Welcome to the Painter Marketing Mastermind Podcast. The 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 PCA 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.

In this series titled The Commercial Couple, Maggie and Matt Kiper of Harpeth Painting will be discussing how they built a successful commercial painting company together advice they have regarding married couples working together and finally specific thoughts on female entrepreneurship and empowerment within the traits.

In episode one, this episode, Maggie and Matt will be discussing the different kinds of commercial work and how to choose your niche. In episode two, they will be discussing how to break into commercial painting now that you know your specific niche. In episode three, Maggie and Matt will deep dive into completing the work successfully after you have landed your first commercial painting project. In episode four, they will be discussing how to decide whether or not working together with your spouse is a good fit for your life.

In episode five, Maggie and Matt will dive into the superpowers of your partners and how to effectively work together. And in episode six, the final episode, Maggie will be discussing female entrepreneurship and empowerment in the trades. If you want to ask Maggie or Mac questions related to anything in this podcast series, you can do so in our exclusive painter marketing mastermind podcast form on Facebook. Just search for Pain and marketing mastermind podcast form on Facebook and request to join the group or type in the URL facebook dot com forward slash groups forward slash pain marketing mastermind.

Again that URL is facebook dot com forward slash groups forward slash pain. Mary mastermind. There you can ask Mag your Mac questions directly by tagging them with your question. So you can see how anything discussed here applies to your particular painting company. What’s going on guys? Hey, thanks for having us. We’re back. Is this 3.02 0.03 or 4.0 I’m not sure. I think Maggie’s been on it together. The first one together. Have you guys not, not ever done it together? No, no. Well, then we’ll call it one point. Oh, nobody likes to put us in the same room.

Well, we’ll see what happens. You guys are, are in the same room right now talking into one mic. So we’ll see how it goes marriage. We wind up end up skipping right to episode four. This was episode one, but they started fighting. So now we’re on to episode four. How do you know how to work together? Now, we are uh we are gonna discuss different kinds of commercial work. You know what? I always forget this part. Not everyone knows who you guys are. You’re famous. You’re, you’re super attractive, famous couple in the trades.

Congratulations to both of you for that. Uh But if you could introduce yourselves, your company, kind of what you do, how long you’ve been operating just so we can get some background as we start. Yeah. Uh Harpeth painting out of Nashville, Tennessee started about seven years ago. Um do a pretty good split of commercial and residential work. I had a background in commercial and uh kind of to, to kick the company off a little easier a little quicker, started doing residential work and Maggie’s been an active part of that really since day one, but had many different roles until uh about two years ago.

She took over as CEO Nice. That’s awesome. Uh OK. Thank you, Maggie. Anything to add before we dive into, to commercial here? No, I think um I think just emphasizing that we Matt doesn’t dabble in commercial. Matt’s crushing it in commercial. Um The breadth of projects that we’ve done is pretty exciting and from big to small. So we’ve got a pretty good spin from the commercial perspective, which is very unique for a company that also does residential. It’s a, it’s an odd delineation that we have um with the breadth of what we do, but it’s definitely, definitely working and hopefully we can share that info.

So I went to your guys’ presentation at P A Expo this year where you’re talking about breaking into and, and starting and growing a commercial painting company. And I remember one of the questions was, how do you basically make sure you get paid and they haven’t paid you. And you had said, well, not everyone has someone who looks like Matt to walk in and be like, hey, you haven’t paid us yet. So it up, you know, I still haven’t had to use that technique yet. Yeah, that’s funny.

Matt is, is very big uh for anyone who has never seen Matt. All right. So we are discussing uh different kinds of commercial work and how to choose your niche. What do you got? Uh Yeah, basically kind of really to the basics of commercial work, you gotta break it down into whether it’s new construction that you’re working, that you’re looking for a new building being built or an office build out or something like that. Those are kind of, I would say there’s more variables to that kind of work.

Um Commercial repaint is another market that’s, you know, repainting your shopping center or repainting your doctor’s office or whatever. Um, those can be a little bit easier to get into because they operate a little bit more like a residential repaint market. There’s some, some differences. But, um, and really, then between those two kinds of work you can start going down the rabbit hole of, uh, you know, do you want hospitals? Do you want schools? Do you want churches? Do you want office buildings, multifamily? Uh And again, they all, they all kind of have their pros and cons under those two umbrellas.

Got it. So starting out, it’s very similar to residential, either new construction or residential repaint, you know, commercial repaint and then it is easier to get into commercial repaint. Would that be because for new construction, you basically have to have, I mean, that’s gonna be probably a little more relationship driven with general contractors or that. And then just the project cycles are usually a little bit longer. So, um you gotta be familiar with bidding off a set of plans, turning in a proposal and it may be several iterations of that proposal between budgets and the final pricing.

And then as a painter, you’re typically one of the last trades on site. So from the time you, you bid a project, the time you’re painting, depending on the size of the project may be three months or it could be two years Right. That’s why it’s a little, it’s, it’s, you gotta add that to your mix or you don’t have to. We do. Uh, but there is a, a longer ramp up period. Just get that work and produce it and sell it. So for people who are not really doing any commercial painting work right now, you would advise them maybe to start with the repaint.

