really do, but we do a lot of those other things that, that means the world to a new mom. That's, you know, my six month old can take a nap and you're going to kind of move around us. Um, that's what they tell everyone. They don't talk about anything else, but that will stick. That is gold, john, that is just absolute gold. You know, I think it's so easy to just gets stuck in the technical and the fulfillment and well, we're just the best painters and we provide quality paint at an affordable price and this kind of logic, but that's the stuff that makes all the difference in the world right there. You're, you're making their life easier, You giving it, you know, giving a hoot about them and and them being really well cared, you know, them feeling like you care, that's what a lot of what people want, and you guys learning the kid's names, learning the dog's name's learning the nap schedule, learn learning what needs to happen with the pets because God forbid the review is that you let their dog, their dog or cat get out and get run over by a car, that's not a good review. Um that's huge, man. Do you guys actually build that into your culture? Do you, do you have them trained up on that stuff? We do a lot of that in house. Um you know, we do a lot of talking about those things that are important and I think if you recognize people like that and those things get mentioned in reviews inherently just bringing them up as the review, we might feature um you know, so, and so really taking care of my elderly mother and we know they did some extra stuff for that you guys might not normally do and move some furniture and some vegetables for um we highlight those because then we're kind of back door bringing it up, we don't have to make it a real big boring formal training session, but they know that like that's the stuff that sticks and we're pretty consistent with highlighting those things nice and that's a gold mine. So if there are people listening who they want to flip the script and and try this, I call it really an entrepreneurship model that you're running with your employees and want to pay them as a percentage of the job move away from hourly, what can I expect, you know, what advice would you offer them to make it smoother because I'm sure there are bumps on that road. Yeah, I mean you have to, you have to look at all sides. So one of the things that we've dealt with in transition is trying to get rid of the US versus them mentality and the guys that quoted now, if you're an owner and you're doing your own quotes, it's a little easier because you're the buck stops with you, right? But if you have someone else estimating, you're gonna get this us versus them mentality, you know, Mike wanted to just sell jobs, so he just counted this stuff a little bit more and now we're not making what we should make. So I think open book is really critical from accosting standpoint. Um you know, we get really good intel from our crews now that I didn't back in the day of like ah yeah, we had too many guys here, so, and so grab 90 minute, but they should have grabbed 20 minutes that slowed us down. The garage was cool. We had to do tapes seem repairs and you know, that held us up because that doesn't mean the estimate is bad. It means the job came back a little less than what we wanted just because of a little bit of human error. Um, but if you kind of show them how you're going to stack the deck in their favor with ordering materials, getting paint colors, saving them down time and then you're paying them the difference of that. Um, you have some more administrative costs in doing that stuff if it's you or an office admin. Um, but I will tell you generally, the people that are in the office doing that do a far better job than the field staff, anyhow. It will cost you a ton last to have some, it's really efficient on the phones and typing quickly to go in and get the colors from customers and put it in there and make those notes really fast. And the crew guys, I mean, they get kind of on a, on a platter. Honestly, it's all set up for them. They just, you know, they're good at painting. So why are we going to ask them to do material takeoff? Maybe that's not their thing. Or you know, to get clients heaven forbid sort out colors with the customer. There's a lot of guys that don't want to do that. So, um, if I had to talk to myself eight years ago, those would be some things that I'd say I'd want to get to faster, you know, really showing them what you're gonna do to make this better for them. Um and that there's certainly a cost, that, that administrative part, but we're going to give you a job packed with colors and locations and paint ordered, ready to be picked up already in your shop, um an outfitted van ready to go so that you can get to work and make money painting instead of shopping. So you you would basically explain to them the burden that you're taking on so they can see what you're doing. So it's not just while the owner just wants to make more money and just wants me to go faster and you would you would kind of run them through the numbers in a really transparent fashion, showing them how their job is now easier, how they don't have to do things that they may not like doing or feel as competent in doing and how they're ultimately going to make more money. So it would just be a transparent explanation and and empathetic, I guess, explanation of the entire process. Yeah. And if a job comes back really good or really bad, I think you dive into why, you know, is it is it something you should be doing more of if you're making a lot of money painting extra vinyl houses and those come back great. Well then you need to