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

In this episode, Daniel Honan and Brandon Pierpont break down why growing painting companies get stuck between $1.5M and $4M—and what it takes to break through. Discover how to escape the “swamp” by increasing profit margins, building a high-performing sales team, scaling marketing, creating irresistible offers, and tracking what actually drives revenue. 

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

Welcome to this podcast episode. I am Brandon Pierrepont, founder of Painter Marketing Pros. I have with me Daniel Honan, founder of Profitable Painter CPA. We’re gonna be talking about why painting companies get stuck at 43 million and how to get past 4 million in annual revenue. What’s up, Daniel? What’s going on? Doing awesome, man. I know this is, uh, you and I are both Alex Hermosi fans, kind of, kind of fangirls of him, if you will. And, uh, he, he has this concept called the swamp, which I think is very much what we’re focused on right now.

How would you, how would you define the swamp? Right, the swamp roughly 1.5 to 4. I think he said 1 to 3 and then Ryan Dice, the scalable, he, he says, he says 2 to 5. It’s somewhere in there. Basically, you’re still the general manager where you, you maybe you have a production manager, maybe a salesperson that you’re paying around six figures. And then you have your painters in the admin, but you don’t have any like. A tier People that are making multiple six figures, you’re still having to do general management for the entire company at this level.

And so you’re doing general managing everything and at the same time you have the complexity of a 5 $10 million dollar company because your business is growing pretty big. So that’s why it sucks because more complexity, it’s harder, but you’re still having to manage everything. And so that’s why it’s called the swamp and For most folks, you know, they never get to this point, but then when you get to this point, you’re like, man, this really sucks, and it’s because you don’t have those kind of key managers that are making, uh, multiple six figures that you probably won’t be able to afford until you hit around 5003+ million.

You need those big brains. Yes, sir. Yeah, so yeah, there are a few, few different, um, I mean, running business is always hard, I think we know that, but there are a few, few times when it’s hardest, starting out pretty hard. And then this, you, you kind of think you’re through the heart and then you face another heart. And so we’re, we’re gonna talk to get, how to get through the second hard today. The fundamental concept in terms of, of a lot of the marketing and the sales and kind of what has been driving you to this point.

So what’s driven you from the, the 0 to the 1.5 million. You’re generally gonna do more of it. And so a big, a big focus. Uh, you’re gonna do more of it, but your focus pivots a little bit, I would say. So, when we’re talking about 500,000, 1.5 million, we had the short-term marketing was really the main focus. Short-term marketing, um, I define as really paid ads, right, leaning into paid ads, so social media ads, um, and then Google local service ads. And then we talked about carving aside some budget for building a long-term digital asset, your digital real estate, your, your painting website SEO, essentially owning Google, carving aside some budget for that.

I would say once you get up to 1.5 million, you’re at a point now where your budget is substantial enough, that should be your primary marketing, should actually be building your long-term asset, right? Cause you’re, you’re, you’re at a point now where you, you should have enough profitability. That your sites are longer, longer, um. You know your sites are now at at right at 4 million in this episode or 10 million or wherever you’re ultimately trying to go, uh, and running more effective Facebook ads is not necessarily gonna be better at this instance than building a more effective, um, Google presence.

And so for me a, a huge focus now is what is everything that we can do to own Google so that we can move from this 1.5 to this 403 through much of that being from inbound leads. Yeah Definitely And then the um we talked about Google Business profile. Google Business profile is critical, continuing to keep up with the reviews. Here’s where I like to also entertain us a a strategy that not a lot of companies employ, but I like it a lot and so. For Google Business profile, Google very heavily favors companies that have physical offices, so the vast majority of painting companies are listed as service area businesses on Google.

So you run the business out of your home. Google doesn’t show your address, and essentially there is no office that somebody can go visit. It’s typically bigger. Painting companies only that have offices that people can actually go physically walk into, talk to receptionists, etc. uh, mostly, mostly service area business. Google, um, has, and we’ve known this for a long time, they’ve, they’ve admitted it, that companies that Have a physical office that somebody can walk into. All other things being equal are going to outperform. They’re going to outrank on Google Business profile from service area businesses pretty considerably.

And so if you’re at 1.5 million. And this has been, hey, you, you’ve run the business out of your home every year, there’s no reason for people to come into, you, you go to them, right? You go to the site, you go to their Their home and provide the estimate. Here’s where I would entertain the idea of actually opening a physical office, and you have to be very careful of how you do this. Uh, you, you can do it in a co-working space, but you have to have permanent signage.

There’s, there’s a very specific way to verify it and make sure you don’t get your Google Business profile suspended. You absolutely cannot do a PO box or something like that that will Google hammer you for that. Um, I would entertain the idea of opening a physical office. You do have to have it staffed. So the the way that Google defines a, you know, a place of business is that when that place of business is listed as open, then a prospective customer or a current customer can walk into that place of business and be greeted by somebody.

So it has that and it has permanent signage. Um, so I would entertain, hey, uh, you want to serve this area, right? This is like where your best customers are. I would look to find a small office. Maybe a few grand a month, I would chalk it up as a marketing cost. I would hire someone to, to staff that office and that would be part of my expansion plan. You want to take this to the next level? I would open a second. And a 3rd, and so I would essentially dot.

You know, depending on your population, depending on how many different service areas you serve, I would potentially open multiple offices because one of the biggest constraints of Google Business profile is it’s um vicinity. So when, when somebody searches for painter near me, painter XYZ area, they really have to be within a few miles of your Google business profile address for your Google Business profile listing to have a strong possibility of ranking. Uh, the website, on the contrary, you could live in Florida and, you know, could build out a website for, for a company in California.

