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
Superhero Syndrome: Why You Can't Do It All Yourself
In this episode of the Profitable Painter Podcast, we sit down with Tara Riley, COO of the Academy for Professional Painting Contractors (APPC) and a 20+ year home services veteran and former President of Fresh Coat Painters. With experience diving into the financials of hundreds of painting businesses, she reveals the critical mindset shifts and operational strategies that separate stagnant companies from scaling superstars.
You'll learn how to:
- Break Through the $500k Barrier: Why your role must change from "Superman" doing the work to a leader investing in people.
- Overcome the "No Good People" Myth: How to shift from a scarcity mindset to building a deep bench of talent (her "30 Painters in 30 Days" method).
- Master Your Most Valuable Asset: Why your customer list is your business's true equity and how to nurture it for powerful, low-cost repeat and referral business.
- Diagnose Your Growth Gaps: Use the simple "Rule of 3" (3 minutes, 3 days, 3 weeks) to instantly identify bottlenecks in your sales and production capacity.
- Plan for Profit, Not Just Revenue: Why "Mama" Gross Margin (aim for 55%) is the #1 KPI to watch before you spend another dollar on marketing.
If you're feeling stuck, overwhelmed, or unsure what to fix first to scale your business, this conversation is a masterclass in strategic thinking from an expert who has helped franchisees grow from $15M to $70M.
Key Takeaways:
- The #1 limiting belief that holds owners back from hiring and how to overcome it.
- How to calculate the exact additional sales needed to justify a new hire risk-free.
- Why you must always be thinking 6-12 months ahead, especially to conquer the "Dark Quarter" (Nov-Jan).
- The two key numbers Tara looks at first with every client to diagnose their business health.
- Her actionable advice for building a business that lets you work less and make more.
Subscribe to The Profitable Painter Podcast for more weekly strategies on mastering your numbers, boosting profits, and building a business that works for you.
Welcome to the Profitable Painter Podcast. The mission of this podcast is simple to help you navigate the financial and tax aspects of starting, running and scaling a professional painting business, from the brushes and ladders to the spreadsheets and balance sheets. We've got you covered. But before we dive in, a quick word of caution. While we strive to provide accurate and up-to-date financial and tax information, nothing you hear on this podcast should be considered as financial advice specifically and tax information. Nothing you hear on this podcast should be considered as financial advice specifically for you or your business. We're here to share general knowledge and experiences, not to replace the tailored advice you get from a professional financial advisor or tax consultant. We strongly recommend you seeking individualized advice before making any significant financial decision.
Speaker 1:Welcome to the Profitable Painter podcast, the show where painting contractors learn how to boost profits, cut taxes and build a business that works for them. I'm your host, daniel Honan, cpa, former painting business owner, and your guide to mastering the numbers that drive success. Let's dive in and make your business more profitable, one episode at a time. Today, I'm super excited to talk with Tara Riley. She has a huge amount of experience. I'm really excited to dig into all the knowledge that she has. Welcome to the podcast, tara. How's it going?
Speaker 2:It's going great. Thanks, Daniel. I really appreciate you having me on. This is such an important topic for our painting members and it's just great. I'm so glad to talk profits any day.
Speaker 1:Yes, excellent, and a lot of folks have probably heard of you already. But if you could kind of give folks like, what's your background in the painting industry, How'd you get started? What would have been some major milestones along the way?
Speaker 2:Yeah, great. So officially I got into the painting business when I took over as president of Fresh Coat Painters, the franchise about 11 years ago. I had worked in the trades prior to that, so I have about 20 plus years of experience working in home services, different trades but specifically painting was when I took over Fresh Coat Painters and obviously that gave me a wealth of information about, you know, not just one business but many businesses and scaling. So you know, franchising is an interesting world but I fell in love with the painting business and even though I've exited from Fresh Coat and now work with the APPC, you know I still love helping our painting contractors out there. It's so much fun.
Speaker 1:Yeah, so much fun. Yeah, and that's so you've. You basically dove into the financials and the operations of hundreds and hundreds of businesses Cause under Freshcoat you guys had a couple hundred or so and then, with Academy for Professional Painting Contractors, you're also working with dozens of other painting businesses and you've been able to basically dive into their numbers, dive into their operations and figure out what works and what doesn't. Is that fair to say?
