Profitable Painter Podcast
Profitable Painter Podcast is a rich resource for anyone interested in starting, running, and scaling a professional painting business, offering valuable insights, strategies, and interviews with industry leaders. Through case studies and in-depth discussions, we deliver a vivid picture of the painting industry, with a disclaimer that any financial or tax information is general and not a substitute for professional advice.
Profitable Painter Podcast
Boosting Painting Business Profits with Strategic Vision and Goals
Step into the world of strategic growth and propel your painting business into a prosperous future! Join Daniel Honan, CPA and Richard Dunton, EA as we promise to unlock the secrets of transforming aspirations into attainable realities through the art of SMART goal setting. Explore how visionaries like Jeff Bezos turned mere wishes into global empires, and learn to craft a roadmap that guides you from today’s dreams to tomorrow’s triumphs. We'll discuss how to harness the power of SMART criteria—specific, measurable, attainable, relevant, and timely—to align your annual targets with your decade-spanning ambitions, even during the slower seasons.
Discover effective strategies to not only set, but also implement, your goals with precision and confidence. From increasing lead generation and improving closing rates to enhancing customer value with creative presentation tactics, we cover it all. We'll discuss the art of boosting profits by targeting high-paying jobs and crafting compelling offers that empower customers to choose premium services. With practical advice on evaluating marketing channels for the greatest ROI and strategically allocating resources, this episode equips you with the insights needed to elevate your business to new heights.
Welcome to the Profitable Painting Podcast. My name is Daniel Honan, I'm a CPA who helps painting business owners make more money and save big in tax, and joining me today is Richard Dunton and we're discussing how to set smart goals for 2025.
Speaker 2:Yeah, I can't believe we're in 2025 already. It feels like time just flies by and here we are. It's already the end of January. So if we haven't set our goals for 2025 yet, now's a great time to think about what we want to accomplish in the new year.
Speaker 1:Agreed. Yeah, it's a great time to think through things, especially since a lot of penny business owners at this point kind of slow season for most folks, so it's a great time to take a look at what do you actually want to achieve in the new year, and so today we're going to dive into some ways to think about this and how to set some goals.
Speaker 2:Yeah, you know, when I try to set goals for myself, I was actually really surprised to learn that one of the hardest things is understanding, like, where I want to be in the next you know 10 or 15 years. We can accomplish incredible things in the next 12 months and we can accomplish, like life-changing you know, monumental things in the next 10 years if we are putting those steps in place. So when I think about what I want to do in the next 12 months, I actually start in the future and I think of, okay, what are my dreams for the future? And I try to give myself permission to really be audacious and really think big. I try not to limit myself, which is hard because we're very practical people. We deal in the here and now and the reality of the situation and we try not to be overly optimistic, but when it comes to dreaming, we want to do the opposite.
Speaker 2:We want to think about, you know, if I could accomplish anything, what would my life look like 10 years from now? Where would I want to live, like location-wise, what kind of house would that be? How many bedrooms would it have? How many acres of land would surround it? How much money would be in my bank account in my dream? What number would give me that feeling of security and allow me to do the things that I want to do when it comes to work? How many hours per week am I working For me personally, I probably want to work at least some hours so that I feel that satisfaction of accomplishing things but still have plenty of time to pursue hobbies and golf and, you know, play with the kids, and it can even be, you know, as granular as like what kind of car do you want to drive?
Speaker 2:What kind of vacations do you want to go on with your family? I know it sounds a little hokey and it feels almost like we're not spending our time wisely, but I think it's worth to spend five or 10 minutes really getting that picture in your head, so that you know where you want to go. You're setting the destination.
Speaker 1:Yeah, I think it's super important. I've read a lot of biographies and one of the common themes is these folks like Jeff Bezos, even Napoleon, sam Walton they have a very clear picture of what they want to accomplish. And I think there's a saying it's belief before action. You actually have to believe in these things you want to accomplish and really be able to visualize it, in these things you want to accomplish and really be able to visualize it. And it reminds me of Jeff Bezos.