You could rank for a ton of different search search terms in California. Google Business profile, you can rank faster. You can, you, you, you can. It’s different. You gotta get a bunch of reviews. There’s, there’s a different way to approach it, but a pro is that you can rank faster than, than the website would typically rank. A con is vicinity kind of capture how powerful any specific Google business profile can ever be. That’s one specific, for extreme example, one specific Google business profile in San Francisco will never show up for searches throughout all of California.

Physically impossible, right? And, and the way to kind of look at it is if, if you go to your, your, you know, Google. And you search for like a pizza shop and you see the, the Google Business profile, but it’s not gonna show you if you’re in Florida, it’s not gonna show you a pizza shop that’s 6 hours away, or if you’re in Florida, it’s not gonna show you one that’s in California. It’s gonna vicinity is a huge thing. It’s gonna show you something close. It does the same thing with painting companies and so kind of the, the next level hack is I’m gonna open a physical office so that I can rank more for my Google Business profile, get more organic traffic, get more inbound Google leads, uh, and then I’m gonna open up multiple strategically again understanding that I’m gonna have to staff them.

And that’s gonna have to be a real place with permanent signage or else Google’s, you don’t wanna do it. You don’t want to cheat the system. That would be a mistake. Yeah, I cheated the system once. I, uh, I knew you did. That’s actually the only reason I brought this up is because I knew that you knew it was like 10 years ago when I had a painting business. We Wanted to have a location closer to where we’re doing most of our work so I, I did, uh, door knocking to find somebody that would be willing to have us keep a sign in front of the yard at all times and like pay them a monthly charge but we, I didn’t at the time I didn’t, this is like 2018 or something.

Didn’t know about the uh the requirement that they have to greet people that come in and stuff like that. But anyway, pay them extra every time someone came to their door. But uh so when that comes to mind is like what if it’s like you, you pay a current business, you have a sign, but then you like rent out their storage closet or something and then they, you just tell them, hey, hey, somebody comes in for painting like. You essentially create your own co-working space within like an existing business?

Yeah, just say like, hey, I’ll rent out the storage closet or something and then I don’t know. I’m just throwing an idea out there. You could try, uh, I think, I think where you’ll run into issues is Per Google that’s only one address so it’s not like an office building where there’s suites or something, right? So like that address is already taken by another business on Google Business profile so I don’t think people try all kinds of things. I, I wouldn’t recommend that attempt. But the $2000 to $3000 that’s really like if you can acquire 1 or 2 additional jobs per month, it’s not much.

I mean one to break even, two to make it make sense consistently. People don’t think about marketing, don’t get me started on this whole thing, but people just don’t think about marketing the right way at all, right? It’s like, oh, it’s a $1.53 or $3000 expense. It’s an investment, right? If you get a couple more Google leads. You know, those are worth a lot of money. A, a Google pay per click lead right now, a typical Google pay per click lead for residential painting companies is gonna be worth over 300 $300 that you’re gonna pay for the Google pay per click lead.

So if you can start getting consistent lead flow from Google Business profile, which I would argue those leads are better than a Google pay per click lead because it’s not an advertisement, there’s more trust built into it. If you can start getting I mean, a, a few of them, right? And you turn just one of them into, into a project every single month. It’s a great project because it’s from Google. It’s typically gonna be a really good project. And then, then you get into the repeat business, right?

Do you, do you, is that client now your client for life? You get into referrals. What did you turn that project into? Cause the project shouldn’t die there, right? That, that project is a, is a new lead flow for you because they have friends and family and neighbors and network and like what, what new leads did you generate from that project? Um, and then what, what assets did you get from the project? So did you get a five star review? Did you get before and after photos?

Did you get a video testimonial of you with the homeowner outside the home? Did you get, um, some like video montages of the crew working? Like, like every, there’s, you milk this stuff, you milk the leads, you milk the project, and, and there’s so much value. In these leads and in these projects that the vast majority of painting companies are just Leaving on the ground, you know, it’s so like. The lead was good or the lead was bad. The lead closed or the lead didn’t close. End of story.

It’s like operating like a caveman or something. It’s like, you know, where, whereas there’s so much more nuance and there’s so much more value to uncover if you, if you treat. This the right way Yeah Yeah, for sure. And I think as you get those more leads, a lot of times folks at this $493 million dollar range, they’re still doing the sales at this point. Like they maybe have a production manager, they have an admin. But there’s still the salesperson. And I, I was just talking to someone a few weeks ago.

He’s slated to do, I think 483 and he is still doing all the sales, which is crazy as residential repaint. And he’s doing all the sales. And he has a production manager and admin. And he’s just like running ragged. So he’s getting a salesperson put in uh pretty soon here. But this is like a key role to get off of your plate so you can just focus on general management. And Usually when you’re looking to hire a salesperson, you kind of first have to define what type of salesperson you need.

Do you need a hunter or do you need a farmer? Depends on what type of projects you’re doing. If you’re doing residential repaint, high volume, you probably need a hunter, someone who’s going to go out and make a kill every single day by doing a lot of estimates. And if you’re doing more larger projects, multi-month projects, commercial, B473B. You might need more of a farmer because those usually have longer sales cycles where you’re not just going out and closing them on the first visit, right? You got to go network, you got to go.