I’d, I’d start with both if you’re comfortable with that, but you could expect to turn over a repaint quicker than you would. New construction is the cash flow cycle. So how, how long are cash is tied up? Is that longer with new construction? Whereas you get paid out a little faster with repaint or not really in general. Yes. Now, in, in repaint, a lot of times you’re dealing with a property manager or direct to the building owner, uh and their terms are usually a little bit quicker and more favorable and you’ve got a, a direct point of contact to negotiate that with and, and sometimes these, depending on who you’re working for, they’re, they’re not going to issue you a contract.

You can send yours and make it very similar to your residential repaint where you want to get paid pretty quickly. Uh But with new construction, there’s little to no negotiation on when you get paid. It’s contractual and sometimes they don’t even abide by the contract. It can get, you know, beyond 903 to 90 days, depending on when they collect from their client. Yeah, it’s not, it’s not necessarily a delinquency or a, it’s just a process that has to be followed. Got it. So you need to be able to float some, a little bit more capital if you’re gonna do the new construction.

And that’s why we started out, kind of doing both from day one is because that residential really helped us have the cash flow to do some smaller commercial stuff right off the bat. What, what, uh, I mean, how much money should a painting company have in the bank account to be able to float, to really get started in this world? You just had a good, uh, percentage tip from somebody, didn’t you? I don’t remember, but at least 3 to 6 months of operating expenses. Um, you know, we run, we run a pretty big operation and even, even in our size, there’s still dips in billing cycles where we start to get, you know, a little bit nervous and we’re like, all right, we’re gonna need some of these receivables to come in soon, you know.

So, um, particularly then at a smaller size, I mean, you’ve got to assume you’re not gonna get paid for 90 days on what you bill. You have to assume that. So that’s three months of payroll, paying for lights operating expenses, et cetera. And with these, with these agreements, these contracts that you guys enter into with the new construction what are the payment terms typically like? Is it usually uh pay through hours or like a, a lump sum at the end? How does it, how is it structured? It’s based on a monthly draw structure.

So we would typically, and this may vary across the country but where we’re at in the Southeast, we submit uh either an invoice or a pay application on the 20th of the month. And then that general contractor then submits their payment to their client, the owner, the the first of the next month. And then typically the owner has 30 days to pay the general contractor and then they have 15 days to then pay us. So you can see where the time starts adding up. That’s like 60 days right there.

If everything goes according to plan. Yeah, that’s not, it’s not perfect, man. Yeah. Yeah. Less than ideal. And then a lot of states have retainage. Yeah. So you’re, you’re withholding five or 10% off of every pay app that then you can invoice the final job completion. Basically, it’s their leverage to ensure if there’s warranty problems or we disappear at the end and don’t uh finish completely. They have a little bit of skin in the game to finish it. So like if you guys have, let’s say a set number of square feet, uh it’s like 753,000 square feet.

And in that month you do 333,000 square feet you would invoice for basically 33% of the project, less maybe 5%. So you’re gonna invoice for maybe like 28%. Yeah. And you can, you, the ideal way to play that is push that boundary a little bit on trying to get an extra 5% of completion in every invoice to kind of always stay a little bit ahead. Of course, the GC isn’t gonna let you take too much advantage of that, but there’s a little bit of game to play there as well. Got it.

You guys actually did 345,000. It was 603 and larger. More established G CS will have schedule of values, which isn’t something that anyone’s familiar with. Do you want to touch on what that is? Yeah, I feel like we’re bouncing around to a lot of details here. But um again, this is mostly for the larger uh in our market kind of the National G CS, but you’ll have to submit what’s called a schedule of values with your invoice, which basically is a breakdown of the areas of work. So ultra simplified.

If you were painting a doctor’s office, you could have a line item that said prime coat, completed, second coat, complete door frames, final coat touch up and you, it would break it down by that’s ultra simple. But, but that by those four categories so that when you submit, they know that, hey, the priming is done they ask for $1000 check, sign off. Good. Got it. So it makes it less arbitrary than just a percentage, right. So, you’re basically just drilling down into the actual specifics of the project then assigning a dollar value to each specific. Yep.

Ok, cool. Are the, I think it’s important to know these things with, with figuring out what type of commercial work you wanna do because, you know, people get, uh, bright shiny object syndrome when they see these bit invites come in online from national contractors and don’t realize that that’s a lot of paperwork. That’s a lot of back end, um, that goes into it. It’s not just estimating it and producing it. There’s a solid, probably 10 to 15% admin work that’s gonna go into that contract, whether it’s you as the owner operator or, um, you know, an admin that you have in your office, but it’s important to know that you’re not just cash flowing on new commercial, you’re also doing a lot of back end work and that has to be done properly or you’re not gonna have a good reputation.

I mean, I think that’s what’s carried us with some of these G CS you hear it from, from the project managers because they see all that back and they, they say to us all the time and you guys are always on time, your paperwork is always accurate and that has gotten us future work with those clients, that’s excellent to think about. So when you guys are providing an estimate, you know, like a quote, you’re submitting your proposal on these projects. Are you basically marking it up 10 or 15%?

Because you know, you’re gonna have to do all this admin work. No, the, the, the markup is the same. But I think because the dollar value of the projects tends to be higher, that’s where you get the coverage to do that. Additional admin work. Ok. Got it. Your average job size in commercial is not gonna be a $6000 AJ A s like in residential, you know, it’s gonna be upwards of 30 grand. So keep your percentages the same, but you’ve got more spread to uh tackle that admin work.