Speaker 1:Back in 1994 or 1995 is when he had the idea for starting Amazon. He wanted to start an everything store on the internet. Obviously, when it first started it was not the everything store, it was a bookstore online basically. But he started with books and over many decades he's turned it into basically everything store. So now that's why I have to spend my weekends burning or getting rid of Amazon boxes, because we now purchase everything from Amazon. But he started with that idea from pretty much the beginning and it took him a while but he eventually got there. One of the cool things he actually originally called Amazon Relentless. That was one of the original names he was wanting to call the business. So if you go to relentlesscom, it actually takes you to Amazon, which I think is kind of cool.
Speaker 2:I did not know that. That is kind of cool. I bet he he's sitting on a pretty valuable URL, like I think someone would probably spend Among other things, yeah, among other things.
Speaker 1:Yeah, among other things.
Speaker 2:Absolutely so. I know it sounds a little. We might not be used to doing something like this, but having that end result in mind is super important for me, because then I'm going to start working backwards, right? So, if I want to be in a certain place in 10 years, what does my income need to look like in five years to get halfway there? And then, once I know my five-year target, I'm going to look at my three-year target that's going to support that, and then I'm going to look at my next 12 months. What do I need to do in the next year so that I am one-tenth of the way to where I want to go? And that's what I'm going to use to set my goals for 2025.
Speaker 2:So, when we talk about setting goals, I think we have to talk about the difference between like a goal and a wish. Right? If I say I want to make more money, that is not a goal, that is a wish. It is a very nice wish, but wishes do not come true unless you're in a Disney movie, and so unless you're a Disney princess. I think we need to focus on goals that are specific, measurable, attainable, related and timely. And you've probably heard the acronym, you know SMART goals, but that's what separates a goal that we're actually going to accomplish with a desire or a wish.
Speaker 1:That's pretty harsh. You're calling people Disney princesses just because they want to. Hey, I want to make more money, so you're kind of calling me a Disney princess, it sounds like, but all right, tough love there. I mean make more money, so you're kind of calling me a Disney princess, it sounds like, but all right, tough, tough love there.
Speaker 2:I mean yeah, no, it's cool. No, I, I didn't. I didn't say you are a Disney princess, if you have a wish. I said only Disney princesses have their wishes fulfilled. Okay, gotcha, Daniel, if you achieve all your dreams without putting forth effort and setting smart goals, then I think we can conclude that you are Cinderella.
Speaker 1:Right, yeah, no, this makes complete sense. Right now doing a lot of meetings with clients that we're working with and the topic of what are your goals for 2025? And oftentimes they'll throw out like, oh, I want to hit 500,000 in revenue or whatever their revenue target is, but a lot of folks haven't quite put in. Okay, let's actually break that down. What does that mean in terms of marketing spend, hiring, do we have enough production, enough of a production team, to produce that amount? So kind of breaking down that goal more specifically can really help you with planning and actually achieving that goal.
Speaker 2:Yeah. So that's the S right, that's specific. The M stands for measurable. And, daniel, I know you've said repeatedly that what you can measure, you can improve, and so if we don't have some metric or some way of measuring our progress, it will be very, very difficult to know if we're going in the right direction. So our goal needs to be measurable. If our goal is to increase revenue, that's pretty straightforward, right, where you can see has the number improved over last year. So having that specific metric is important. And then the next one is A for attainable.
Speaker 2:We want to set goals that are realistic. I also think that they should be a little bit ambitious. Don't make it too easy, but don't make it impossible to obtain either. Otherwise we'll just get frustrated when it inevitably does not happen. But it's okay to push yourself a little bit. Increasing revenue by 30% over last year is attainable. Increasing by 3,000%? That might not be realistic, but who knows, maybe you're that good.
Speaker 2:The R in SMART stands for related. So we want to understand how this goal relates to us achieving that dream. Increasing revenue for the year is directly related to us making more money, which is directly related to us having that house, going on those vacations, reducing our stress. And then T is for timely. So our goals need to have a time frame. In this case it's the next 12 months. An open-ended goal with no due date kind of starts to become a wish. So have a set time that you want to achieve this by. I know we mentioned as an example that increasing top line revenue by 30%. That could be a good goal. Another goal we might set maybe I want to increase my average customer review. So right now maybe I'm looking at like 4.5 out of 5 stars on Google. Maybe I want to get it up to 4.8 by the end of the year. Maybe our goal is to reduce our working hours so that we're only working 40 hours a week, which I know for some of our listeners would feel like a vacation compared to the 60, 70 plus that they're working now. But those are all goals that would fit within that SMART framework.