You know, shake hands, kiss babies at the office and talk to multiple people, and then maybe 463 months later you get a painting job from this business or whatever, so. That’s more of a farmer salesperson. And so your comp plan for a farmer and a hunter should look very differently. For a hunter, which is residential repaint. You would want to pay very high commissions. Meaning like you’re basically paying no base salary or very low base salary and it should be the vast majority of what they get paid is through commissions and that that keeps them hungry, like going out and making that kill every single day.

Or that close and then. On the other side, you get the farmers who have a longer sales cycle. You probably need to pay them a decent base so that they don’t go hungry and they have these longer sale cycles. So typically what we say is like for a salesperson, you want to comp them around 453% of what they close as a rough number. When you look at their line item on the P&L, your salespeople should be around 443% of what they’re closing or 433% of revenue. Um, but you don’t want to pay straight commission because you want to tie a portion, at least a portion of their commission to gross profit.

Because in order to afford all this marketing we’re talking about, you need to have a very strong margin. Um, you know, for residential repaint, we said 423% is kind of the minimum. And then we should be building that, that gross profit up and, and increasing it, especially in this stage to allow you to get to the next stage. Which we’ll talk about, but getting that gross profit to not just 413% gross profit, the 403% and 2130%. But the way you can do that is align your compensation of your production manager and your salesperson.

Should be tied into gross profit. So for example, you, you could pay your salesperson 21200% of commission, 21000% commission on whatever they close immediately after they close it, they get 2130% commission and then you wait till the job is done, do the job costing. If the job comes. You know, at, at the target gross profit, maybe you’re targeting. 218% or 211.5%, 214, 212% you can give them additional bonuses based off of how the job came in. So for example, maybe it’s 214% commission initially, but then if they hit 2110, 55, 57, they get 123 additional uh commission percentages on top of that so they can get a total of 6.5% overall if they hit the highest tier of gross profit.

So getting that comp plan in place for your salesperson, for your production manager and making sure that it’s tied into gross profit. So everyone’s moving in the same direction, basically wanting to have higher gross profit because that’s really what you’re going to need to get out of this swamp, as we’re calling it, this 1.5 to 4 million. You’ve got to create that additional margin. And you’re really Next question might be, what is that margin supposed to look like? If you have a salesperson. A production manager and admin and you’re just doing the general management role where you’re managing all the pieces.

I’d really like to see you at an absolute bare minimum, 43%, but ideally closer to 30%. And maybe you’re not there right away, like at 1.5 million, you might be at 20%, but then build towards 30% again by increasing gross profit. Maybe you need to increase prices, become more efficient. Uh, so you have a good GP to CAC ratio, which we talked about, we’ll talk about more here later. But continue to build gross profit. 50% is not the finish line. It’s the starting line. Build to we, we work with folks that have 60, 65% gross profit margins.

So price is the single biggest lever you can pull, and I really like your focus on. I mean, incentivizing. The team To move in the right direction. Right, like a, like with salespeople, if they’re. If they’re doing very well that financially that that should, it should go without saying that the company is doing very well financially those two things should be inextricably linked and I think the more you can, you can um migrate roles that are clearly. Performance based to performance based compensation such as you know sales obviously some people perform really well some people perform less well if you’re in sales it’s super vital to the success of the business that you perform closer to that very well end of the spectrum and you should be rewarded accordingly and and very.

Very rarely do I actually see much in the way of commission structure with painting companies. It’s, it’s almost always just paying people salary, salary or straight commission, which kinda. You might be shooting yourself in the foot if you commission just a straight. What’s that making them too desperate to close some of those deals and not focused on the profitability of the projects as well. Yeah, and then they might just discount to get the deal closed and then you’re then you’re. You’re selling a lot of jobs maybe, but then they’re not profitable.

So you got to structure the pay to accomplish what you want to accomplish. But once you have that expanded capacity with sales, getting that sales person in who can focus exclusively on sales, that’s going to free you up so you can focus on growing the business more. Maybe you’re at 1.5 to 2 million at this point. Once you get an expanded sales capacity with someone dedicated, then you can start focusing on marketing again to grow it to the next level. Yeah, and so you, so you, you have the team, you’re, you know, you’re investing into the SEO if, if ideally you’ve hired an agency, we, we do it, um, or you’ve spent years learning it yourself, that’s what I did.

Um, so you’re investing into the, into the long-term digital footprint of your business. And then you can, you can go back into um focusing more heavily again on the short term marketing, right? Because now you have increased budget. And so whereas before in the, the 203 to 1.5 million range, maybe you were running up, you know, 2, 30 a month, let’s say on meta ads. Now 1.5 to 4, maybe you’re looking at 6000, 8000, 10,000. These numbers are not crazy. When you actually math it out, they’re They’re actually not a very aggressive numbers. Just most painting company owners are used to spending nothing on marketing in a structured way, right?

And so when you’re running, um, a little bit bigger budgets on your paid ads, this is where knowing your numbers is really important because you have to know by channel what you’re spending, what your ROI is, how many leads you’re getting by channel. Uh, you have to make sure you’re not burning budget, so you have to be doing those weekly, weekly and monthly snapshots, um, of your, of where your marketing is going and how the, how those, uh, basically what your conversion looks like. Uh, but then also you repeat referral and you gotta kinda track those leads through, right, because you also could be, could and should be getting repeat referral leads.

Um, so we’re doing the, the social media ads, um, uh, we like meta, so Facebook and Instagram, we, we find that that performs the best on social media, uh, for residential repaint for sure. Uh, you’re doing your Google local service ads at this point, if you’ve If you’ve set your budget to, I would say a ridiculous amount, we had a, like a painting company owner who had said it’s like a million dollars a month or a week or something. Like he’s not gonna get a million dollars of Google Local Service ads, but his lead flow went up.