Got it. Ok. Yes, you’re making up with the volume. Um ok. With new construction versus, or yeah, new construction, commercial versus commercial repaint is the dollar value. The project size typically bigger with new construction or it could go either way it goes either way. Um, yeah, I don’t, I, I’ve never done an average on that, but just gut feel. I mean, we’ve done million dollar repaints and million dollar new construction and $5000 repaints and $5000 new construction. So I, I don’t, I don’t know that there’s, I think maybe if you looked at it in aggregate across the whole country that new construction would probably be a higher dollar value.

So I know you guys were recently looking at a project with a company that you worked with before, I think in Nashville for a project they have in Orlando, right? So how, how frequent, how frequently are you guys looking at out of state projects? Would you recommend that other commercial painting companies make this a habit? Would you recommend, hey, be doing it for a few years or get to the certain revenue range or some other sort of metric before you really start going out of state. What’s your thoughts on that?

My opinion is I, I still don’t like traveling for work, but there’s certain relationships where either you have proprietary information of the project or the project team where it makes sense to go. Um But it’s got to work financially for you and make sure you’re not missing what’s already happening in your current market just to travel. Yeah, sometimes it’s, it’s like with anything, right? It’s easier just to look at something and be like, oh man, I could, I could go make money there. Uh Even if it’s a residential repaint all of a sudden you, you want to do wallpaper installation or, you know, cabinet painting, but you don’t really have a process for that.

Um Kind of get hone hone the opportunity that you have maximize that. Get really good at that before you really start chasing shiny objects. Yeah, we got great advice a few years ago before we ever even considered travel work, um, from a friend in the industry. And he said, yeah, we’ll do it for the right client. And I think that’s a huge, we would never even bid a travel job. That wasn’t for somebody that we knew had our best interest. Our team’s best interest was gonna be great to work with.

You know, it’s definitely those jobs have always been for a specific client, not just for work. Yeah. Got it. Ok, because, yeah, you guys have worked with this, with this client before and so you already know the process and how it’s gonna work. It’s just a different location. Mhm. So let’s dive into Matt. You said, you know, once you go new construction or commercial repaint, then there’s another level and there’s obviously hospitals, schools, churches, office building, kind of anything that needs painted, that’s commercial. Um, how do we, how do we look at that?

Are they all, you know, pretty similar? There’s some like, oh, church is extremely different, like let’s kind of get into these verticals. So the biggest thing I would start out with is, is targeting what general contractors you wanna work with in your market. And it’s pretty easy to ask around and find out reputation and I’m sure just driving around town and seeing signs and pro projects, you kind of know who’s out there that you could consider working with. And a lot of times those contractors have kind of a niche that they work in.

So it’s, it’s finding the contractor and then understanding if it’s a niche that you want to be in, uh or some of them have multiple divisions where they, they may have their health care division, then they may also have a multifamily division and you may only want to work with one of those divisions. So it starts with the contractor and then, you know, the, the mix of projects typically, you know, hospitality is its own kind of world where there’s a lot of people that really stay in that niche.

It’s a lot of wall covering, you think in hotels every time you go into a, you know, your local Hampton Inn or whatever, it’s got vinyl wall covering in the corridors. So you gotta be, be able to do that stuff at a pretty quick pace. Um uh Multifamily is kind of another one that I really kind of put in a different bucket. It’s the your apartments and condos residential stuff. Uh And we just really don’t have a lot of experience in that market. It tends to typically be a little more blow and go cheaper, quality, cheaper price.

Uh But there’s people out there that have figured it out and do really well. Uh We just haven’t really um kind of explored that market to its full, fullest extent. One time you tried to price one we got laughed at because it’s too high. We’ve kind of found our niche in, um, kind of more complex commercial things that have unique finishes or, uh, even some lighter industrial work, uh, like manufacturing plants and processed plants and things like that. Um, you know, where you’re a little more, a little more exclusive as far as what the bidder list is because there’s certain things that not everybody can do. Yeah. Yeah.

Ok. So it goes mainly by the G CS. You’re gonna essentially driving around your service area, basically your town cities nearby, you’re gonna see major projects, you’re gonna see the, the big sign out in front, you know, the commercial painting company, you’re gonna get a sense of who are the essentially reputable G CS in your area. What would be the, the best step to connect with them? How do you, you go on the job site and start asking around? Do you just look for the website? Do you, what would be the next step?

I got to kind of take myself back a little bit because it’s been a while since I’ve had to do that. But honestly, that is a good way if it’s, if it’s a safe job site that doesn’t have secure entrance, go in and, and find out who the PM is and just say, hey, hey, and drop off a card and ask who their estimators are in the office that you should connect with. That’s the real grassroots way to start that. Um Obviously doing online searches is great.

Um There’s a lot of the bid aggregators out there building connected and, and Cot construct or whatever it’s called now, I square foot, um where they’re, they’re sending you kind of what’s out there being bid publicly, which is a good way to understand what’s going on in your market and who’s bidding. What, um, those are kind of almost a little bit like the equivalent to the Angie’s List uh, of residential because it’s, it’s the low hanging fruit. Anybody can submit a price on it. But, uh, it is a way to start building relationships.