Speaker 2:Yeah, absolutely. I think at Freshcoat we had, you know, we, when we grew the business, we grew it from about 15 million to a little bit over 70 million. In in the 10 years I was there, we had about 170 units. So we, you know what was fun in the franchising world. We were launching new businesses. So we understood what it took to launch businesses from scratch and ramp them up. But we also had scaled businesses and my passion, as you know, daniel, is about scaling. You know. It's really about working with businesses and understanding what are the barriers that stop you from having the business you want.
Speaker 2:Now this goes back all the way through my career in franchising, whether it was in painting or other businesses that I started with. It actually started way back when I worked with McDonald's, you know, and trying to figure out how to grow a restaurant profitably so that owner-operators would have, you know, the lifestyle and the profits that they wanted out of a business. It's something that I've been passionate about for a long time, even, you know, just running my own restaurants I've had. I had that in my background, but but you know, yes, we had Fresh Coat. We had that experience. We had, you know, the opportunity to help.
Speaker 2:You know, like I said, hundreds of business owners and at APPC we've got well over a hundred members. Right now, I personally coach 15 groups of various sizes and I also run our peer groups, and what's really nice about the peer groups is we really dive into the numbers with our peer groups. I obviously do with my coaching as well, but so there's another like 25 or 30 members that are in our high performance peer groups that we get to see their monthly numbers as well. So I I'm a numbers gal. You know that I'm a nerd when it comes to numbers and and because why are we in business if we're not there to make money right to numbers?
Speaker 1:and and because why are we in business if we're not there to make money? Right, yeah, absolutely. Well, I'd love to dive into the your your topic, which is uh, how do you scale, or what the things that prevent you from scaling? Can you just what? What are, what are some typical things that prevent folks from scaling to the level? Like you know, maybe you could take an example of, there's a common hurdles that happen like around 500 K to 750, there seems to be kind of a break point that's preventing folks from getting to the next level. Can you just give me your thoughts on what? What are the typical things that prevent folks from getting to the level that they want to be at?
Speaker 2:Yeah, you know that's a great topic. You know, and we all know there's that we call it an inflection point that's what I have always called it. Where people get there's sort of sticking points right, we get stuck, and that is absolutely true. We saw that at Fresh Coat. People get stuck right around that 500,000 mark and to me, and it's also, these things happen in all service businesses. It's not just painting, but what happens is it starts with a mindset issue, right? So the role of the owner changes dramatically in that when we start flexing from that $300,000 to about that $600, you know 300,000 are working heavily in the business doing it themselves. Nobody can do it better than me. You know, if it needs to be get done, it needs to be done by me, and our energy at that level is going as an owner is going into doing things.
Speaker 2:To get to that next level, you have to start to hire people, not just painters. But you have to. You can't we all have. You know, I'm sure most painting business owners have an S tattooed on their chest and you know cape and boots in the closet. They can do everything, right, we're Superman.
Speaker 2:But the bottom line is you're human and there's only so many.
Speaker 2:You have a limit to your human capacity and as the business grows, the demands in the big buckets of being able to produce, being able to acquire leads, to being able to sell and to administer your business all grow along with the size of the business.
Speaker 2:At some point you can't do it all and you need help feeling comfortable with that a lot and that's my number one barrier that I've seen with business owners in general uh, is that just not having a good comfort level with being able to hire somebody, delegate, you know, and not just delegate and disappear. That's one of our fears, you know. That's one of the things. If you don't know how to delegate and follow up and and, and you're not comfortable in that role, it makes it really difficult to get from that $300,000, $400,000 to $700,000, because that's where your role changes as an owner. You change from working on things to starting to work on people. It's like you're investing your time. Instead of investing your time in doing lots of things, you start to invest your time into acquiring and developing people, and that's a challenge for a lot of folks and that's to me one of the biggest barriers in that first inflection point.
Speaker 1:Yeah, that's a common thing I hear is for folks in that range is, you know, there's no good people, or like I can't find anybody to help me, or like just very, the labor market is down or something like that, something to that effect. What are your thoughts on those excuses?