shift your marketing to give you guys more of those projects or adjust pricing on the other ones to maybe bring it up if you feel like you're a little deficient and when you do this, you get everyone understanding, we're just in the same boat. And instead of me, the traditional model as the business owner is the villain and we're going to kind of cap your hourly, have a buffer. So when something goes bad, I'm still going to protect myself first. You know, this comes with, we're all in the same and if you're making great money, so am I, we're happy. Let's continue to get rid of, you know, bad work or bad habits and, and focus on good stuff and, and go after more of that. Um, and that takes some time. I mean it does. I think if you're starting this, I think you need a couple of key people that are really bought into it and there were times less and less than if the job goes sideways. I'm still throwing extra money on it, accepting responsibility and saying, hey, I think it was priced right? But holy cow, it just didn't come back good and I'm not comfortable paying you that where you have to, you know, accept the responsibility and, and, and pay them so that they feel good about it. Um, but really try to figure out why, you know, we want to prevent that. Yeah. So yeah, I think, I think this idea that you started with a couple of your key employees implementing it first was kind of a trial run and then sort of almost made it an opt in. So it was a soft transition. It wasn't just all of a sudden, you know, people left on a friday and they got paid hourly, They came in on a monday. It was totally different. Um, is important when one of the concepts you focus on a lot is when things go wrong, figuring out what happened. Do you have a really structured process that you approach that with? Yeah, I mean now we do before, it wasn't a structured, so when the guys turning those curved sides, if there's a problem that's known on a job site, that's going to be an immediate text to Garrett, our operations manager saying, hey, come and look at this. Um our guys communicate with our estimating staff really, really well, but that's a little tricky and it's just kind of uncomfortable. So they feel like something was really missed and they handle a lot of it now, you know, we said it was 16 doors, there's actually 19 ma'am, those are easy to say. That's just math, right. Um, so they'll handle those, but if there's something that they can't really figure out why this is, it just doesn't feel right. Square footage seems off for this price seems, you know, odd or the prep work is way more than what they bid for. Um they'll call us out for a site visit and you know, Garrett will go through objectively and figure out what's happening and why on that curbside report, if we weren't called to the actual job site, we see a low number. Um We're gonna pull it up, look at the measurements, look at the pictures, look at the notes, talk to the crew and say, you know, why did this come back? Bad. Um Now we're getting that information without having to ask for it. We get stuff like I was training mike on this project. We knew we had too much labor but I had, I had to spend some time with them. They're cool accepting a little bit less than a stellar home run payday on that day because there's a means to that end, right, we're getting time with the new hire so that's that's valuable, will be valuable to them moving forward. Um and and that's okay. But you know right now we're asking everyone to kind of self police and if they do feel like there's an issue to bring it up and we get pretty deep. I gotta sign outside my door that says the problem with peeling back an onion is it's likely to create some tears. Um I don't know that I coined that phrase but I say it because um no one's above approach if we think there's a problem, we're gonna, we're gonna get down to the nitty gritty and I think what that does is it also eliminates small problems from feeling like big problems, they know that Gary or myself is going to spend an hour doing a double check of numbers on something. So if they have lost footage that was missed or something like that, we're gonna find out about it and we're gonna know or if the crew didn't do things in the right order, they're doing drywall patches the last day of a five day project. I don't need to know anything else you're out of sequence. You know, something gotta rely on your end of it. It wasn't an estimators deal. And culturally that's been really, really important for us is to try to get everyone understanding that, you know, there's gonna be some problems. Everyone's human. Let's figure out why. And let's correct it and move move on quickly because it eliminates at us first now. Yeah. Makes sense, man. And you have a trust but verify thing going on there, um, figuring out what's going on. So how do you guys find your employees typically? I mean we have guys from everywhere. I mean back in the day, we, it was, you know, craigslist was a decent medium right now. We're getting much more from indeed in those larger hubs and we do anywhere else. You know, personal connections, A lot of we have a lot of folks that are from either networking groups that were in, um, or you know, extended friends and family. Um, you guys bring coworkers on with them after they've been here a little bit and get us out that's been happening a little bit more and more. Um, people that are here for six or 10 months. Um, you know, they're not even really recruiting people from where they were before, but just in conversations, Hey, you know, what do you like about it? They're, they're more excited than you would expect an employee to be. It's