So these online platforms where you can bid on projects, are they, you know, just be kind of blunt, are they sort of the lower quality that Angie often is in, in the sort of race to the bottom or is it a different scenario there? It’s not quite that, uh, dramatic because it still can be, you can still leverage your relationships. Uh, but for example, if it’s a, if it’s a public school bid and it’s getting sent out, there’s probably gonna be three general contractors on it and there’s probably gonna be 1013 painting contractors that bid on it.

So at that point, if you’re just sending a number in on that, you’re gonna have to be the most qualified lowest bidder no matter what because that’s what they got to get. So that’s, it’s not a great way to get the right kind of work, but it’s a great way to understand who’s doing what and what’s out there. So, how do you start? And I, I know we’re gonna get into this more in the next episode. So I don’t wanna dive too deeply, but now that we’re talking about it, if you go there, it seems like the only way in the beginning to even be considered would just be to be lower.

But if you’re too low, obviously, people aren’t going to take you seriously. You don’t know what you’re doing, not gonna be able to cover your costs. How do you start? Just try to get little projects that no one wants and you build up a reputation. So little projects are great. Uh, there is a little bit of a game to play with being low but not too low so that it’s, you kind of almost consider that a marketing expense to get a job. You can’t keep doing that forever, but it is a tactic.

It is a tactic to get work. Yeah. Um, because, yeah, you’re not, you can’t just be high bidder every time, the first time. And they’re gonna be like, oh, we just like you so much. We’re gonna use you. You have a good smile. Yeah. So there, there is a little bit of a, a play on the pricing component and then once you build that relationship you’re gonna get more feedback on, hey, you know, you were, you were three out of four but everything was pretty close. So, you know, you were in line and maybe next time just, just go a little bit more aggressive in your pricing.

Uh, that’s, that’s where you wanna be. You don’t want to be getting every job and you don’t want to lose every job either. Yeah. So the, the, oh, good. Well, I was just gonna say, uh, you know, the, the type of work you’re bidding on, kind of like what Matt said earlier just because it’s a GC, you might have a relationship with um you know, some of the G CS we work with all the time will bid stuff that particularly like you mentioned government work or uh universities here in town, they’re requiring the GC to take the lowest number.

So it’s not always a relationship, you know, piece, but that is contingent on the client, right? Not the GC. And so kind of knowing how that trickles down and the type of job it is, for example, the, the light industrial that we’ve gotten into, not, not to say we could name our price, but we can definitely price it well, because it is so specific and niche that we know what it takes to cover it. We’re not competing net price at that point. So the type of job is gonna be a little bit of an indicator as to whether or not you’re pricing to get it or pricing to produce it.

Well, if that makes any sense it does. Yeah. So the, yeah, some, some jobs are gonna be a lot more price sensitive. The extreme being, hey, you have to choose the lowest price period, which is kind of kind of stupid. But you know, it’s how the government operates. So the uh let let’s kind of get into Matt, you mentioned the Hampton Inn, right? So you, you for certain hospitality, things like that, you, you get really good at wall coverings. You have to be really efficient at it.

Know your margins really well. What are there certain projects or verticals or, or kind of like subverts here where if you do them, you tend to have more repeat projects or for example, you, if you do a Walmart, you know, you’re gonna start to do Walmarts all over the place. I gotta to repaint every two years versus other verticals like a church. Maybe it’s gonna be a little more one off. What are your thoughts on that? I haven’t really found that to be the case yet. I’d love it if there were certain things like that.

And I think they do exist. I know um a friend, for example, who did um all the Verizon stores around the country. So it was for a single client, but it was kind of a hey, over the next five years, we’re gonna do 100 Verizon stores and then you just like circle, circle, that’s a goal. Uh But we with commercial repaint. There’s definitely if you get connected with property managers, um typically, at this point, we’ve built enough relationships with property managers in town that, you know, it’s, that is as close to subscription revenue as we can because those property managers have a budget to maintain their facility.

The budget is decided, you know, from their parent company. And so they’re very much just you can even tell like quarter two comes around and we start getting emails from property managers because they’re on their next quarter budget and they’ll often at this point in time ones that we built really good relationships with will actually help, will help them price their capital projects. So things that are larger and outside of their budget. So to look at recurring revenue, I would say that’s the closest thing that we found is really strong relationships with property managers and they, they bounce around, they move facilities and so then, you know, we move with them to the next one, but keep the contact with the old one.

So that’s kind of helped spider that market for us. Yeah, then you get to go wherever they want and you get to hopefully stay at the old property. And that’s basically what I was, what I was getting at was the recurring revenue. You know, I don’t know if it sounds like there’s not, but if there’s, if there’s like, hey, you’re working with someone and rather than, hey, I’m gonna bid on this one project. It’s like you’re gonna bid on the next 20 years. You know, you’re gonna repaint it five times over the next 20 years.

And so they get a 290% haircut or something, you know, adjusting for anticipated inflation. Um, but you get basically a locked in, essentially contract for 230 years. Yeah, but nothing’s perfect. I mean, that’s what it’s, nothing is a true Spotify subscription and painting. Right. You know, Spotify is just gonna auto dr and we’re gonna keep our relationship inevitably indefinitely, um, keep it low enough that it’s just like a little mosquito bite. Like. Yeah. Yeah. I mean, again, how often are they charge it? We had a, one of the universities in town actually brought us in and, like, deemed us one of their two painters for, for campus projects.