Speaker 2:Once we determine what our goal is, we need to come up with three to five strategies that will support that goal. So we're breaking it down to another granular level. For example, let's go with the goal of I want to increase top line revenue by 30%. All right, what are three strategies that we can implement that are going to get us to that goal. I wrote down a couple examples and this is not all inclusive, but we might look at, say, strategy one I need to increase the amount of leads that I get by 50 percent. Totally makes sense. The more leads you get, the more work you get booked, the more revenue you earn. So increasing leads would would help us attain that goal. Another strategy might be I want to increase my closing rate by 10 or 15 percent. This is a different strategy than the first one, because now we are taking the leads that we get and we're converting a higher percentage of those into work booked and that's going to increase our revenue. A third strategy might be I want to increase my average price by 10 or 15 percent Again another pathway. We are taking the work that we do get booked and we're increasing its value and that one's directly affecting revenue. So the examples are increase the leads, increase the close rate, increase the average price. We've got these strategies. We're not done yet.
Speaker 2:Each strategy gets broken down into action items that we need to execute. So, for example, strategy one increase the amount of leads. What do we need to do to increase our leads by 50%. Well, we're going to need to increase our advertising. That seems pretty obvious, but how are we going to do that in a way that we are getting the most bang for our buck?
Speaker 2:This might be a time where you sit down with your financial reports or your financial planner and you really dig into what is my customer? Acquisition cost, acquisition cost what does it cost me in advertising to get a customer? Am I spending enough on acquiring customers? We talk a lot about your sales and marketing should be about 15% of revenue. Are we spending enough to get those leads? And if we are, where should I be directing my advertising budget, because not all marketing channels are equal. You know, to get the most bang for our buck, I would be sitting down and looking at our different marketing channels.
Speaker 2:Let's say we had three different marketing channels Facebook ads, angie List, leads and direct mailings. What is our average return on investment? So if we spend $20 on Facebook ads, are we getting $100 of new work? That would be a one to five ratio there. That's pretty good. How about Angie's list? Angie's list is getting more expensive every year and sometimes I've heard the leads that come from there aren't as high quality as maybe they used to be in the past. Are we still getting a good return For every $20 that we spend on Angie's List? Maybe we're only getting $60 in work booked.
Speaker 2:Direct mail is an interesting one because this seems to be cyclical, right. There was a time when direct mail advertising was very, very popular, very effective. Then we enter in the digital age. Email comes, people start to kind of ignore the stuff that shows up in their mailbox and now we're seeing it go the opposite way again, where people are sick and tired of email and websites and you know getting a printed postcard with, you know, a glossy finish, that that means more than it used to. So you know what does it mean today? What are we? You know, what kind of return are we getting on it in 2025? Once we figure out the marketing channel that's giving us the best return, then we know where to focus our money.
Speaker 1:And I think a lot of folks recently last month or so that I've been talking to, they have a lot of inbound marketing. They have a lot of inbound marketing, meaning they get leads from repeat work like folks that they've worked with in the past that want to do work with them again. Or they get referrals people telling them about their services and so they're not spending a lot on marketing right now, but they want to grow quickly or faster than they have been in the past and so they're looking at more outbound strategies like Facebook ads or direct mail or door-to-door, and sometimes you don't have the customer acquisition cost to look at historically on your financials because you haven't done it before. So you might actually have to do some research. If you're adding a marketing channel like if, let's say, you're adding Facebook ads to your marketing because you've never done it before you've only done repeat work and referral work but you want to grow faster, so you're going to add in Facebook ads to get that growth going.
Speaker 1:That might be something you'll have to do some research and right now I think Facebook ad leads are costing about $60 to $80 per lead and then making sure you understand everything that goes into nurturing Facebook leads like getting them set on the calendar as quickly as possible, and usually Facebook leads are going to be a little bit harder to close, so your close rate might be affected negatively. And this is generally true for outbound. When you're doing outbound marketing it's usually harder to close people because you found them instead of them coming out and finding you, so it's a little bit more difficult, but it's necessary for growth. So sometimes you might not know your customer acquisition costs because you haven't done this type of marketing before. So getting smart on those different channels will really help you determine how to implement this strategy and how much you actually have to put into increasing your leads.