Speaker 2:And that's a limiting belief that many, many people have. And I think, in terms of coaching, I've had to coach a lot of people through that and you know the thing is that if that's what you believe, you're right, you're going to, you're absolutely. You know. Whether you think you can or you can't, you're always right. You have to get through. That's the limiting belief that stops people from growing. Look, I've learned there are people out there and there are people in your social network. I mean, if you think yes and how, in that role, and start thinking about who can I hire and believe you're going to find them, you'll find them. I've never had problems finding people, whatever level I'm at. You know. If you have a question about that, just turn around and look at people you know that are running million dollar painting businesses, that are running two, three, five $20 million businesses. How did they get there? They have people so, magically, the people only exist in that particular community, or maybe they're just better at it than you are. I mean, hey, look, we know the fear, but I say that, um, you know, my comment on that is a couple of things.
Speaker 2:One of the I think one of the bigger fears of hiring people. Is this automatic? There's a checkbook fear, I call it. If I'm going to hire somebody, I don't I think about all of a sudden this is just an immediate drain on my cashflow, like I feel like I'm grabbing my checkbook. You know, I've got a check right here. I got it and I'm going to write a check.
Speaker 2:If I'm going to pay somebody, you know, $40,000 for the year, I'm like I'm writing a check for $40,000 and just handing it out no-transcript. If I'm going to invest in somebody, I want, I want that person to be self-liquidating, in other words, the the incremental growth of my business, because, I've added, this person covers their costs. Plus, I'm going to make 20% off of it at least, or more, and that's my rule of thumb in terms of hiring. So we always when, when we're going to do the math to see, okay, how much and people are shocked at how little incremental sales you really need to pay for somebody. It's not a big number, it's not. You think it's. Oh, I'm going to have to double my business. No, no, usually the number to cover that might be an additional 10,000 a month or something at the latest, at the highest, yeah, I think thousand a month or something at the latest, at the highest.
Speaker 1:Yeah, I think that's a useful exercise is, once you you're deciding to make that higher, identifying how much additional sales you need to make to cover that and which kind of tells you like I guess you need to basically grow the pie bigger. For you know you're taking a smaller cut of hopefully a bigger pie once you bring them on, because you're going to be able to focus your attention on things that are going to grow the business, as opposed to just hiring them and then hanging back. Unless that's your goal is to hang back, and I'm assuming here that you're trying to scale, trying to grow.
Speaker 2:Yeah, absolutely, and you may. Daniel, you're bringing up a great point, because there's really two values to hiring. One would be the scalability and growth. The other is lifestyle. So, as an owner, if I'm killing myself when a lot of our owners are, and I'm trying to relieve some pressure on that and give myself some more freedom and flexibility, I hire somebody to take on some of the tasks and activities that I've been doing gives you know, I may not. I may be okay with that, I may be okay with taking a lesser cut of you know of the business, but, like you said, if we do it right though the math works out really great. We take a smaller percentage piece of a bigger pie and you'll actually find out that the dollar amount we're taking is bigger. You're actually making more money and working less, and that's what we shoot for. We shoot for the math to say you're literally going to work less and make more.
Speaker 1:Sounds like a good deal.
Speaker 2:That's what we're looking for.
Speaker 1:Yeah, so mindset limiting beliefs are definitely a thing that hold people back from growing. What are some other constraints or bottlenecks that are preventing folks from getting to the next level?
Speaker 2:I think scarcity mindset, it's still in that mindset, it's knowing that you have to, you're going to send your money out hunting. We like to say, right, so you're, you're going to invest in the business and understand that, that that you've got to trust that the money's going to go out and bring friends back with it. Right, so we're looking for, like, if we're going to invest in marketing. So the next, usually the next, the people capacity is the first limiting belief, like I need to add some people. But then realizing that I may have to invest if I'm trying to grow aggressively and I'm trying to make the math work on, you know, paying myself back for that investment. Now I may need more leads. If I've been relying on, for instance, just repeat and referral business, am I getting enough leads to I get this increase in sales or do I need to invest more? The big I mean the big gap that we see is people don't understand the value of their business. They don't understand the value of their lists. You know it's a. It's a big, just gap that I see out there in the, and it's not just in painting, it was in all the trades.