And so Google, you can, you can kind of game the algorithm a little bit. So people set maybe $303 a week that they’re willing to spend on the Google Local Service ads and maybe they’re only spending $300 a week and so they think, well, It doesn’t make sense to increase it. I’m not even hitting my ceiling. If you take that 500 and you say switch it to 4000 a week or 6000 a week, uh, you’ll probably get more leads. Now all of a sudden rather than spending 300, you’ll probably spend 500, which is good.

You want to spend more money on Google local service ads as long as you can attend to the leads. Uh, so you’re, you’re ramping up your Google local service ad, and then here’s where you can also. Entertain the idea of of Google Pay per click ads and so. For to run a Google Pay per click ad, this is the traditional Google advertising. We highly recommend at Payter Morgan Pros that you have at least a $3500 a month ad budget. These leads are typically gonna run at least 200, sometimes quite a bit more than that dollars per lead.

And so if people wanna wanna run Google Pay per click ads and they wanna use $500 or $2003 it doesn’t make any sense. So this is why we don’t recommend, uh, running them until you’re, you’re at around $1.5 million and up in revenue. Then you can entertain Google Pay per click ads. You can also entertain Paper lead sites at this point, because you should have a strong enough Sales process and you should have been running. Social media ads and be used to a colder lead and, and how to get in front of that lead and communicate with them quickly and build value before the estimate and deliver the estimate within a few days, not say I can get out there in 2 weeks, that lead is long gone.

And actually deliver the proposal in the home, not, not just churn and burn and we’ll email it to you at some point, hopefully, maybe, probably not. You, you’ll definitely say no. Like sit down, actually objection handle and have a structured sales process. So you’re doing all these things, and when you’re doing those things well enough, you can then try your hand, um, At Angie and Thumbtack and decide if you want that to become a core channel of yours, because it’s no longer this, this easy button, this trap of, hey, it’s a new company, you don’t know where to get leads, go ahead and buy them here and then we’ll just Kind of curb stop you and you’ll wonder why you’re having to fight to the death on price and barely subside, you know, subsist on it because you, you don’t approach them from a position of strength, but now you can approach it from a position of strength.

So you can, you can think about adding that as a channel, um, if it’s something you want to do. Yeah, I’ve Just reminds me of this painting business. They’re, they’re, you tell a lot of story. I really like that about you. You like that about me? Yeah, I’m glad you like it’s it it just makes the episode so interesting when you tell these stories. Thanks for doing that. Uh, yeah, I’m glad you like it. So really young painting business, they were just solely relying on Thumbtack and their, their average job size is like $2000 and gross profit was under $1000 and they’re spending.

200 to $300 to get $600. Yeah. So yeah, don’t do that but uh I think I agree with you at it when you when you have a strong sales process. One of the things I see that happens is when you get that new salesperson in. And you’re no longer doing the sales and it allows you to focus on the marketing, but then don’t actually forget about the sales process. What I see is like, oh I got the salesperson, so now I’ve got that handled, you know, wipe my hands clean of that.

But now the salesperson is like doing all the mistakes you did when you first did sales like they’re not following the script or if there is a script. Hopefully there’s a script document what you’re building as you come up before you hand it off, right? They’re not handling objections. There’s, they’re not, there’s no training on a at least a weekly but maybe even daily basis. You’re not doing that with them or reviewing their past calls. Like there’s some software now where you can they can just basically.

Record their all their in-home call consultations and then you can review the scripts or even tie it into AI to see to flag certain things or they do you know adhering to the script and that sort of thing but yeah not forgetting about even though you just handed off the sales person or the sales piece to a salesperson, not forgetting that you gotta still check in with it, still manage it. Yeah, and then another, another piece with that too is when you were doing the sales. There are probably things that you’ve done along the way, the sweat equity stuff that we referred to previously, so some of the, the networking, um, Some of the, the door knocking and what we find when companies will come to painter marketing pros is they, they grew through this way, now they’ve graduated.

Because they’ve gotten to this certain point, so now they just want to go, now we’re, we’re gonna stop doing all that because we don’t have to do that anymore because we’re at 1.5 million. And so we’re just gonna do this. Don’t stop what worked before. And, and at this point, you as the owner shouldn’t be out there door knocking unless you’re training, you’re working on the SOP, you’re doing things like that, then you’re working on the system. But you should not generally be out there knocking doors at 1.5 million to get residential repaint projects because your time is more valuable than that at this point.

However, if that worked really well, You should have a system, you should have a team, and, and that should be a channel that, that you now call paid-free, right? You’re now running it, continuing to run it, but you’ve, you’ve sort of delegated it to other people in your team. You don’t just grow through a channel and then let go of it. Even BNI Chamber of Commerce, maybe you attended those meetings, now you’re not in sales anymore, you can still attend them or you can send your salesperson to them, but you don’t just, Not do them anymore because oh now we’re now we’ve turned on ads so you do all the channels and then build new ones on top right add add the new don’t don’t replace yeah that’s the thing that I have to remind myself all the time but I see it a lot with.

Painting businesses when they’re looking, OK, we need more leads. OK, what have you done that’s worked in the past? That’s like my first question. What have you done that’s worked in the past? And then they list all the things and like OK are you doing that? No, we kind of stopped or like we do it once a year for customer reactivation. OK, maybe go back to doing it quarterly like you were doing it before just like it’s kind of common sense but you know I know I just kind of forget about it like we were doing something that was working and then you get all these leads and then you kind of just like trail off and don’t do it as much anymore like do what’s worked in the past yeah and as you’re doing as you’re doing this stuff.