not like, yeah, it's fine. The guy pays me good, we're busy. I mean everyone's busy. They say stuff like, man, it's crazy. We, you know, we got this pay system is, it's just insane. And I'm making a ton of money and I control my own destiny and you know, we got good gear. We have nice shirts, you know, the guy got us tank tops this summer because I had to test cut off t shirts, right? So I don't like that look with the sleeves tore off. But tank tops was my concession. If you don't want to wear full sleeves, we'll give you guys a hem, tank top and you know, things like that that the guys are into, um, that gets back and kind of attracts similar people, you know, connection paint stores and things like that. There's, this is a transient business a little bit and these people that are always kind of looking sometimes for the wrong thing, but at least they're having conversations about what is it like. And so we educate our store managers know how we pay people, they know the culture here, they know what we're doing. And so that's good. You get a little bit of a reputation locally where it's like, hey, if I'm gonna leave somewhere, I at least need to talk with them. You know, you get a little momentum with that I think. And then you have incentivized, you obviously have incentivized your, your painters, you've incentivized your project managers to keep material costs down and you give them quarterly bonuses. What do you, how do you incentivize your estimators? What does your play look like? They're um good question. So they have a base, they have a base salary. Um but two thirds or three quarters of their pay is variable. Um We do a closing percentage bonus, um that's paid quarterly. It's kind of 5% increments. You know, I think that that's one thing that they can control quite a bit. Is there closing percentage? Um You know, certainly almost all of our leads and and estimates in our business are provided by the company. Our sales guys are really just estimators, they don't do a lot of marketing excited from some, some home shows and some small stuff. They're not providing a lot of their own leads. Um and then we're doing a percentage pay on and close deals. Um but they make a lot of money because they have kind of, their yearly targets has broken out into quarters based on how much work we historically do. We just finished quarter one and you know, over the last 78 years, 18% of our revenue came in Q one. Um, so we take their, their goal, um that's not like the high end goal, it's kind of where we like to double their commission right now. That's $800,000 in sales. Um, everything after 800,000 doubles their commission. So we don't expect them to hit 800, we expected to hit a million a million to. Um, but we like to reward them when they are performing in that area, there commissioned doubles For those. Um, so this last quarter, we had all four guys, you know, hit their, their, their number. Um one of them hit it in the first week of February. He was, he was at that 18% of his 800,000 and um, he crushed it for a long time. Everyone was happy at that. Um, And with the sales guys too, we do a lot of open book reporting. I mean their sales numbers are disclosed for all of them to see. Um, We're not cherry picking leads for certain people because we like them. We try to send guys with, you know, whatever they estimate the best, some guys do better on cabinets or exteriors or big commercial jobs and um, same, just like the field guys, we want everyone to win and there's really not a point in hiding it. So if I'm having a little rough go in, my closing percentage dips, my counterparts are going to see that a little bit. Um You know, I think culturally that just kind of keeps everything above board and everyone is playing in the same field and for the same team, you know, so we don't deal with a lot of problems with that either. What do you guys expect for your closing percentage? Um we start paying a bonus at 45%. My expectations are 50-55% realistically, but we start paying something, you know, we kind of say that that would be like a B minus C. Grade. Um so it's worth something, you know, maybe dad takes you out for ice cream, but you're not going to get a new bike out of the deal or something, right? And then, and that that breakdown goes all the way up where it gets insanely high above 55%. Where I think you're really, you're really making a difference Where that can be three grand plus per quarter um to get into those higher numbers which which do get hit sure because I like that as opposed to just a flat percentage because those brakes, You know, we're paying another 500 or thousands of dollars but we have, You know, tens or hundreds of $1,000 in additional work that we're getting to get to that point, how'd you come up with that, that tiered system? I don't remember to be honest with you, that's been around since before the lump sum pay system. Um I have my first estimator needed a way to kind of keep it interesting because I really do feel like that's something that you know, their time in the home and their follow up our prices are not going to win or lose us jobs. Um You know, we're pretty consistent with the market around here and there's not a lot of variation between most guys in my area. Um you know, I thought that that was something that if they provide a fast estimate and fast follow up that they could add five or 10%, you know those numbers. So your folks, you think for them it's it's more it's less time in the home. I guess it's kind of what you're going for but more quality. Yeah. Actually I would probably say more time in the home. We don't provide the actual quote in the house, we come back and