Speaker 2:But the most valuable thing in our business is our customer list and there's a number of people out there that can't even just conjure up a list. But if you have a good list, then are you communicating with it? Because if you want repeat referral business, first of all you'll get some. But just because the wind happens to be blowing, you know. But if you actually nurture your list, you'll increase that amount of repeat referral significantly. We've seen that. I've seen that in the numbers. So that's the first place to start.
Speaker 2:And then you know, if you want to grow more aggressively than that, then you're going to have to put some money into outbound marketing and more of a cold marketing. Right, you're going after not just repeat referral, but now I'm going after those more expensive cold clients. But here's the beauty of that they're only cold once. Once they come in, now they're in your list. And the beautiful thing is, if you're working your list the way you should be, then it makes the value of that cold marketing even higher, because every customer you acquire now increases your list. I tell a lot of our clients say hey, you know, there used to be that old joke like the person with the most toys wins Well, in our world the person with the most customers wins right and the more customers you have on the list and that are viable customers, the more you can win, the more you can leverage that. So you know that's the equity of a trades business is absolutely the customer list.
Speaker 1:Yeah, and it's crazy how much it reminds me of that story. I think it's Henry Ford who they were like generating a bunch of sawdust from building, building uh model t's or something like that. And then he's like what do we do with all this? Actually they were just like throwing away the sawdust, but then they ended up taking the sawdust and like using it to uh sell another product. I forgot what it was kingsford charcoal, he that was that's right, in fact, the kingsford charcoal.
Speaker 2:That was the. In fact, the Kingsford charcoal brand came from Ford. He put a friend of his in business making charcoal and buying the because they had a lot of wooden parts, I guess in those old model teas. And yeah, that's a great story but it is, it's, you know it's. How do we make, you know, how do we make a viable business out of a scrap right?
Speaker 1:Yeah, and folks treat their customers like now on to the next one, like getting more customers, but kind of ignoring, like hey, you have this person who just paid you five $10,000, probably should use try to get more value from that relationship.
Speaker 2:Yeah, that's the. I consider that the transactional mindset we think of the business and that limits us in a number of ways, Like so, when we see the customer as a transaction versus an equity stake in our business, we treat that customer you know, we, we. It affects several things in the business. One is quality assurance. It's, you know, how do we, you know, how do we do we ever market to that customer? There's so many things. You know we don't worry about getting a, you know, getting a Google review, putting a, you know, putting a yard sign out. I mean all those things that swirl around realizing the value of that customer versus I'm just, I'm just onto the next painting project and that customer is down the line.
Speaker 2:I think people misunderstand how often people will paint if they know how easy it is. You know people think, oh yeah, they're only going to paint once every 10 years. Well, that's not really true. You know, I've, I've, I had, we've had customers in our database for fresh coat that painted something every year and not I mean I'm talking res repaint, not, not commercial, not property managers, I mean just a single, you know, residential customer so yeah, absolutely yeah.
Speaker 1:we have painting businesses that do millions per year and it's mostly referral and repeat work and folks just painting every other year year just getting more work done. So yeah, it's, yeah, I think your, your focus on the understanding, the value of your other list is definitely a good focus. So once you're it sounds like once you're kind of, you know, gotten the low hanging fruit from the list, then it's time to move to outbound, more outbound, aggressive tactics, I'm assuming, like Facebook ads or door-to-door or direct mail, like going out and finding people.
Speaker 2:Networking. A lot of people underestimate the power of networking. So I think you should be doing what I call your operational marketing, which is loving your list, making sure you have yard signs, your vehicles are wrapped, all the things you can do, you know, it's just you know. And and marketing to your own list. Then, it's, you know you should be networking, and networking works both in res and commercial. Then, um, you know, obviously digital outbound is the simplest, you know. So, google, lsas, um, you know it's.
Speaker 2:You know it's funny that space changes so rapidly. I mean this, all this gray hair on my head came from digital marketing. I'm pretty sure it's how much it's changed. I mean, I can remember one of the one of the first trades brands I worked in was a cabinet and floor refinishing company and we still required a yellow pages ads. That's how old I am, by the way. There was no internet, or the internet was just sort of it was out there but nobody was advertising on it. I mean we were still doing freestanding inserts in the newspapers and you know lots of, you know in marriage mail and direct postcards and you know all that. Uh, and you know it was that in that group we started to you know, started to have landing pages and we started realizing oh and vanity numbers and we started thinking, man, a lot of calls are coming from this internet thing. This is more than 20 years ago.