The, you know, whether you’re, whether you’re not paying people to do stuff that you as the owner used to do, can kind of change the economics of it a little bit, right? Cause now you have to factor in the team. If you’re, let’s, let’s say you’re canvassing, let’s say you’re door knocking, you’re probably gonna have a lead, um, canvasser and then team under them and you have to factor in the cost of that now. It’s no longer free, never was free, but it was sweat equity. Now, now it’s money.

Um, You’re, let’s say you start running Google Pay per click ads or you start running, you know, you scale up your Facebook ads, you have to track these channels. You have to track their finances, and I think that’s a, that’s a big piece too. It’s a big common mistake we see is like we’re spending this amount of marketing on marketing, uh, OK, where, where are the leads coming from? Well, we think they’re coming from Google. Well, how do you know that? Well, they said Google. And so there’s, there’s not actually effective tracking that there’s not effective, um, they don’t know how much necessarily is being spent per channel.

They don’t know how much revenue is being generated per channel. And I think that at 0003 million going to 4, you’re now running a, not to be offensive before that, but you’re running a real company. It’s not, it’s not a hustle. It’s not just you as the owner. Now you need to start having all these numbers dialed in, right? Yeah, for sure. You know GP to CAC gross profit to customer acquisition cost ratio is a big thing that I like to look at overall for sure, starting out. But then as you get to this level, start looking at it by channel like you were saying.

Because a lot of the times when folks come to us they’re spending money on meta oftentimes and they’re not sure if it’s actually making sense financially and if you track the gross profit to customer acquisition costs for that channel you’ll know your answer so. Basically, uh, I know you work with painter marketing pros, you get a dashboard, you can see your cost per lead. And then from there you could maybe it’s like $60 a lead or whatever and maybe your set rate is 50% so you have to pay $120 to get an estimate on Facebook and then maybe you’re closing one out of three of those so your close rate is like 33% which you might think oh that’s super low 33% close rate not for outbound that’s that’s pretty standard for outbound so.

If you’re gonna pay $100 120 dollars per estimate and you close one out of three, that means you’re spending $360 to close a deal on Facebook and so some people, oh that’s a lot. Well, it depends what are you getting in terms of profitability from that from a typical Facebook lead. So if you have a really good gross profit and average job size, let’s say. Let’s take an extreme. Let’s say you’re You $303,000 average job size and you have a 60% gross profit that’s $6000 of gross profit compared to you spent $360 for the lead and you know a few $100 for the for the salesperson that’s a pretty good deal.

Maybe you have like a 5 to 1 GP to CAC ratio there. Now, if your average job size is like $2000 and your gross profit is 50%. It’s a, so now you have $83 of gross profit. Right, exactly. That doesn’t really work. So you have to either qualify the lead better, maybe improve the sales process, increase your prices, who knows, or maybe it’s just your set rate is just you’re not getting doing the speed to lead, like doing the basics for outbound marketing speed to lead. So many things to look out there, uh, but you, you, you won’t know to look unless you’re looking at.

The performance by channel, your GP to CAC ratio by channel and and digging into those details to see where, what needs to be improved. Is it, do we need to improve the set rate? Do we need to Maybe improve our sales process because we raised our prices. Maybe we need to go to Jason Phillips sales boot camp to improve the sales process. Maybe we need to just raise prices. Maybe we have a good offer, people are accepting it, but we just don’t have a high enough gross profit.

So many things to look at, but you’re, you got to dig into the details for, for each channel at this level like you’re saying track those metrics and get some loose attribution like attribution is kind of hard sometimes but like get some loose attribution as to where the leads are coming from and and how much you’re spending on them. Yeah, and I think the. So much of this ties back to the sales process and it’s so neglected in the industry as a whole. You had mentioned in a, in a previous episode this idea that a lot of painting company owners act as order takers, so you kind of go and, and what is the estimate consist of?

You take your measurements and you put together your proposal and then you probably email it over later and then it’s, it’s such a passive. Approach it’s like did did the lead schedule the estimate or not but very rarely are we looking at well how quickly were we calling them? What was our communication like did we follow up, you know, a couple times a day for the first couple of days were we following up for several weeks making sure that we chase that lead if we needed to um then when you, when you go out and you conduct the estimate, OK, that’s, that’s just.

Like permission to play. It’s literally just you have the number. Congratulations, you have the num here’s the number. That’s not the sale. That’s literally just the fundamental like this is what it is and what it costs you. The sales process is, is why should they value you. Right? What, what, how, how are you gonna treat their home while you’re in there? What kind of warranty do you have? What kind of products do you have? What do you, what are the little things that they’re telling you that they’re showing you that they care about?

Um, do they have kids in the home, right? Is there some, can you, can you weave into, into how this is gonna be a hassle-free process for them? You’re gonna clean up at the end of the day when they have family dinner when, right, this, they’re not gonna even know you guys are, are in there if you’re doing interior painting, it’s not gonna be a complete. Um, train wreck for their home for like a week, right? And, and you’re not gonna mess up their nap times, you’re gonna work around, they have a baby.

So you’re doing a full interior repaint, so you have a baby, hey, we, you know, we’re we’re accustomed to working with, with, uh, families with young children. And so we will, before we start, you know, if you decide to move forward with us, we’re gonna wanna make sure we’re we’re clearing your nap time, make sure we work around that for you to cause minimum disruption for your family. Wow, you’re the only contractor who actually brought that up. That I am now, I trust you more. I feel like you’re gonna make my life less hellish during this process.

