how to compete with that?? - Contractor Talk - Professional Construction and Remodeling Forum

Pat72 · 07-28-2006, 10:03 AM

Hi guys,
I am new to this forum but must say that I’ve learnt a lot just by reading many posts from very knowledgeable contractors. I am starting a new painting business (exterior residential only) and did plenty homework for the past 6 months in order to avoid all the common mistakes. Anyway, I recently started dropping flyers in some communities close by and saw flyers of another painting company offering a complete exterior painting job for any house up to 2500 Sq/ft for the unbelievable price of $1180. The worst part is that this company has been around for a while and seems to have a good record of customer satisfaction. I just don’t get it! How am I going to compete with that? I keep recalculating the cost of materials, hours of labor, cost of doing business (bills, gas, insurances etc.) and what I get for the painting of a 2500 sq/ft or even a 2000 sq/ft house is way above $1180, unless I work for $5/hr. They even have a website : "millenniumpainting1" where they advertise everything that’s included in what I would call "the perfect paint job". Could any of you guys take a look at their web site and let me know what you think of it and what you would do in my situation? I am in this for the long run and would like to do the best possible job when I take on a contract but not at 5$/hr…me too have bills to pay! Thanks for your inputs

AAPaint · 07-28-2006, 12:08 PM

You'll just have to set yourself apart on service and quality...These are the two areas I compete. Price, I can't even begin to compete with the $49.00/room guy around here.

donb1959 · 07-28-2006, 01:31 PM

Believe me in this area the low-ballers are everywhere. You can't compete with that. Lets break it down and see if there's any way they are making money on this "special" .... a 2500 sq ft home lets say in perfect condition, 0 prep required, the home is all siding, matierials 6 gals paint (min)= $180.00. Trim paint (windows, doors, etc) 2 gals= $60.00 Total matierial cost= $240.00

Labor: 4 men 3 days (min) $1152.00

Total labor & matierials = $1392.00

$1392 - 1180.00= -212.00

This number is not factoring any overhead, matching SS etc... so just how are they making money...they're not. It's bait and switch...add ons etc...

Note: All paint is assumed to be SW SuperPaint
Labor is assumed at $12.00 per hour/8 hour days.

Brushslingers · 07-28-2006, 03:27 PM

Wow, not sure what to say about that other than, wait... they can't run a real business at those prices. Most likely they are getting thier foot in the door with the lure of a cheap price, then adding on for square footage "due to this house being larger", etc.

Woz the Painter · 07-28-2006, 05:39 PM

Or maybe they hire illegals and pay them 6 bucks an hour...

AHS · 07-28-2006, 06:25 PM

It sounds to good to be true, so it probably is.

I bet they price the job with the cheapest paint sherwin williams has & then charge you like $800 to upgrade to super paint & if you want 2 coats its an additional $900. I'm sure they do very few jobs at there advertised price.

Dave-Raleigh · 07-28-2006, 08:58 PM

They probably also charge through the nose if you want different colors in each room.

Even Centex Crosland rapes you if you want anything othe than the same color throughout the whole house. On my house I had to buy the paint and also pay them something like $200 for every color change.

Guess they couldn't trust their sub to understand anything other than 'spray the same crap white throughout the house that you did the other 200 houses with. He!! they didn't even have a sub that could speak english.

BTW we compromised and I bought the paint and they ate the $200 color change charges.

Crawdad · 07-29-2006, 06:08 AM

Quote:

Originally Posted by Dave-Raleigh

They probably also charge through the nose if you want different colors in each room.

...

They are talking about exterior painting.

I wonder how much their "add-on" fees are, for oversized houses, maybe that's where they make it up.

Pat72 · 07-29-2006, 07:23 AM

Well, you all probably right concerning the chances that they get one foot in the door and then work from there. As far I'm concerned, I just hope that this Special will only last until the end of summer which seems to be a very slow time when it comes to residential painting because even though they are low-ballers, how do you convince a potential customer that you'll do a better job and are more reliable than a company which also offer a written warranty and a list of 1000 local references (satisfied customer probably) to back it up?
Thanks you all for your inputs, it shows me that I am not the one overpricing here cause I was starting to doubt myself a little!

