Helping a $1.4M Painting Business Owner Increase Margin and Cash

We break down why lowering prices in a bidding war often backfires, and how a stronger sales process can lift close rate and protect painting business margins. We map out a practical path from better scripts and training to smart price increases, stronger cash flow, and more confident reinvestment. 
• close rate as the clearest signal for pricing power and margin protection 
• the founder close rate gap as proof the sales process lives in one head 
• building a repeatable sales script by recording calls and training daily 
• using the CLOSER framework to create trust and uncover real buying motives 
• adding a video sales letter to enforce consistency across salespeople 
• handling common objections without conflict and reinforcing decisions after the sale 
• raising prices in small steps once close rate stays above a target threshold 
• reinvesting profits based on GP to CAC to scale marketing responsibly 
• building a two-month cash buffer before attacking debt 
• improving cash flow with deposits, prepay incentives, and a maintenance plan 

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the content still works perfectly in audio form.

And if you ever want to watch the video version, you can find it on the
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https://www.youtube.com/@BookkeepingForPainters

Transcript

Margin Pressure And Pricing Fear

SPEAKER_00 0:00

I know your question is what should I do to raise profit and then what to invest in once I get that additional profit. But if you could just give everyone an idea of where you're coming from and what issue you're facing.

SPEAKER_01 0:14

I guess I'm worried I'm leaving a lot of money on the table in terms of profit, where I think my margins maybe could be a little bit higher. But there's a lot of stuff I'm hearing about. Don't be afraid to raise prices. We're in an inflationary environment right now. We should be raising our prices too, or where I act, I actually think I lowered my prices this year because it's so easy to get a paint quote when you come in and you're competing against two or three other bids. I don't want to be so much more expensive than other people. So we've actually lowered our pricing in the hopes to increase our close rate. But should I be raising pricing? And then also, I guess part of that too is with subs, they've been more often getting upset with how we're paying them. So then that starts eating into my margins as well. And I guess I'm just trying to figure out how I can get more laser focused on protecting my margins.

SPEAKER_00 1:05

Right. Great. So I was looking at your close rate. So correct me if I'm wrong, but it looks like over the last few months your close rate is about 33%. Does that seem right?

SPEAKER_01 1:15

Yeah, across between me and two salespeople on my team.

SPEAKER_00 1:18

And I noticed that your your close rate is a lot higher, which is natural. Usually the founder has a higher close rate than other sales people. But uh

Close Rate Data Reveals The Gap

SPEAKER_00 1:26

because I think your close rate is around 47%, and your salespeople were 20-ish percent.

SPEAKER_01 1:32

Is that I think one's at 22, one's at 30 uh 28, and then I'm at 46.

SPEAKER_00 1:39

So let's start. Do you have a script that you have them follow and are they following that script?

SPEAKER_01 1:45

No, I don't actually have a script for them.

SPEAKER_00 1:48

Do you review the calls? Do you have some sort of recording device that they have on them so that you can review the calls with them? No. Are you doing training every day to on a certain portion of the sales call to make sure that they're they know what to say on different points, like the intro, reviewing, do discovery portion, the clothes, do you train on different portions throughout the week?

SPEAKER_01 2:17

No, it's more I check in with them and ask and questions about how the estimate went. And sometimes I'll shadow them on an estimate, but I don't do Lily training, to be honest.

SPEAKER_00 2:28

All right. So I would given your situation and your close rate, and I would focus your efforts here, is basically just improving your sales process because it sounds like they're probably saying whatever they think is gonna work. Uh, however, you pretty much know what you need to say, right? Your close rate's a lot higher than theirs.

Turn Founder Instinct Into A Script

SPEAKER_00 2:49

So you have something that you're saying. Uh, you just need to take whatever you're saying, maybe record yourself during a couple of calls that you do, throw it into Claude or Chat GPT to say, like, hey, listen to the transcribe the last few of my sales calls, and then give me a script that I'm pretty much saying, take that script and then train your team on that script. Um, do you use some sort of uh sales framework?

SPEAKER_01 3:17

I just in my head, I know that my whole goal is to get them to like me and trust me because I think at the end of the day, there no one's assuming my painters are better than the competitors' painters. They just feel like I'm gonna do do right by them. And that's why they choose us.