And if you care about my family, about my baby’s nap schedule, I also automatically instinctively think you care more just about me in general. And about the project in general, right? And so all of a sudden this, this, there, there’s so much more within our control than we think and, and these people on Facebook, um, even people on Angie, although a lot of people actually do go directly to Angie or Thumbtack, it is a little bit of a different breed, but the people on Facebook are the same people on Google.

You know, do you, do you use Facebook and Google? I use them both. I don’t think we’re the two only people in the world. I don’t think that’s unusual that we both use Facebook and Google, right? And so Google, you’re capturing somebody at a certain point in time when they’re investing their time, they’re looking for you. It’s, you know, intent-based advertising or intent-based search, and they’re looking for you and so they’re, they’re hotter because they’re investing their time and therefore they’re probably a pretty serious prospect. That same person.

Also could have come across you on Facebook and they might be Googling at the same time too. You might be running a retargeting ad. That’s actually how they found, found you on Facebook, right? Um. Or they weren’t actively looking yet. So they’re a colder lead, but they’re the same person. They’re, they have the same value home. It’s the same size painting project, except guess what? They’re not. So actively aggressively trying to complete this project yet, but the project’s there for you to sell to them if you have a dialed in sales process.

So I think it’s so passive, it’s like Facebook leads are bad, Facebook leads are good, Angie leads are bad, Angie leads are good. Maybe you were bad or you were good at, at your, your business because other companies can do it right from, from what we’ve seen is there’s two main levers to. Increasing your price, because usually that’s what needs to happen at this level, 1.5 to 4 million, is you probably need to increase your prices. Yeah, you probably need to increase your price. And there’s two main levers to do that.

One of which you just talked about, which is your sales process, improving your sales process. So that’s in home, you’re following up, you’re handling objections, it’s scripted. The other big lever is offer. So what are you actually offering? So what I see at this level is that a lot of folks have the standard professional painting business offer. Which is good to differentiate yourself from Chuck on the truck. So for example, on your website, you go to a typical professional painting business website, we have a 5 year warranty.

Charge estimate, yeah, yeah. A 5 year warranty, they background check all of their. Their workers, they, they use premium products from Benjamin Moore, Sherwin Williams. You know, maybe they’re licensed if if they’re in one of those licensing states or whatever they have a general liability and workers’ comp insurance. Those are the, those are great to have obviously you need to have all those things. But if that’s your offer, like, hey. We have all this stuff plus it’s this much money to pay and you know we’ll do 2 coats.

That’s uh you you’ve been commoditized again because the the painting industry is getting more and more professionalized so they’re likely your homeowner is gonna likely get two more estimates from other professional painting businesses and they’re gonna have a very similar offer so now you’re stuck with OK my offer is the same hopefully you have a strong sales process that might be able to differentiate you but another way you could do that is by improving the offer. So that you can further differentiate yourself and allow you to charge higher prices.

So Something like a risk reversal guarantee. Like an on time on budget guarantee, something like, hey. This price that we’re that I’m showing you here today, this isn’t an estimate, it’s an accurate proposal. So we’re not going to come back and ask you for more money with the same scope. Additionally, we anticipate this project’s going to take no longer than 2 weeks for us to finish. So if it takes longer than 2 weeks or if we come back to you for more money. With the same scope, you get a 10% refund on the overall price here.

So adding in like a risk reversal guarantee could be a way to differentiate yourself from those other professional painting businesses because you’re already differentiated probably at this point from Chuck on the truck. Now you got to kind of layer on another level of professionalization to further differentiate yourself so that you have more price control. You can start raising prices and start striving for that. 55%, 1.53, 65% gross profit. I’m gonna throw out something crazy here. Yeah, I know. It’s controversial too. I didn’t, I didn’t, uh, create this concept. Nick May did.

Nick May is a smart guy. Um, free interior touch-ups for life. It’s scary, right? Freak. That’s the stupidest. So that this has come up online and I get so much hate and it, it just look at some of the hate on, on these videos. Look at the YouTube comments, those are your competitors and they’re not, they’re not crushing, right? So when you see people immediately hate on ideas like this, that, that should give you, that should show you what’s possible in this space. So every lead that you, that you get pretty much you’re gonna, you’re typically gonna pay for, right?

Sometimes you get repeat referral, but if you’re doing structured referral, Um, I would, I would advocate for doing that in a structured manner, not a passive manner, and therefore there’s maybe, let’s say a, a $250 Amazon gift card going to the person that referred, and then, you know, 10% off to the referee, and you can kind of start to grease the wheels and make, make referrals become a lot more, um, commonplace, right? And and start to actually control that a little bit through campaigns, but then you’re paying for it.

Facebook ad obviously you’re paying for it. A Google lead. You, you’re paying for it in some way, you know, through the work that you’re doing with the website and the SEO and eventually, you’re not paying specifically for that lead. But through the time and and the money that you’re investing into the process, you are, you’re paying for it. It’s just being um was amortized kind of throughout all, all, all the leads. And so, you pay for leads, that’s just a fact. You do something like a free interior touch up for life, you super unique offer, none of the other, no trucks in there offering that.