Speaker 2:But in the last 20 years, the amount of change just when I was at Fresh Coat. Year to year, the rapid change in digital and the constant change in digital. It's not for the faint of heart, but it is also the fastest way to get to people. So you know, first I can remember telling people whatever you do, don't advertise on Facebook. Oh no, meta is the place to be right now. You know you've got to be on Meta. Oh my God, you know it's crazy how fast that changes. But that means the average owner needs help.
Speaker 2:By the way and this is the other mindset you know, in order to grow, you've got to acquire expertise, you know. So the capacity capacities are things like human beings to do things. Can I get leads? You know, and we'll talk. We were talking about this earlier, daniel is. You know, how do we know where our gaps are? Right, you know. So whatever it is we, whatever our gaps are, we got to figure out how we're going to fill them. And I think we were talking about how do we determine where the gap is. You know, you have an acronym for gap which I like. I just think of it as okay, do I have enough of something? And so I start. This is where you know we can talk profitability, but I this is where I start like, how much can you produce every week? This is a.
Speaker 2:There's two big numbers that I look at for every client. One is first. Number one is gross margin. You know, are you job costing? Do you know what your gross margin is? Are you on top of that? I refer to gross margin as mama, as far as the KPIs go. Yeah, you know why do we call it mama? Because if mama ain't happy, no one's happy, your business isn't happy. And, as a coach, if your margin isn't right. That's the first thing we're working on, because you know, I've had I literally have had franchise owners and clients who come and say I need, I got to work on my marketing and I'm looking at their gross margin going. No, you don't. You want to dig the hole deeper, faster, because if you're spending money on marketing right now and you're only turning a 28% gross margin, we have a serious problem right now. That's not sustainable. So we got to fix that first. But assuming that we're turning a good gross margin now, it's okay.
Speaker 2:What, how much money do I want to make? And that's this is another mindset thing. I work with people in coaching all the time. It's like begin with the end in mind. It's okay to have a goal, to say how much money do I want to make? I think I think a lot of people think business just happens like that. You don't. It's in the Netherlands and I don't really control anything, I'm just out there operating.
Speaker 2:The bottom line is people who plan, who write plans, who write business plans and say and say I'm going to drive to an end result, get there. I have very few clients I've ever worked with who actually write a reasonable business plan that don't achieve it, you know, and it's because this is a great business to be in, to make money. I mean, that's one of the reasons I'm still here. It's because I felt once I saw that I was in restaurants for years and with little things, tiny little margins, with lots of work. And I remember the first time I looked at a trades business and I saw the bottom line and went what have I been doing for 20 years? I'm insane, you know. It's like I should have been in the trades. I mean. So here, I am right. I mean her ability to scale. It's like infinitely scalable. You don't. You're not. You know retail businesses are stuck in four walls and there's a ton of investment that goes to acquire these four walls and then turn a small amount of profit out of the bottom, the trades business business. You know you, you can scale it to you, tell me what you want to accomplish and it can be done. I mean, it's, it's, it's, I'm like it was mind-blowing to me, you know, when I saw that and this is again almost 30 years ago, but it's like you know, this is great. So.
Speaker 2:So you've got to look at, like, if I have a goal we were talking about, you know, let's put a big ass, big hairy goal out there. You know, five million, you're going to hit five million. You got to be able to produce a hundred million, a hundred thousand dollars a week, right, 52 weeks in the year, you know, you know, and some weeks, honestly, because of seasonality, you probably have to be able to produce 150,000 certain weeks, because you're not going to, you know, may not produce that, but we can get into that detail later. But you know, you, just if you look at the math and say, okay, can I produce, do I have enough physical capacity between w2, painters, subs, whatever, um, you know, to how can I produce this amount? Okay, if we say yep, then I have enough. You know, painting resources, applications, resources to do it. That's good. Okay, well, can I produce that? Or am I Well, do I have the pipeline to do it? Do I have enough backlog or do I have enough work coming in the door right now to be able to produce 100,000 a week, a week?
