Buying A Painting Business

BT006

Hello all - I am about to sign a letter of intent to buy a commercial painting business located in the Pacific Northwest. I am an experienced business owner but know very little about painting.

This business has 20 plus employees and does new construction almost exclusively. It is very profitable ($250k a year in discretionary cash flow) and the price is excellent. There is no single key account (98% of work is spread between 7 contractors) or single key employee (however 5 "journeyment" painters have been with the company over 10 years). Everything looks superb.

However, while the owner is going to train me for two months I am very concerned about bidding out jobs. His method, and it seems to work, is a chart that charges so much per square foot with some modification depending on the type of construction. It looks pretty straight forward but I am still concerned about this and about maintaining quality control. I will have the help of several senior crewmen. Most of the work doesn't even require bidding (long time contractor relationships) but those that do....

I manage people very well and have good business skills. Any opinions? Any suggestions as to questions I should ask - about the bidding and quality control processes?

Thanks all!

send_it_all

Only suggestion I have is use that two months to learn his system as well as possible. If the business is doing that well, dont try to make any changes right off the bat. Down the road when you get more comfortable with it, you can maybe make some modifications.

Richard

The owner knows his company. Therefore..

listen
learn
do

In 2 months you will learn about the business aspect of it, but will be clueless about what really makes a great paintjob (that takes years of practice and trial and error to learn). I wouldn't even think about coaching, in any way, the guys who know how to paint, or you will have not 1 guy who respects you and morale will be terrible. Let them do the work, you bid and land the jobs.

Keep learning the trade as you go and eventually you'll be able to at least understand issues that may arrise. But for the application aspects, you'll pretty much be at a disadvantage unless you actually get out there to paint. And you sound like you'll be a bit too busy for that.

You're basically the guy that signs the checks. If you're cool with that, have fun my man and good luck to you! Sounds like a good company.

...oh, and as for the bidding aspect of it
use his methods of bidding, I'm sure they are tried and true

__________________
Rich

BT006

Thanks folks - that was my intention.

One - don't change anything for at least a year unless I have to address customer complaints.

Two - I have no choice but to let the sergeants (the journeymen) help me run the company. After the first three months, if everything is stable and running decently, I intend to set up a profit sharing plan with them so that they have a stake in the company's success and they get rewarded for their effort. They are somewhat underpaid at present in my opinion and I have always run my companies, when I could, as a joint effort. It is only right to reward people for making you money. I might make less in the short run but eveyone does better in the long run. I definitely agree about trying to tell the pros how to paint - bad idea. I might, after the first year, send them to seminars or conferences to expose them to new ideas. Any suggestions there?

The company uses high end Graco sprayers - any opinions there?

Thanks everybody - if this sale goes through I'm going to have many many questions.

rws

The PDCA may be a big help to you.You can reach out to them thru the PDCA message board.

BT006

Thanks - PDCA looks like a good org.

rws

The president of PDCA has a commercial painting business in the pacific northwest also.Another good source for estimating systems, and anything else really, on the web is ThePaintersNetwork

Da Vinci

Just one concern for due diligence here... if the painting company does almost all new construction, what are the projections for new developments in the area covered? I know a lot of larger developers have had plummeting sales and stocks, and most will only build in phases, not continuing next phase until certain amount of previous phase is sold.

Maybe it's strong in this area, but I would check to make sure. Bidding repaints or remodels is completely different from new construction, and the square foot formula does NOT work in those areas.

Just my 2 cents,
Bob Volk
elshaddaipainting.com

BT006

Thanks for the thoughtful post Da Vinci - The area is one of the top 5 fastest growing in the US and new construction should be strong even if the housing market in the US continues to degrade. A majority of the growth comes from retiring baby boomers.