You, you cap it, here’s the, the part that makes it work. You cap it, it’s like up to 1 hour, right? Or up to 2 hours, one time a year, we’ll come out and we’ll do touch-ups. Touch-ups include, can include these kinds of things, right? And then every single year, you know, have a reason to reach back out to that homeowner. In a way to serve the homeowner. So you’re now reaching out to the homeowner and saying, hey, hey, Mr. and Mrs. whatever, homeowner, we served your paint, you know, we, we completed your full interior repaint a year ago, uh, you, you, you now You know, you purchase, you can make it an upsell as well, which is huge because then you can increase your profit margin right there.

You, you purchased, um, the, our extreme package, whatever, including, it actually includes full interior touch-ups for life. Your, yours has come due. Uh, we want to know if there are any scuffs or scratches or anything. We’ll, we’ll send someone out there completely free of charge and take care of that for you. Is there a time in the next couple of weeks we can come out, maybe knock that out for you? Right now you’re in the home again, and while you’re doing that, You don’t think that maybe there’s, there’s an opportunity to resell them, right?

You’re in their home every single year. You don’t think that at some point they’re gonna, they’re gonna need the exterior painted. You don’t think that now that you’ve touched up this wall and they’ve kind of capped that at your touch-ups, you don’t think they’re like, man, you know that other room, this room looks so good. Now I’m starting to, starting to bother me how that, how the other half of the house looks, right? So it’s just naturally, and now all of a sudden you start to, you basically own that house.

You are their painter. That every 3 years or wherever they get a painting project it’s you and guess what, whenever they’re asked, you know, hey, do you know anyone who needs a painting company, right, you ask, hey, do you know anyone who needs a painting company and complete the project, try to get the referral? No, not right now. Well, if they don’t know it now and in 1 year they’ll probably know somebody. In 2 years they’ll probably know somebody. In 3 years. So now you own the house and you own the referral and like it just becomes this massive catalyst.

You’ve increased that the lifetime gross profit of that massively and you can through a unique offer, right, upsells and then also get more collateral for like a video testimonial or whatever. Like, hey, we’re here fulfilling on our free interior touch-ups for life. So people now don’t think that’s an offer too good to be true. I don’t believe that. Well, now you’re getting some video footage out there. Hey, we’re with Ms. Smith. We painted her home 43 years ago. We’re back out here touching it up again. If you guys want to get your, your full interior repainted and, and have us being out here every single year free of charge for you to touch it up, make it look brand new, go ahead and click that link below.

How does that look as an ad? Sick, right? But watch the people who comment. Those are your competitors and go beat them. Watch the people who, who say all the reasons this won’t work. Yeah. So improving your offer, improving your gross profit, that’s going to allow you to do some further testing of other marketing channels like you have some of those offline channels which, you know, sometimes when I hear like, I’m gonna, I’m gonna get a billboard, like occasionally I’ll hear that and like I’m always my eyebrow kind of raises.

Uh, a little bit, but what are some, but not everybody looks like you. So some people would be all right on a billboard. That’s true. Touche But what are some offline channels maybe we can start testing in this 1.5 to $4 million dollar range here? Yeah, um, print ads and direct mail, those are the ones that I would entertain right now. So, you know, home magazine, if, if there’s certain kinds of magazines you wanna test out the, you, you have, when, when you start moving into some of this offline stuff, I mean, in marketing in general, but especially when you move into the offline stuff, you have to be willing.

To have a bit of a testing budget. So a big mistake we’ll see is, is painting companies will try it once. They’ll send out one direct mail blast, um, always have at least 10,230 homes that it’s sent to. That’s a bare minimum for direct mail. Uh, I advocate for doing it once every 2200 weeks, um, is a really good cadence, and I would commit to it for at least probably 2000 mailings. So it’s not a, um, it’s not a soft commitment, and then they, they might, they might send out one.

Direct mail blast to 230 homes or maybe they even do it to the 28,21.5 homes and it doesn’t provide the return they want, uh, and so they, they don’t do direct mail anymore or they send it out but they didn’t actually include a specific tracking number or tracking link so they can’t even attribute all that they don’t even know necessarily what came from direct mail and what didn’t, um, so they can’t even fully measure the return on investment of their of their ad or they send it out and.

Uh, we see, we see typically it’s like a 23-week runway primarily with most of the, the leads that you’re gonna get. Sometimes a random stray one will come in 22 years later, but most of the leads are gonna be 24 weeks, usually about 210% per week. So it’s about a 4-week, um, period of time that you’re gonna be getting those leads trickling in from that. Uh, if you’re, you might have to try various magazines, you know, various, various different publications if you’re doing print ads, um. I wouldn’t do a billboard yet.

One of, one of the things that I think it is a mistake is painting companies at this point start to think that they need to be the next Nike. They’re like the Nike of the painting industry, or they’re the Rolex, and they need to do a lot of branding. I disagree. I don’t think anybody. Gives a crap about your painting company. I don’t think anybody gives a crap about your painting company at this point. You having the billboard or the radio ad before branding. I, I, it’s, it’s this ambiguous thing.

It, it, you know, when, when you watch the Super Bowl and Coke has all their commercials on the Super Bowl, that’s branding, right? It’s keeping all of us know what Coca-Cola is, it’s keeping us top of mind. It’s something different. You really do need to be in terms of your marketing, more transactional. Oriented, um, uh, between the 1.5 and the $4 million dollar mark where you do the branding is how you treat the lead and how you treat the customer and the, the idea of the free interior touches the relational selling and just actually having a relationship with your client list and build it, that’s where you do your branding.