Speaker 2:And if I can, if I say yes, then I have to look and say, okay, if I'm not producing 100,000 a week but I have the capacity to do it, there's something broken in that scheduling or, you know, deployment of labor. We have a problem there, right? So we could say there's the problem. If I don't have the pipeline. Then I start working my way back towards okay, can I sell? You know, am I what? Am I able to sell? Do I have the capacity to sell a hundred thousand a week or more? And we would have to look at that. And if I have the physical labor to do it but they're not selling, now we've got to start looking at marketing. Do I have enough leads? So you can really just work the business backwards and say and I love to pivot it because, at the end of the day, the profitable production, weekly production, is.
Speaker 2:You've got to hit that If you're not hitting that you're not going to hit your goal, you're not going to be able to cover your overhead, whatever. So that is a critical kind of I I think just sort of a flow chart and you'd look through the business and say you know you had. All of this has to be in balance. If you're producing, if you can produce 200, a thousand a week, but you're only selling a hundred thousand a week, at some point you're going to deplete your pipe and I've had clients have this happen where they deplete, they don't catch that they're depleting their pipeline too fast, they're not backfilling it and all of a sudden they run out of work. That's not a situation we want to be in, because you've got this big machine that we're trying to feed and all of a sudden it comes to a screeching halt. I've seen issues with pipeline where we get lulled into a sense of complacency in a bigger business. We get lulled into a sense of complacency in a bigger business. I've had somebody have a $2 million pipeline but because of timing and not paying attention to what was the timing of this, pipeline run out of work in the immediate. So we have to look at pipeline and say how much of this is available to be completed now. I mean, res repaint in general is pretty much now, but you could have.
Speaker 2:I had a res repaint plant who had, you know it had a really nice look like. It was a nice pipeline, four hundred thousand dollars in a pipeline and we were going into winter and realized all four hundred thousand of that was exterior, uh, no interior. Then it's like, oh, you know, it's like so we have to. You know, you have to look at now you, you know that's the dissecting the pipeline to make sure you understand, like, okay, what's in my pipeline? Can I produce it right now? And then going to say, you know, and then, based on that, am I marketing in the right areas?
Speaker 2:You know, like right now, right now, for anybody north of the freeze line, you need to be thinking about winter, and that's the other thing. Business owners need to be thinking six to 12 months ahead, and that's. You were asking me things that limit people from being able to grow. One of them is constantly being focused on the now and forgetting to be. Your job as the owner is to be constantly six to 12 months out. So right now you should be thinking about how am I going to be above, break even and and feed my team and myself in that I call it the dark quarter, which is really of November, december, january. With the holidays and everything going on, it tends to be a just a challenging quarter for everybody. So, yeah, so.
Speaker 1:So how just you were talking about booking out. How far should folks be booked out for residential repayment? Do you have like a range like they should be like three to six weeks booked out or like, or is it just pretty much dependent on what their goals?
Speaker 2:are for when they're booked out. But here's the thing we know from statistics that there's kind of we call it the rules of three. Right, as far as maximizing leads and maximizing conversion of leads coming in and producing work, you need to be able to. You need immediate response to a customer, to a lead. You know we used to say three minutes at the outside and I mean that but live answer with a ability to schedule you need to be able to do, to generate and deliver the estimate within three days. I mean, and you should, honestly, you should be delivering it on the spot. You know you should be a one call close.
Speaker 2:Every delay, every little delay you have causes your numbers, it causes inefficiency. Right, if you don't answer the phone live, you're losing clients, that's. You know you're going to have a drop in your booking rate If you can't schedule quotes in a shorter period of time, you're basically you're going to have some of those drop off. You'll see it mostly in a cancellation rate. If you have a higher cancellation rate with quotes because you're booked two weeks out, that's a problem. And, honestly, completing work, you really want to be in that three to four week window being able to complete work and we saw that too. It's like you know, if you and that's people like, oh man, I only have a three, three month pipeline, you know the thing is that a three week, sorry pipeline, but that is what you know. If you, if you're farther out than that again, you're going to get cancellations. They're going to find somebody else. It's at risk.