type that up, which I know some people really like to do the in house clothes. We found that this is the way we like to do it. We're gonna stick with it. But um you know, we talked about kind of feeling the project and if I'm there in talking with you homeowners see I want these rooms painted but they don't know if they want trim door ceiling or what the cost may be to that and if you have a house that's only a couple of years old, but the ceilings don't need painted. I'd rather not charge you to paint them. Let's paint another room with that money. You know, if the trim is okay and you just hit your wall color, I don't want to sell you the whole thing for a few 100 bucks like let's let's do what you want, not what you told me you needed. And so trying to get that where they're feeling the project I think is critically important. Again, they're starting that relationship with our guys, right? So with this larger company, I don't want to just be where there's no faces and names. It's just some dude that showed up with the company shirt on and and handed me a price and locked out. Um, you know, try to figure out why is there a paint product we want to change from our base products because they have a need there getting rid of the house, we don't need to go top end or they're gonna be here forever. So we do want to go with good stuff or they have kids or allergies and You know that stuff takes 30, 40 minutes to do and so feeling that project and trying to come up with why what are the hot box, the little elderly lady that needs, you know, stuff done more slowly is going to get a different estimate, a different approach, a different crew than the busy mother of five that has soccer practice five days a week and is running in and out like a mad person all the time. Um that person wants their house done as fast as possible. The lady who lives by herself might want just one guy there for a week because mentally and physically that's all she can manage. That's what she, she wants and we can't get to that if we just measure rooms and provide a price. Yeah, that human element, you guys have a big focus on that. Well, john this has been uh insightful, this has been incredible. Do you have any other advice that you would like to share? God, I feel like I've talked blabbed an awful lot of people if they're interested in doing And transitioning this, I think you have to get people that buy in and trust you as an owner and show them why, but I think, you know that 20% above what you have been paying them um if I was starting this, I would say my job is gonna be to put you in a system that I can pay you 20% more, your job is just gonna be to follow it and it's not going to be working harder, faster, running up and down ladders, we're just going to get smarter and, and then because you'll get better ideas to all these things aren't my concepts right? Other people have brought the whole pay concept wasn't even my doing, it was one of my guys, you'll get the people that bring it in and say, man, I feel like, you know, cleaning out of materials, we clean out materials and prep for the next job at the end of the day, Why? Because people come in slow in the morning at the end of the day, everyone wants to get home so that you're in a different gear at 4 35 o'clock than there at seven a.m. So that's our process, let's do it. So everyone can get the heck out of the shop and if they want to come in and talk about, you know, what the sports game or have coffee and, and kind of slow roll their morning, they can do that. But we don't want to delay getting out of the shop, you know, so we do those things at that time because we get better production out of it. So I think if you're honest with guys and try to tell them what you're trying to accomplish from, they'll get better buy in than if you just say, here's my plan, you know, fall in line or hit the road, right, follow it blindly johnny, how can for people listening who maybe want to reach out to you and and have a couple of questions, is there a way that they can contact you? Yeah, so my, my email is just john at McFarlane painting dot com and it's M A C F A R L A N D um you know, they can message us on our website too, if they go there, you know, we get all that stuff in the chat box. Um and I certainly, you know, a couple of these guys that reached out the last month or so um ended up talking with half of them on the phone because sometimes that's easier than exchanging emails, you know, but if I get an idea of what people want to ask or you know, have an opinion on, um provide you as much intel as I can. I'm a huge believer in, you know, guys that are in other markets and stuff or even near me are not really, I'm not worried about like all my competitive secrets. I'd rather have a group of professional painters in our business and get rid of the guys that make our lives miserable rather than hide and protect every single secret and not share anything. I think that's a disservice to our peers. So elevate the industry. Well, john, thank you for your time man, thanks for coming back on the show. My pleasure Brandon. If you want to learn more about the topics we discussed in this podcast and how you can use them to grow your painting business, visit painter marketing pros dot com forward slash podcast for free training as well as the ability to schedule a personalized strategy session for your painting company. Again that you are L is painter marketing pros dot com forward slash podcast. Hey, they're 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@Painter MarketingPros.com and I can give you personalized advice on growing your painting business until next time. Keep growing.