Two Gigantic Holes In Your Painting Profits Bucket & The Enormous Cost of Letting It Leak!

Many Painting Contractors Aren’t Even Aware of the “Major Holes” In Their Painting Profits Bucket – Most Spend All Their Time “Plugging” the Tiniest Leaks and Ignoring the Largest “Cash Killers” of All!

Many Painting Contractors Aren’t Even Aware of the “Major Holes” In Their Painting Profits Bucket – Most Spend All Their Time “Plugging” the Tiniest Leaks and Ignoring the Largest “Cash Killers” of All!

Have you ever made an AMAZING discovery before in your life? Have you “accidentally” learned…

  *A way to do something much faster and easier that saves tons of time and money?

  *That you had made a very painful mistake that could have easily been prevented?

  *About a business or product that was high-quality, a terrific value, and delivered far more than you ever expected?

Let me ask you this: What did you do once you made this discovery? If you’re like me, I’ll bet you told everyone you knew about it!

You wanted your friends, family, and acquaintances to share in the benefits you received because of your decision – or to avoid the pain and expense you endured because of your mistake.

When someone “took you up” on your recommendations and were amazed at your discovery, how did you feel? Probably extremely excited and gratified. You felt like you had done your “good deed for the day” so to speak.

Now, let me ask you this: How did you feel when they ignored your advice and had a bad experience? How did you feel when they disregarded your warnings and it cost them dearly? Maybe this “mistake” even harmed them for several years or negatively change their lives forever.

This is a tough thing to watch happen – especially when dear friends and loved ones are involved. It’s even tougher when the same preventable mistakes are made over and over again. However, we’ve ALL experienced this before and probably will again.

I love what I do at the APPC, our members see tremendous results when they implement our programs and it’s rewarding. However, I speak with non-APPC painters daily who struggle for years unnecessarily or fail to reach their maximum potential and it frustrates me greatly.

Even our own APPC members (dare I admit this publicly?) will occasionally stop short in a marketing campaign, leaving critical steps out or ignoring specific instructions regarding best practices altogether. Results suffer because if it.

As the Greeks famously said, “All true wisdom is gained through suffering.”
But, there is often a much better way… an easier way that is ignored.


It is as if a painter, dying of thirst, will not lift up his hand to drink from a fountain right in front of him because the effort and expense simply “costs too much.” “Death,” seems a better alternative…

Costs, costs, costs… It’s something I hear about often and it puzzles me. However, given the limited marketing experience in our industry, I should be much more understanding about this.

So, before we look at the two holes in your painting profits bucket, let’s take a hard look at two different kinds of cost. This concept is essential to understand before we move forward.

Grasping this concept could change the way you look at “investing” in your business forever.

Hard Cost vs. Opportunity Cost

Most painters, and most people in fact, focus all their time and energy worrying about and managing the “hard costs” of life. A hard cost is the obvious, plainly-visible expense of doing something. If a contractor uses a quart of paint and two labor hours to paint a door, the hard cost might be $41.00. That’s easy to see and calculate.

Opportunity costs, however, are a little less obvious and requires a “reconditioning” of the mind to calculate.

An opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.

Let’s look at the “Two Biggest Holes” that are in most painting contractors’ profitability bucket through the context of hard costs and opportunity costs. Thinking this way will alter your outlook…

BIG HOLE #1: Customer Retention

I talk to 3-4 painting contractors each day and they fall into one of two distinctive camps:

Camp #1We don’t even have our past customers or leads in a database where we can communicate with them at all.

Camp #2We have our customers in a database, but we don’t do anything with them. On rare occasion, I’ll talk to a painter who sends out a Christmas card once a year. This is W-E-A-K…

If you are in camp #1, it will probably take you a about $350.00 in clerical labor to solve this problem once you collect all your “source documents” in digital and paper forms.

It costs, on average, about $12.00 per year to stay in touch with a past painting customer using a mailed and emailed newsletter. Past customers are worth, on average, about $250.00 to $350.00 in gross profits each year.

Additionally, if a customer refers you to another customer once every five years, which is very conservative, they are worth an additional $60.00 per year in referral profits.

Example #1: 350 Neglected Past Customers

Annual Customer Retention Hard Costs:
One-Time Data Entry Cost $350
Annual Newsletter Cost $4,200
Total Hard Cost: $4,500

Annual Opportunity Costs:
350 Past Customers x $300.00 Gross Profits = $105,000.00 in Missed Annual Gross Profits
350 Past Customers x $60.00 Referral Profits = $21,000.00 in Missed Annual Referral Profits
Less Total Cost of Marketing Hard Costs $4,500

Total Opportunity Cost: $121,500.00

Let me ask you this: Would you invest $4,500.00 to make $121,500.00 in profits?

That’s the difference in “hard costs” and “opportunity costs.”

BIG HOLE #2: Weak, No-Prepositioning,
Inconsistently Presented, Emailed,
No Post-Positioning, No Follow-Up, Estimating Process

I do not have room enough here to properly explain how poorly most painting contractors present their service offerings to potential customers – even the “successful” ones. Painters complain about “price sensitivity,” yet they do nothing to distinguish themselves from the competition or build value.

It is YOUR JOB to thoroughly demonstrate, through a detailed process, why you are better than the “typical painting contractor” in your area. It is NOT the customer’s job to “guess” why they should pay more for what appears to be the same level of service and professionalism based upon almost identical estimating experiences.

With that said, improving your estimate process, once you know what to do, is NOT expensive. Let’s look at the true costs…

Example #2: 300 Estimates Per Year at $28% Closing Rates,
$3,200 average ticket, $27% Margins = $72,576 In Annual Profits

Annual Estimate Improvement Hard Costs
Initial Printing of Collateral $350
Initial Set Up of Vehicle $175.00
300 Estimates at $7 Addnl. Cost Each = $2,100
Total Hard Cost: $2,625.00

Annual Opportunity Costs
Raising Close Rate to 31% = $7,776.00
Upselling to $3,500 AVG. Ticket = $6,804.00
Increasing Profit Margins to 30% = $8,064.00
Total Opportunity Cost: $22.644.00

Again, would it be worth investing $2,625.00
throughout the year to make an additional $22,644.00 in profits?


It doesn’t matter if you’re a BIG contractor or a smaller owner-operator, here’s the point: Tiny hinges swing big doors! Smaller, smarter investments in “hard costs” to improve your marketing and estimating systems ALWAYS pay off in SPADES!

Don’t think like the “poor painters.” Don’t be a “penny wise and a pound foolish.” Instead, count the opportunity costs of growth and improvement alongside the momentary cost of expense, labor, and your own personal “discomfort” as you learn to implement a new way of doing things in your business.

If you take this approach, you WILL begin to pull past your local competition and eventually leave them in the dust behind you. While you’re depositing your “thousands” in the bank, they’ll be counting the “pennies” that they saved!

Brandon Lewis, B.S., M.B.A.
Director of the Marketing Department
The Academy for Professional Painting Contractors
Department: 423-800-0520

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