Speaker 2:Anything that the further out something is is the more at risk it is. I, we had, I, you know this is you don't even think about natural disasters, but we had two clients with that, the hurricane that went through, the appellations and stuff. I mean we had two clients. I had one client had a whole pipeline of work. It literally get destroyed. I mean houses that were scheduled to be painted weren't there anymore. I, you know same thing. I mean just, and this, there were several of our clients that got caught with that. I mean you just don't, you don't think about that kind of stuff. But anything that's out in the future is at risk. The further out in the future it is, the more at risk. It is that three-week number and we saw that for years of tracking stuff at Fresh Coat. We would see that if you were more than three weeks out.
Speaker 2:Now I will say exteriors it's okay to book exteriors in the winter, for the spring. Just know that some of it might get canceled. But you know, you're, you're, you're moving your sales along. You know, bill, if you're in a again above the freeze line, if you're in, if you're North of the freeze line and you're you're just times a year where you can't do exteriors, it's okay to book those, you know, and have them, have them queued up for the for the spring and the summer. Yeah, okay with that pipeline. But you, but there's no, there's never, it never snows or rains inside your interior work. You want, you want to be able to turn that through pretty quickly yeah, I love the rule of three.
Speaker 1:So three minutes speed to lead, three days to quote it, like you're out there quoting it within three days and then three weeks to produce it yeah, that's an easy way to remember where you should be for the timing, so I love that.
Speaker 2:Yeah, and that's also when, if you're finding that you can't hit those numbers, you have a capacity problem somewhere. Like if you're not able to answer the phone live and book the quote within three minutes, then you either need to you know a call center we would require a call center, obviously with franchising. But you know A call center, we would require a call center, obviously with franchising. But if you're not able to do that, then you have a capacity problem there. If you can't get a quote done in three days, it's time to hire a salesperson, right, and if you can't produce the work.
Speaker 1:if you're six, eight weeks out, you need to hire more crews Period. That makes sense. So we talked about the constraint of not having enough customers and then this one's kind of getting out you don't have enough of a team to produce the work that you have. So if you're not hitting those, those benchmarks of three minutes, three days, three weeks, you'd be looking at hiring more training or maybe training in your current team, whatever it is to, to get your capacity up to produce the work, because when you produce the work, that's when it becomes revenue on your profit and loss.
Speaker 2:Yeah, absolutely, and I think there's again a mindset shift that people have is, I think when we hire we feel like immediately I have to give somebody 40 hours and the best operators I've ever seen, you know, have deep lists. You know Brandon calls it a black book of painters. But you should be constant, you should always be interviewing painters, you should be assessing them and you should be, you know, keeping just like your customer list, having a list of painters. I had a franchisee in Fresh Coat who had over 100 painters in his um, basically in his book, when he needed if he had got a big project in it. Basically he let him know and said, hey, you're on my list. And then as we grow and I need somebody, and if I call you and you're on a project, there may be an opportunity to become more of a full-time. But these are part-time, these are W-2. They're not subs and he would just. You know, when he had a big project he had no problem. He said I'd never have a problem finding painters. I mean, like I said, he had over 100 names in that book.
Speaker 2:You know we have a tool called 30 Painters in 30 Days. It's designed for you to recruit and talk to at least 30 painters in a period of time. It doesn't mean you're going to hire them all, but you want to make a list of them. Now, some of you make a list with a big mark that says never hire. It's like we're not hiring this person but at the end of the day, most of the time it's just hey, if I feel like I know, I can, you know, make those calls.
Speaker 2:I have that list. I've had. I mean because I've had people turn down a big project, because I just don't have the people to do it. Like you know, okay, your marketing worked, you got the, your networking marketing worked, you got the opportunity to do a large project and yet you're limiting yourself because you're afraid you can't hire, and you know. So having the names of that, having the names of good subs, you know, depending on your state and what your rules are, but all those things give you more freedom and flexibility to be able to grow and scale your business.
Speaker 1:Yeah yeah, that makes a lot of sense and I feel like I'd be remiss if I didn't go back and talk about Mama gross profit. What do you, what do you look for in gross profit? Do you have a certain like like, what should folks should be shooting for, or what are your thoughts on that?