And so it’s us another painter that were supposed to be doing all the work on the campus. But then came time to paint the gymnasium, the athletic director opened it up to open bidding. They got six painting prices and gave it to the lowest bidder who wasn’t even one of the, you know, campus painters. So even at a, even in a job where we thought we were guaranteed work, not always the case. Yeah. This, I mean, it, it, you guys talk about this but it definitely seems like relationships is the name of the game with commercial painting. Yeah.

So let’s, again, this will probably be episode two or three. So I don’t wanna go too deep in it, but with relationships. So you, you’ve gone on the job site, you’re doing the grassroots effort. You, you figure out who the property manager is or estimators, you have some idea who to contact. Do you, do you call them and just say, hey, I’m a painting company. I wanna start working with you. Do you send them a gift? Do you show up? What’s the next step? There’s something to be said for showing up.

You gotta be a little careful with, not, not everyone looks like you Matt. Yeah, you gotta remember that most people are smaller. I might be a little better if I didn’t look the way I looked. Not everyone just says yes, yes, yes. Yes. It’s all yours. They turn around and run away. Uh Yeah, you gotta make sure to kind of be sensitive of their time and catch them and you can, you can tell the vibe if you walk in and say, hey, I want to talk to, you know, PM. So and so, and you walk over and he doesn’t look up from his computer and he’s not interested and you just, hey, you know, just want to say, put a face with the name because a lot of times you’re emailing these people for a little while before you meet them.

And um, but if, if they open up to you and want to sit down for a second and chat, take advantage of that and, uh, you know, lunches are great at first, I think they get bombarded with lunches. But they, if they’re, uh, open to new relationships, they’re gonna kind of reciprocate it back because obviously they’re, they’re looking for good subcontractors as well. Yeah. So if, if you’re confident in your service, you shouldn’t be timid to go introduce yourself to people. That makes sense. So, yeah, you’re, you’re basically can help them with essentially a business problem if you can make their lives easier by being good subcontractor.

I’m a big, big believer in leading with value. So it’s, it’s why, you know, kind of a big part of how we’ve grown painter, marketing pros, the education, free content, stuff like this can people who are, are trying to get in with the property manager aside from taking them to lunch or aside from saying, hey, you know, we’re, we’re gonna be a reliable, good subcontractor. And here’s why is there anything else they can do proactively for free to add value to that, that property manager to hopefully get it reciprocated eventually.

I think the more professionalism that you can present your company with, I don’t think we in our industry realize what a long way that goes. Um You know, making sure that your website reflects the image because they’re all gonna go to your website, the property managers, the G CS commercial world is different. Um they’re not looking at Google reviews, they’re looking at the content of your website. They’re looking at the professionalism of, of your email past projects. Yeah, they’re looking at pictures of past projects. Um, there’s a lot more research that goes into the commercial relationships in terms of what they, how they stalk you.

Um, and so just making sure that there’s professionalism in, even in your emails that it’s not, you know, sloppily without this formal signature at the bottom, there’s a lot of little things that you can do. You’d be surprised how quickly you could probably get a commercial repaint job with effective emailing. Um Not, not even having to go there, but just knowing how to market yourself and how to explain what you offer to the property manager via email. So, is this, would you guys consider this a, a big opportunity because the bar is just so low like in residential repaint?

You know, there’s the joke kind of nut joke. If you show up on time for an estimate and you’re wearing a pole and you don’t look like a total jackass, then you’re very likely to be able to get the project if you do your job. Well, is that kind of like commercial repaint? The kind of jackass is sending emails and if you can show up dialed in, you’re gonna already stand out, that’s part of it. And also understanding. So in, in a residential uh case, the customer’s biggest fear is probably color or are they gonna get paint on my furniture?

Um, those sort of things in, in commercial, their biggest fear is looking bad to their boss. Do you want to remove any doubt that you’re not capable? Uh, they just don’t wanna have to worry about it. They’re not worried about color. They don’t even worry if you get paint on the floor because that’s not really what their boss cares about. You know, they just want it to get done and, and be professional and get a bill and move on to the next thing. So making life easier for them is and removing that fear is what sells.

So that’s where I think that professionalism is a big part of it. Yeah, we had a res repaint or excuse me, a commercial repaint client recently. Um, one that we met via email. I um got a certification to be like a vendor through our airport. Um And so that put us kind of on a list. So there’s some airport offices that needed painting. Um, nothing within the FAA just a true office repaint. And he basically, I got the job from emailing showing up doing a good job.

And then his thing was, it was night work, right? So we were doing like three or four offices a night and rotating through this building and his big angst was making sure the tenant was happy because in theory, he had to tell the tenant, how we were gonna break into his office at night and everyone’s stuff was gonna be compromised. And, you know, so I gave him a, you know, a little sheet of paper that he could give the tenant saying, you know, Monday night, these offices need to have all their items cleared out and put here Tuesday night, these offices.