**Double-A** · 07-29-2006, 06:21 PM

Pat, make a list of reasons you would hire you, instead of the other guys. Then make a list of why you would hire them, instead of you. Market the reasons you would hire you that are not priced-based reasons and learn to recognise when a client is using your second list to hire a painting contractor.

You are not in competition with them, no matter what you think.

Look at it this way. Check the price of gas in your town. Why isn't everyone charging the same amount at every gas station? Why are some cheaper than the others? Would you buy gas from the cheapest folks? Why not? Why are there three grades of gasoline? Why do some gas stations still offer full service lanes?

The reason some folk will buy your services is because they are your services and not the other guys. They don't want to deal with a company that wants to conquer the painting world.

McDonald's is successful not only because they have cheap hamburgers, but because of location, kid friendly, kid-centric product and marketing tie in, etc. If their success was based solely on the taste of their burger and its aesthetic "eye-appeal", they'd go broke yesterday.

Brushslingers · 07-29-2006, 06:31 PM

Quote:

Originally Posted by Double-A

You are not in competition with them, no matter what you think.

Exactly, you are in competition with yourself. I get more leads from other paint companies than I do the paper.

Pat72 · 07-29-2006, 08:29 PM

Double-A , I see what you mean and will work on that list however when it comes to exterior painting, I don’t see a lot of factors that could affect a potential customer's initial decision to hire or not a specific contractor. It seems to always boil down to the same few: quality of the paint, warranty, references, good workmanship etc. To make a long story short everybody seems to be competing along these lines and unless I bring to my customers a dozen doughnuts every morning and some nice hot coffee, I will also be promising the same things. I don’t know if you checked out the web site of the company I was mentioning in my first post but these guys covered all their bases and I just can’t find anything else that would give my little business that edge unless I drop my prices which I am not going to do. But I got your point and will see if I can find the magic bullet…or pray for that damn special to be over!
Brushlinger , what do you mean by : “I get more leads from other paint companies than I do the paper” ?

Brushslingers · 07-29-2006, 10:19 PM

Quote:

Originally Posted by Pat72

Brushlinger , what do you mean by : “I get more leads from other paint companies than I do the paper” ?

When I moved back to my home town in the gold coast and started anew, again... I made sure to find as many small companies in my area who also were committed to "real" painting. They call me almost every day for boucning ideas off to asking if I can take this customer. I have a total of 6 small paint companies that send me work... networking at its best.

You are never competing with anyone in your town, you are always competing with yourself, doubting, overthinking, overworking...

What do you have over that other paint company? You. THE biggest part of owning your business is selling yourself, and your company... not the competition or the product. If you walk in begging, shoulders slumped... homeowners that have a little cash to spend are like dogs, if you can't sell to your dog... that homeowner ain't gonna believe ya either.

AAPaint · 07-29-2006, 10:20 PM

Hey Pat, here's an idea I try to express to my customer's in similar situations. I am a small one man painting company (sometimes 2 or 3) but usually just me. I can't compete with a big guy like that who has thousands of customers as a reference, etc. However, I can offer something they usually can't. As the owner of the company and 95% of it's workforce, I can assure them that they don't have to deal with a foreman or middle man throughout the whole job. I am available until 8pm every night by cell phone if not on the jobsite, and I personally answer every call. My customers rarely talk to a machine. If the customer has questions or issues, I am usually there on the job myself to handle them. Also, since I am doing a majority of the work myself, I can guarantee no details will be missed. As the owner of the company responsible for the work, I have a vested interest in the outcome being the very best that it can be. I don't have thousands of customers to back me up, but I do have many that are very satisfied whose names I will gladly provide and urge you to contact. I someday hope to have thousands, but for now, Mrs. Jones, I was hoping you would be the next one!

Brushslingers · 07-29-2006, 10:23 PM

Oh, almost forgot... some reasons you are above the others for ya -

We drape all foliage.
We protect concrete.
We protect wood/decks.
We scrape/clean all windows.
We dispose of "wastes".

Put that in your quotes and scope of work.

**Double-A** · 07-29-2006, 11:58 PM

Quote:

Originally Posted by Pat72

It seems to always boil down to the same few: quality of the paint, warranty, references, good workmanship etc.