Speaker 2:The most important thing is knowing where you're at and job costing like job costing every project knowing where you're at and wherever you're at, we need to figure out how you can be higher. And so obviously, different segments of the industry lend itself to slightly different gross margins. You and I were talking about the ratio of margin to customer acquisition costs. Well, the customer acquisition costs in commercials is much different than the customer acquisition costs in res repaint. So you know you start needing to look at your business in segments. But in general, that's the number we throw through and you threw out. I always say you really should always be targeting 50, you know, for you know in general, just be targeting it and working your way towards that, but it's whatever it takes to be profitable.
Speaker 1:Right, it's a good starting point. 50% it's. It's an easy, especially if you're getting started.
Speaker 1:It's an easy thing to wrap your head around with markup, like if you're just getting started double everything double everything, yeah, and then from there it's that's the the way to start, like, if you're just getting started, double everything, double everything, yeah, and then from there that's the way to start, and then you can build it from there. And then there's folks that I know we work with that hit like 65% gross profit consistently, which is crazy good, but it obviously takes many, many years and a lot of hard hard work and, uh, you know proof testimonials solid sales process and solid production process. But, uh, cool. Um well, I want to be cognizant of our time and, uh, you've been super generous with it. I really appreciate, um, everything you've shared. It's been super informative. I've learned a lot and I'm positive that the listeners have as well. Do you have any last thoughts or anything that you have going on at the Academy for Professional Painting Contractors you'd like to let folks know about?
Speaker 2:Yeah, we've got a couple of things going on. Obviously, you know, our big annual event, which has always been well attended and people I think find a lot of value with, is our summit. That'll be coming up in January, I think right at the end of January. I think we start the 29th of January and 26th Hard to believe we're thinking about 26 already. So if you haven't ever had a chance to attend the summit, I highly recommend it, but on an ongoing basis.
Speaker 2:One of the things I'm really excited about and I got started here at APPC when I started two years ago is our high performance peer groups. No-transcript. Obviously, the APPC. If you need systems everyone in order to achieve the kinds of things we've been talking about, daniel, the key thing is we've got to have systems. You can hire people, but if you don't have good systems for them to operate, bottom line is they're not going to be able to achieve the kind of levels of profit that we're talking about. And the most important thing that really I think improves people's profit is being more efficient, and systems are what make us efficient. So, again, the APPC. We have systems for every aspect of the business and they're done for you. They're very easy to implement. You know, if you and if you feel like you need additional coaching to be able to get that done, we provide that as well. So you know we're here to help.
Speaker 2:You know, both Brandon and I and our team are very passionate about helping painting contractors and that's why I'm still here. You know, I've been in franchising. I was always passionate about helping business owners, but I really love this industry and I'm I'm happy to to help people. We'll be at all, I think, all the PCA events this year. So hopefully, if you, if somebody is going to the any of the residential, commercial and the expo will around for that as well.
Speaker 2:And women in paint I have to put a little plug in for women in paint To me. I was so glad to see the PCA pull up women in paint and I've been really happy to be a significant part of it and I'm looking forward to having that opportunity I think I'll be speaking at it again coming up, so I'm really looking forward to that event. It's great to see us lifting up all the women in the industry and it's a resource that everyone needs to tap into. You know, no matter what the ownership structure of your business is, there are a lot of really talented women out there that can help you with your business, so don't hesitate to hire women.
Speaker 1:Absolutely. And just to caveat on what you said, I've been to the APPC's events in January. They've all since, I think, 2018 or 2017 for a while, and it's amazing to see like the group of painting businesses that have grown just from. You know, when I first started going like a big business was like 751 million in revenue, and now they have folks doing millions and tens of millions there, and it's the same people that have grown over the last 10 years or so. So it's really cool to see what you guys have been doing over there at APPC, and we also have a lot of clients that are part of those peer groups that you mentioned as well, and I know that they get a lot of value out of it. So definitely highly encourage anyone listening. If you're looking for guidance on scaling to the next level, you definitely take a look at the academy for professional painting contractors awesome, uh well, I really appreciate your time today, tara, and for the listeners, we will see you next week thanks, daniel.