So I basically handed him our project plan, which I think bought us. I mean, he’s again as close to a recurring client as we can get. And it’s because I made his job easy. I made him look good to the tenant. Um I made him have to work less. And so, yeah, he was just thrilled that we were able to make, like Matt said, make him look good. Yeah, I think it’s so important to think about when you’re selling to somebody, talking to somebody, their perspective and for homeowners, you know, it’s, it’s super, super personal coming into their house.

You’re outside their house that all their neighbors, their friends, their family is gonna see it. It’s either gonna be, I call it kind of a zero or a hero like, oh, man, your house looks amazing. Like who’d you hire? Wow. Right. You’re a hero or like, oh yikes looks like it looks like you had a kind of a mishap there with your painting company. Now, you, you feel like a zero with the commercial. It’s, it’s actually very similar, but it’s from a professional standpoint, which is just as, as personal, if not, maybe more personal because people wrap up their egos and really their livelihoods obviously in their career.

So if you make them look like an idiot or bad at their job, they might lose their job, they might not be able to feed their family. So they, every in both interactions, I almost find that fear or like concern is actually kind of a, a pretty big factor. So when you show up, you’re professional, you set clear expectations, you provide some sort of workmanship, warranty or you kind of allay that fear. And you say, hey, here’s what’s gonna happen. We stand behind it like Matt said past projects, we’ve done this a ton of times before you can look at what we’ve done, you can talk to our references.

It’s all about allaying the fear and then being like, you know, what if I choose you guys, I’m almost certain, I’m not gonna regret it. I’m almost certain that it’s gonna make me look good. I think that’s a super good point for sure. Uh rules regulations. So I know, you know, skyscrapers, right? High rises, for example, there’s certain regulations and whatnot that apply to that. Not every, not every painting company can engage in those as people are looking at these different verticals. What kinds of rules, regulations should they be aware of?

Uh in terms of, of what they can and cannot. Uh maybe enter, I’d say the biggest one is gonna be safety. Ok? There’s obviously on, on residential work, you need to take safety into account, but there’s typically not anybody checking you on that or auditing you, OSHA is not as involved. Yeah, in commercial work. Both the uh, the GC, the owners OSHA, you’re, you’re getting, you’re getting scrutinized at a whole another level on your safety. And there’s kind of two ways to go about this. The one way which I decided to do is really immerse myself into the role of, of safety director if you wanna call it that through classes and online learning.

And uh we, we kind of do it just in house, but there’s also really good third party companies out there that can help you with the safety program. Do your ad and you run all your team members through this. Yep. Got it. Um But there so you can do it through a consultant or you can do it in house, but just being very aware of the safety doing it correctly. Not, not just to keep your guys safe, but it’s also a great way to keep selling your company that they don’t have to keep nagging on you.

It’s like, oh, where was your daily safety report? Where were your toolbox talks? Uh You know, just doing all that stuff both for the safety of your guys and because if they don’t have to nag you about it, it’s gonna be a whole lot easier to do, do work with them next time because you’re like, oh those guys, they nailed the safety and that’s huge for them. Yeah. If people want, if you can make their life easier and you could be reliable and solve it, then they’re gonna be going to like you and flexible, um, the ability to tweak your insurance and your, I mean, there’s working with G CS, there’s a prequalification process that you have to go through that, you know, you, you don’t have say you have to meet their criterion for working with them and that includes very specific um insurance coverage.

It to the point where we have probably for each G, each GC we work for, we probably have like four or five different COIS based on the project and same thing with property managers. And so just knowing kind of from the front end, you’re gonna have to be able to maneuver through some logistical and clerical details to even prequel to work with them. And not all companies are capable, you know, upping your insurance coverage is a cost expense. So if you’re not already at the coverage level that’s required of a GC and you have to up that, I mean, these are, you know, things to think about start, that’s why starting small is beneficial.

It’s almost like a almost, I mean, not but almost like a capital investment of like there’s a certain front investment that you have to make, to, you get to play in the, in the game. People get so excited. I get so many messages. They’re like, oh, I was asked to be this, you know, commercial job and it’s gonna be like $290,290 or it’s like $275,260 project. And this is like, barely a million dollar company. And I’m like, that’s exciting. Don’t get me wrong. However, um, do you have $703,270 in the bank, um, to basically cover the cost of this project going from the numbers?

Have you sat down aside from looking at the money you’re gonna get paid. Have you sat down and looked at the other side? Yeah. Yeah, that’s where having great relationship with your insurance person is really important in commercial work because you got to have somebody that understands it and who can turn it around quickly. So if you’re, if you’re using an insurance person, that’s just a regular old broker, that kind of does a little bit of everything here and there, they may not know how to get that stuff or, or get it quickly enough for you.

So, so finding that right person is very important. How do you recommend finding a, a great insurance person? Referral? A lot of times your banker can help, a lot of times your attorney can help. And then also just knowing in your market kind of who to go to commercial construction insurance guys are I mean, there’s, there’s a handful of them in our town that’s kind of like, that’s their specialty. Uh, but we, we had a referral from ours and ended up being a dad of one of the kids at our school too.

So it’s, yeah, I’m, uh, we talk about relationships and commercial and I think that’s internal too when you’re potentially moving into commercial, which can be quite a shift of magnitude. You need to have the cell phone number of your key people. So your banker, your lawyer, your accountant, your insurance people. I think if you’re really considering pushing into commercial as, as a true vertical for your company, those relationships have to be rock solid. Um because these big contracts and these commercial jobs can have a lot more um room for error and you need to be able to lean into those people as experts, whether it’s a breach of contract, a payment issue.