You don’t do the branding, run a radio ad because you’re gonna do branding because you’re the Nike of the painting industry. It doesn’t work. It, it’s just a great way to waste money. And when we see these fractional CMOs that maybe have worked with some Fortune 500 companies come in and, and they, they start working with painting, we hear a lot about stuff like that. It’s stupid. Now ask me how I really feel about it. How, how do you really feel about it? I don’t think it’s that great, yeah.

Yeah, I, I, I definitely see it a lot with billboards comes up, uh. Also magazines. It’s a little hard to track like the attribution there unless they have a QR code, but oftentimes they don’t. Yeah, I mean you, you definitely are gonna want like a specific trackable number, right, like a phone number that would go into that magazine. There’s Call rail. We use a, a software called What converts. You can have a specific QR code that that goes to a specific landing page that that everything needs to be tied to that campaign.

There’s a software called QR code Tiger. That’s what we use to track QR codes. Like being really deliberate about it, you can’t just like can’t just be your general sales number. Yeah, we can’t just like run an ad in a in a newspaper and just have a good your your website just no and then and and the idea that a lot of painting companies want to solve it by asking the, the lead, where did you hear about us, you know, they might have it on the form and or they might ask it over the phone when you actually compare what.

The lead tells you to what has been tracked. It’s like a 40% of it is just completely wrong. Yeah, I mean, I’m just reflect on when I get asked that. I’m just like whatever, just do something really quick like I’m not it’s like your friend really reflecting, hm, how did I hear about you? You’re just some people will say their friend, um, because they think that you’re gonna treat them better like, oh, he’s a referral. Like let’s, let’s make sure he’s really special. So they’ll lie and say, oh my friend referred me to you.

Uh, and then other people say Google when they didn’t come from Google, and I’m pretty sure they say that for what you’re saying like they just don’t know and they either don’t care or maybe they don’t want to look stupid and Google’s always just an answer that makes sense. So I found you on Google. Yeah. And plus at this level from 1.5 to 43, you have probably a lot of different marketing campaigns going on and The longer that list gets, the less likely you’ll get good data out of that question.

So At this point, you know, what, what should a painting business owner in this range, what should they be making? You’re doing $1.5 million to $4 million in revenue. You should typically be taking about the bare minimum 20% cash flow value as the owner, and this is net profit plus officer salary. But you should really be working towards 30% and through the ways we discussed, which is getting that gross profit, having a healthy gross profit to customer acquisition cost ratio. Because in order to really get out of the swamp, you need to start putting in.

A player managers to be a manager of marketing, manager of sales, manager of operations, a controller. Because right now you’re managing everything and these managers probably need to get paid like 200,000+ a year and they’re yeah but they’re gonna they’re gonna they’re gonna really make your life like a lot better uh and The thing is You need to have the margin to support it. So trying to work towards that 30% margin so you have room to bring on those 8 players. And it all goes back to improving that gross profit and the GP to CAC ratio.

And usually at this stage as well, you have, you have to start doing tax planning for sure if you haven’t started already. Tax planning is basically Thinking about how much you’re going to be paying in tax and actually doing something about it. You’re not just worried about filing the forms at the end of the year, but actually proactively doing tax planning each quarter because at this point, your biggest cost is probably taxes. At this point So you should spend a little bit of time to see what you can do to lower that tax liability as close to zero as legally possible.

So getting with a good accountant that can walk you through some different strategies, do some projections, and keeping tabs on that so that you’re not blindsided by taxes, you’re not just horrendously overpaying in taxes. So that would be the other move that you can make to Make this whole process of getting from 1.5 million to 4 million in revenue. We have, um, we have notes on this as well in the description. Go ahead and click that link to download notes, ton of good stuff here that we’ve outlined for you guys.

I wanna bring up one thing. To that I that I forgot to mention I think is relevant so we talked about different offers, you know, how do you raise the prices and I think uh I think another misconception is that someone becomes your customer after they’ve signed your proposal and have agreed to work with you and I think there’s a. There’s a way to look at this differently where they become your customer as soon as they’ve given you their information. And so especially when you’re running ads.

And they’ve They’ve paid you like with their phone number and their email and right and and the fact that they’ve set an estimate they’ve paid you and so I think you can if you even showed up and you offered uh what looks like apples to apples to other people but you’ve been serving at a super high level in terms of your communication in terms of maybe a what to expect video uh in terms of a call an hour before the the the estimate whatever and then you’re there like 2 minutes early um maybe a couple of videos along the way that that kind of talked about.

What to expect or what to ask painting company or helpful stuff, not just about your company, some about your company, but some about them. You are already head and shoulders above the other guys that are coming in and selling against you. So, something I wanted to know, also, if you are The finances are really important, taxes, the, the legalized required theft. Um, that the government imposes upon all of us. I love referring people to Profitable Painter CPA. I don’t, you don’t, so you can pay extra. We, we clarified this last time.

If you, if you do join Profitable Painter CPA and you dislike Daniel as much as I do, you can pay extra and never have to talk to him. So I just, a lot of people are turned off just because of the way he looks. I get that. But you can pay extra, you can work with his company, they’re great and never have to talk to him. So just food for thought. Um, I appreciate that. Yeah, yeah, I just, I did, I, I see people’s businesses being hurt because they don’t want to be near you and I don’t want that to happen anymore.

So. Uh, I kid, I kid, but yeah, this was great, this was great, dude. Yeah, this is awesome. Thanks, man. Yeah, and if, if you wanna get the notes like Brandon said, click below below in the link description, and in the next video we’re gonna talk about scaling your business from 4 million to 10 million, so that’ll be a cool discussion. See you next time.

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