Speaker 2:Yeah, I think that's good advice. You know, the market changes and sometimes it changes slowly and sometimes it changes, you know, overnight. And when that happens we need to change our marketing to reach, you know, the people we want it to reach. So I think it is very important to keep a close eye on what's working and what's not, and then we can kind of emphasize what's working, really direct our efforts towards what's going to do the most good, because what's worked in the past may not work now. And so I just think of, like you know, if our goal is to increase our leads by 50 percent and we don't pay attention to what marketing channels are best and we just dump a bunch of advertising dollars into something that might not be working, how tragic would that be? Because not only are we not going to hit our revenue goal, our profit's going to be down because we wasted a bunch of money on advertising, and we might get discouraged and say you know, hey, that was a stupid goal that's not obtainable. Well, the goal itself is probably a good goal, but maybe the execution wasn't where it needed to be. So keeping an eye on those things, I think, is really important. So that's one strategy right increasing the leads. Another strategy would be to increase the close rate. So what action items do we need to employ for this? Well, if we're going to increase our close rate, then we really need to examine our current sales process and see is there any way that we can improve it? You know, maybe we've gotten a little bit complacent and we don't prepare as well. I know it's easy to kind of fall into that rut. But even if we're able to just improve by 10 or 15 percent, that increase in our close rate is going to help us achieve our revenue goal.
Speaker 2:When we are going through our sales process, are we clearly showing our value to our potential customer? Are we making the process smooth and easy and downright enjoyable for them? Are we making sure that we are presenting the proposal on site? So that might mean that we have to have a printer in our van. It might mean that we need to invest in some technology so that we can prepare those proposals before we leave the property. If we are taking the information back to our office, preparing a proposal and then emailing it to them 12 to 24 hours later that's 12 hours they have to call somebody else and we've lost that initial excitement. So being able to present the proposal, talk about the price, overcome any objections in person is going to be big. And speaking of overcoming objections, have we kind of role played that? What are our most common objections? That is going to address their concern. That we can easily rattle off with confidence so that we're not leaving them with any reason to say no to us. Those are all things that could improve our sales process.
Speaker 2:The third strategy is to increase our price, and it was funny when Daniel and I were preparing for this podcast we were kind of like oh, increased price, that's easy, right, we just changed the number on the proposal. How difficult is that? And then we started brainstorming it a little bit with action items and we realized that there's a lot more to it than just charging more. Right, that's kind of a glib answer just charge more. We can charge more, but we have to increase the value that the customer is getting. People don't say no on price. They say no when they don't see enough value for the money being paid. So how do we increase the value so that we can charge more?
Speaker 2:Well, we could improve our offer. That means, maybe, a better presentation. So maybe we have been a little bit lax on our dress code, but could you know, branded whites really help give a more professional presentation and a better experience for the customer. We might improve our offer with add-on services that don't cost us a lot. So, like color consultation is a big one, it may seem like a simple thing to us. Next, you know 8 to 12 years. Having someone give them suggestions and guide them is incredibly valuable and that doesn't cost us hardly anything to do that. Another way that we can increase our prices is simply by seeking out jobs that pay us better. So maybe we turn down partial jobs or we push to get more rooms in the house so that we can have a higher average job cost. Maybe there's.
Speaker 1:There's. Oh sorry, Interrupt.
Speaker 2:There's a couple of ways Go for it.
Speaker 1:Yeah, there's a couple of ways I've seen folks do this is they'll either on their intake form on their website they'll say you know we have a job minimum of a thousand dollars. Or say we only do full projects, full exteriors or full interiors, so or full decks or whatever you're doing, and so you can get rid of. Or on your qualifying call, if you do a qualification call, you ask that question like is this a full exterior or full interior? And if it's not, then you can refer it away or say you can't help them, whatever. And if you're getting rid of those smaller jobs, that will increase your overall average job size.
Speaker 2:Yeah, and if someone really likes your company because your presentation is really good, they might be willing to have an extra room painted that they weren't planning on, because that's how important it is to them to have your company do the work, to have your company do the work. And we also talked about maybe focusing our advertising on higher margin work like residential repaints, exterior work when the weather is good, that pays better. And maybe we market to more affluent neighborhoods, where they have more disposable income, larger homes with more square footage to paint. Not that we have to exclude anybody, but just kind of knowing where our ideal client avatar lives and going to them will help increase what we can charge.