God forbid a safety issue, um an insurance claim, whatever it is, you know, the scale is higher. And so you need to have that depth of relationship. It can’t just be. Oh, well, I’ve been at Bank of America forever and I just do transactions with them. I’m like no, like you need his cell phone number. Who is your banker? Who is your contact? Because if you can’t, you know, collect a payment and you need a line of credit or whatever it is, it has to be deep a great point. Yeah.

So the, you’re, you’re playing at a higher level, everything’s leveraged. You have more opportunity for gain, but there’s also opportunity for things to go really wrong. And even when you line up the project and, and you bid on it and you get selected, you know, having a banker, lawyer, accountant, insurance because you don’t know when or if or, or how something’s going to happen. And really any of these key categories could actually sink your company if you can’t adapt to a change in circumstance. Yeah, there’s a huge opportunity for growth in, in commercial.

Um We would not be the size company. We are without commercial. And so if you’re looking at it, you’re probably looking at it as a growth. I don’t think anyone’s looking at it just to fill work, right? People who want to get into commercial probably wanna grow. And so those are vital parts of a growing business is working alongside vendors that are gonna grow with you. And you guys do you guys mind roughly sharing where you’re at size wise. Uh We’ll wrap up this year like 22 million. OK?

You guys are almost that 250 million. It’s pretty big. Um And then you guys use so the, the employee model labor model is it, is it W-2 is a subcontractor is a hybrid, it’s primarily subcontractors. Um We do have a couple of W-2 painters but it’s, that’s more on our residential side uh commercials, all 10 99 you have any quick thoughts on the flip side of this. So we’ve been talking about how, how for you to get contracted to do this, these jobs. How do you select good subcontracting crews actually fulfill this commercial work?

So obviously subs that no commercial work is number one because it is a, it’s a different animal as far as production goes. Uh But I think there is an opportunity if you have a killer residential sub crew and you’ve got basic knowledge of commercial work that if you enter in the right way, you can transition them with you. So as you grow in your knowledge of commercial, they could also grow along with you if you really trust them and have a good relationship with them. Uh We’ve kind of done it both ways in the past.

Yeah, I love it. And then Maggie, you mentioned a revolving line of credit. Should that be something that a painting company should try to get maybe proactively before they need it? Can they get it? How, how difficult is that to secure? Yeah. Um We’ve been guilty of not having it at the right time. Um I think definitely being proactive. Our business coach has been working with us on, we haven’t needed a line of credit in years and yet he every year is like you need to increase your line of credit because your business is growing.

Um And so yeah, we’ve, we’ve stayed ahead. In fact, I just went through that process with our banker and he was so confused. He was like, why are you in? Why are you requesting to increase your line of credit? You guys haven’t used it to? Yeah, since 2019 or whatever. And I was like, well, here’s why um and we did have a very good why we brought on a new commercial estimator and we’ve got big plans for him for growth. And so again, like we said earlier, if we’re growing commercial, your costs are going up faster than the revenue coming in.

And so we wanted to be prepared to let him um fly. And so that was the reason for that. So just there’s no harm in having one. Yeah, we have to pay every time we close it. You closing fees, what, $800 or something? Not any kind of maintenance fee that you pay or you only pay if you use it. Yeah. Correct. Yeah. Yeah, it’s free. It’s, I mean, it’s basically free access to additional capital. Yeah. Yeah. Yeah, you should minus the closing fee but worth it. Um, cheap insurance.

But also you don’t want to use it to, I don’t think it’s a thing to do to purchase equipment or no, it is our safety net. Yeah, it’s when, you know, you know, you have receivables coming in that can cover what the line of credit is. That, that would be a mature way of using a line of credit. Yeah, I mean, the times that we’ve had to use it, you know, we’ve had over a million dollars in receivables and none of those were in our control to receive because it was all the contractual work with a contractor.

And so our line of credit when we used it was to make payroll and make it expensive knowing that in a month or even in weeks that that receivable is gonna come in. What kind of line of credit? Uh should a, a commercial painting company trying to be secure? Like 23,000, 100,000. Um The, the advice we were given, which I think is pretty valuable is it should equal your receivables under 90 days. So if you look at your A R separated by 30 day chunks, the total that is less than 90 days overdue because pretty much the bank is gonna look at anything 90 days overdue and assume you’re never getting it, which we know is not the case, but that’s not how the bank looks at it.

So basically anything up to 75 days or 60 days, however, you map that out, that total should be your goal for a line of credit. Now, they’re gonna look at your personal financial statements, they’re gonna look at your business um, statements reviewed professionally. They’re gonna look at, you know, a lot of things to see what you qualify for. But if you’re in Great Sandy, that would be the goal. So Matt, you mentioned not using it to buy equipment, you know, and you guys both said use it just as an emergency fund.

Would you typically, what’s your thought between buying equipment and renting equipment? How should companies be thinking about that? That probably really only involves vehicles, right? Or maybe, well, that kind of goes back and all that stuff. Yeah, the lifts, if you’re, if you’re doing taller buildings, um, I’m a, a big proponent of renting any equipment that is a cost of goods sold. Ok, then it, you’re just building it into the cost of the job. You don’t have an asset or, or liability on your books. You don’t have to worry about maintenance or like storage, storage, moving it around.