I don’t know if you checked out the web site of the company I was mentioning in my first post but these guys covered all their bases and I just can’t find anything else that would give my little business that edge unless I drop my prices which I am not going to do.

OK, what I saw on that site that struck me was this;

"Price includes paint (100% acrylic), professional labor and a written warranty."

It says absolutely nothing about cleaning or prep work.

They say they do complete exterior painting also, which includes a bunch of stuff you'd 'expect' to get for the money they quote, but nothing on that web site says they will prep for that price.

What I didn't see anywhere was a 'scope of work' or a statement explaining the terms or duration of the warranty.

I think you're looking at what the Tin Men used to call a 'hook'.

Remember, Earl Scheib will paint any car for $99.00.

Pat72 · 07-30-2006, 09:30 AM

Brushslingers, I didn’t know that what you're doing with other businesses was even possible. I guess if they have way too much work they could give away some customers. Either that or the owners are your high school buddies. Or maybe you specialize in something they don’t do… Thanks for the good advices though.

AApaint, I like that fresh new angle. I’ll definitely use some of that.

Double-A, if you look at the lower half of their home page, you’ll see a complete detailed list of all the prep work they do. But no matter what you're right this is definitely a hook. I was just trying to find a way to get around it if one day a customer tells me: "yes, that's great, but this other painting company does all of that also but for much cheaper..."

Brushslingers · 07-30-2006, 10:09 AM

Quote:

Originally Posted by Pat72

Brushslingers, I didn’t know that what you're doing with other businesses was even possible. I guess if they have way too much work they could give away some customers. Either that or the owners are your high school buddies. Or maybe you specialize in something they don’t do… Thanks for the good advices though."

Heh, all new starts need a little help. Stand around in the paint stores, meet and greet... you'll end up meeting a young owner that is just as confused as the next guy. You stand confident, he will end up telling you that he's getting more work than he can handle. Offer to "help" him out if you are slow, renting you or your guys out for a couple dollars less than the local temp agency. For instance, local temps here for painters is 18.03 per hour... I charge other businesses 15.00, they 1099 me at the end of the year. Once or twice I took a whole job and told the guy "80/20, we will take care of it for you.". In the end, they will say to you one day... "can you take this guy? I just can't get to him".....

Do the same with "pure" pressure washing companies, renovators, remodelers, portable building companies, commercial build-outs in strip malls (the ones that say, we build to suit), rental homes and realtors . If your name is the only one they have... if someone asks "Hey you know a painter?", guess who they give out.

I've even been known a few times (much to my wifes dismay) to hand a card to a manager of a resturant after dinner and tell him the owner needs to speak to me. Think outside the box, homeowners alone will starve you to death.

You take a bath a few times in the beginning, but later on it pays for itself more than joining the Chamber of Commerece. THAT, is networking. After awhile, you'll have more business than you can handle and can call other small companies and say...

Pat72 · 07-30-2006, 05:22 PM

Thanks Benn, appreciate all the good advices. And also thanks to everybody else who posted in this thread. Hopefully, later on (once I get a little more experience in the biz) I’ll be able to give back and help some of you.
This forum is a gold mine for contractors like me who can learn a lot from other’s experiences. Thanks to all.

Pat

**Double-A** · 07-30-2006, 06:56 PM

Quote:

Originally Posted by Pat72

Brushslingers, I didn’t know that what you're doing with other businesses was even possible. I guess if they have way too much work they could give away some customers. Either that or the owners are your high school buddies. Or maybe you specialize in something they don’t do… Thanks for the good advices though.

AApaint, I like that fresh new angle. I’ll definitely use some of that.

Double-A, if you look at the lower half of their home page, you’ll see a complete detailed list of all the prep work they do. But no matter what you're right this is definitely a hook. I was just trying to find a way to get around it if one day a customer tells me: "yes, that's great, but this other painting company does all of that also but for much cheaper..."

Call them and ask them exactly what they do for that money. I don't think they are doing any prep work, and I'll be the warranty is nil if you have them paint without the prep work. Do your homework, quit fussing about them and find out!