Speaker 1:Yeah, absolutely, that's huge. Like finding in your city what are the main neighborhoods you want to work in, because you know that's where the folks that are that have the money that can afford to do you know two coats exterior, full exterior or full interior job. Find those neighborhoods and then start lighting them up with every door, mailers or door to door, whatever you can to get in front of them, to get those more ideal clients. And if they're your ideal clients, that's probably going to increase your average job size.
Speaker 2:Yeah, and then, daniel, you had a really good suggestion and this kind of goes to like marketing psychology of the good, better and best, ron from Paint Tigers.
Speaker 1:He did a really good job of implementing this. He increased his average job size, which he said publicly in presentation, so I'm not giving away any kind of things that he wouldn't want me to say, but his average job size increased to like $15,000, in the averages around 5,000. So really really impressive doing this good, this good, better, best proposal strategy yeah, so how does that work with the the good, better, best?
Speaker 1:basically you have three options for the customer, because oftentimes when you go and bid a job, the customer will or the the prospect, I should say, before they become a customer they'll say well, I'm going to get a couple other estimates, we're going to get at least three options.
Speaker 1:So the idea here is you're providing three options right away for them, and they know that they want to work with you. They just got to choose what price point they want to pay, and so you have good, better and best. Good would be something like one coat using super paint, so it's a good product and we're going to do a great job, so it's good. Then maybe you have another option that's hey, we'll do better, we'll do two coats using super paint and still great, great product. And you get two coats and then maybe best would be something like two coats, but you're going to use top of the line duration or whatever and minimal extra service you're doing, but you're charging a higher price for that service Because with painting, labor is going to be your biggest thing. So if you can change just the product that you're using and charging more money, that's going to improve your margins and also your average job size.
Speaker 2:I love it. Yeah, I know there's been some psychology done too where if people are presented with three options, they are more likely to choose the middle option or even the high-end option over the lowest one. And I think it kind of goes to our psychology of. You know, I don't want to cheap out, I don't want to miss out that FOMO, I can't be the one who picks the bottom line. So that might help. Actually, you know, increase the amount the client was going to spend in the beginning by giving them those other options.
Speaker 2:And I like this too, because you don't have to put a hard sell on anybody. You're just presenting them with the options and then they are self-selecting. You know something that fits what their needs are and what they want to get out of it. You're not because you never want to like, go in and assume, oh, this client, this customer, they don't want to pay for this, they don't have a lot of money, this isn't important to them. Don't do that to them. They have the right to choose how much they value what you have to offer, to choose how much they value what you have to offer, and they might surprise you in what they choose.
Speaker 2:So I really enjoyed this podcast. I think these are some really cool, you know, actionable things that we can put into place for setting goals for 2025. And your goal may be a little bit different, but whatever it is, you know, try and make sure that it is a SMART goal so that it is, you know, related to that dream that you want to accomplish. Come up with one to three strategies that actually three to five strategies that are going to help you achieve that goal, and then break those strategies down into action items that you are going to execute and it's all going to work itself up to the top and get you that much closer to that dream home, that dream vacation. And that's really why we're doing this right so that we can do the things that we want to do and have the life that we want to live. We want to do and have the life that we want to live.
Speaker 2:So, stay focused, continue to direct your efforts towards hitting your target. We might need to make some adjustments, right, because was it Muhammad Ali who said everybody has a plan until they get punched in the face? Sometimes stuff comes around and punches us in the face and we need to pivot, but we still have our roadmap to success. So I appreciate everybody listening to this episode. I hope you got something out of it If you would like to share what some of your goals are or some of your strategies for achieving them. Where can they do that, daniel? Do we have a Facebook group?
Speaker 1:We do. Thanks for asking, Richard. So if you go to Wonderful segue. Yeah, If you go to Facebook, type in Grow your Painting Business. Definitely join that group and ask questions, provide recommendations for future episodes. Love to hear from you.
Speaker 2:Absolutely, and I think one of my goals for 2025 needs to be better segues that come off more naturally.
Speaker 1:I think you're doing great. Oh, thank you. All right With that. We will see you next week.