Um, and then it gets a little more complex based on your business and how you’re set up, whether you’re better off purchasing vehicles or leasing vehicles or having a, a traditional loan on your vehicles. There’s some games to play there. That’s a little more, uh, complex accounting. But, yeah, as far as any, any, like sprayers and paint booths where you gotta, you gotta just buy those. Yeah. So the standard stuff you’re gonna use it day in, day out, buy it if it’s, you know, cost of good sold.

So, ok, you guys are doing a high rise or, you know, you’re gonna need some specialized equipment for this. Well, then you’re gonna rent it for that specific project because you’re not going to, you might not use that equipment again for a little while. Ok. All right. Uh Are there any, so talk about all these different verticals? You know, a lot of it is dependent upon the G CS. We obviously learned the commercial world is extremely relationship driven. Uh And I just want to also say something else I just kind of noticed in business.

You guys tell me if I’m a little off here, it seems sort of overwhelming. So you hear this stuff like, well, yeah, Matt knows all these people. Oh my gosh, we’re like talking about all these safety. Like this is a whole, that’s ok. It’s overwhelming and you don’t know, you feel like you don’t know what you’re doing because you don’t know what you’re doing and because it is overwhelming, that’s ok. Like the first step is just enter the world and then three months, six months, a year, two years down the line, all of a sudden, you understand all the lingo, the people, the network, how it all works.

You, you have to just kind of embrace the fact that you don’t know what you’re doing, but then learn as you go. Yeah. And there’s so many more shortcuts now that I didn’t have this starting out of, of the, you know, groups like this and obviously PC A and uh there’s plenty more resources now than there was back in the day. And people are more willing to share now too. So reaching out to people maybe in a different market, but people who are going through the same thing and, and asking their advice.

A lot of, a lot of general contractors, especially the large ones also have free training programs. Um, these are not big angry bullies that just want to take your money and push you a little painting. There are G CS that are angry bullies don’t get me wrong. But there are phenomenal companies who actually want um small businesses, disadvantaged businesses to grow. Um They also get benefits from hiring small businesses and disadvantaged businesses so that as a result they offer all kinds of free training. Um Two of the companies we work with have national education programs that are all virtual.

I get the emails. It’s, you know, how to read a schedule of values, how to, you know, basic safety 101, how to submit a proposal to submit. I mean, they are like bare bones basics so that more companies that are interested in getting into commercial work can um And it doesn’t make you look bad to attend those trainings. In fact, it makes you look good doing your homework part of them. Yeah. Yeah. Acknowledge what you don’t know and just work on improving it. Yeah. The um OK. That’s super helpful.

We’ve talked about all these different verticals. Are there any verticals? I know you guys said hospitality is a bit of a different animal. So you haven’t really engaged in that as much. Sometimes with the governmental projects, it can be kind of a race to the bottom. Are there any verticals? You, you would say, hey, if you’re starting out, definitely, you probably don’t want to do this one. I don’t think there’s a, a firm answer to that. I think every company has their, their strengths and weaknesses and especially if they’ve been doing a certain type of residential work that may have given them a leg up to a different kind of commercial work than what kind of our background was. Yeah.

So figure out where your competitive edge may lie to people to play in that space. Yeah. And then the, the you guys point too about the, the uh environment being different. You know, people being more accessible than they used to be. Matt. I know you used to have to walk uphill both ways to and from school in the snow. And I know that was hard. Now, they’ve since changed the topography of the earth where if you walk uphill one way, it’s downhill when you come back and 70 degrees every day too.

It’s like uh that’s called global warming. Global warming. Yes, everything has changed. But the, the PC, a huge, huge asset, you know, it’s where we all met each other. Um We have the commercial painting forum coming up when I was just gonna make that plug. Can you tell me plug it? Yeah, November 2nd and third in Nashville PC A is hosting its annual commercial conference, uh, and rebooted. This is definitely for people that have some semblance of understanding of commercial. So if you just listen to Matt talk and 50% of the words were Spanish to you, um, it, it might, I might do a little research before you attend because you’re definitely gonna be rubbing elbows with some of the largest contractors in the country.

The content is gonna be high level commercial. But at the same time, if you’re interested in commercial and doing commercial, this is exactly what you need to be rubbing elbows with, you know, deep in. Yeah, dive in deep, deep. Um, listen to the next couple podcasts of this and Matt will say more words and you can Google them and learn them and figure it out and, um, it’s definitely gonna be the place to be if you are wanting to do commercial painting. Ok, I love it. Well, guys, do you wanna, as we wrap up this first episode?

Is there anything else you guys want to add? No, I’m excited to see where we take the conversation over the next couple of episodes. Every hopefully everybody uh stays with us and follows along. I think it’s gonna be a good conversation. I was thinking about naming this series The Magnificent Kipper, but I knew you guys wouldn’t go for it. So that’s why we changed it. The commercial couple. But guys, I appreciate having you having you guys on here, your wealth of information. You’re, you’re super um gracious in sharing it all.

Thank you so much for doing this series. See you on the next one. Thanks Brandon.

Keep growing.