SPEAKER_00 3:36

I would encourage you, maybe before you develop your script, is this to and you might be doing this kind of intuitively, but it helps to have a framework. There's many out there. The one that I've used a lot is the closer framework, which is C for clarify why they invited you to their house to give an estimate. Why are you there? What problem are they trying to solve? Are they trying to sell their house? Are they just trying to make everything beautiful again? Are they trying to

The CLOSER Framework For Trust

SPEAKER_00 4:06

fix certain issues with brotting wood? What is the reason why you are there giving them an estimate? Clarify why you're there. That's the C. Then the L is label that concern. So they're gonna tell you, you're you're gonna ask, so what made you call me? Why are you trying to get this painting done? They're gonna tell you, oh, we're we're trying to sell the house over the next couple months, and so you label them with that. So it sounds like you're trying to prep this home for a sale and get as as as high dollar as you can. Is that right? So you're just labeling them, so you repeat back what they told you and say, is that right? Or it sounds like you're trying to do XYZ. Is that right? Uh so that's the label, and then O is for overview, past experiences or past pain. So have you worked with any painting contractors in the past? Yes or no? Yes, we did, it was terrible. They did XYZ, and then you label that back to them. So it sounds like you've worked with painting businesses in the past and they started work and then they left, and then they came back, and the project ended up taking three months. Is that right? That sounds like that was not not that great of an experience. So you want to get that the past pain. What have they experienced in the past so that you can use this information for the close? And then the S is sell the vacation. So this is uh you can do sell the vacation when you put together the proposal, and uh, maybe you have a guarantee or something like that, and you're kind of pitching the offer, right? Uh, whatever your offer is. You can also use a video sales letter to supplement this part of the sales process. You can require them to watch a video sales presentation. So you could pre-record a video sales letter where you go through your painting business's process, what you offer in terms of a guarantee, what the process is gonna look like when you paint for them. And that's gonna be your way to in social proof from past folks you've worked with, testimonials, Google reviews. You put this in a 10-minute video sales letter, and that's gonna sell for you, do a lot of that ass for you, but then you have to repitch when you present the proposal. But this will be really helpful when you have salespeople too, because you that you're gonna require all your salespeople to use this video sales letter. And so you at least a portion of the sales script was uh done because you pre-recorded it and they gave the video, right? So that will really help garner trust, assuming that you have a decent VSL video sales letter. And then the E is for explain away their concerns. So you're gonna have you hear the same thing over and over again, right? Let me think about it. We're gonna get three other bids. You know, uh, it's more than I thought. There's these objections that you're gonna get, and so just having a script for handling those objections, and so this will look like usually some sort of framework to handle the objection. So acknowledging their concerns. So it sounds like you're concerned that this is higher than what you spent on the last time you painted. Is that right? No, I totally get it. So then so acknowledge, and then you want to associate that concern with something good. No, I totally understand prices have gone up, and I think it's smart of you to kind of watch your budget. We all got to do that, and I think it's smart of you to consider that fact. So you want them to make them feel good and not be combative with them, right? The reason why you're doing that is because you're gonna try to close again, and then you ask another question. So, can I ask you a question about that? All right, I know you said you you spent this is a lot higher than what you spent last time. Well, how long has it been since you've last painted? It's been five years, all right. So, over the last five years, paint has doubled in price. So, that's one of the reasons. And so you explain away their concerns, and then along with that, who did you work with last? You worked with XYZ company, you said you had a bad experience with them, right? So you just come up with uh explain away their concerns, have those different typical things that you're hearing scripted out, and then the last one is reinforce the sale, which is basically how are you going to make combat buyers' remorse? So you sometimes when people buy something, they second guess themselves and would I make the right decision. So you want to have something in the sales process to reinforce the fact that they made a good decision. That could be something like sending them just giving them a call and hey, super excited, I saw you, you just signed up with us, and I'm looking forward to providing you a great painting experience. I I sent you an email on the next steps, or send them a thank you card, whatever you can do to reinforce the fact that they made a right decision. So I would just take a look at the having a framework, like the closure process, number one. Number two, look at putting in a video sales letter into the process so that it you can know that this at least a portion of the script is being abided by because it's pre-recorded and you're giving it to all your salespeople to provide during that estimate. And then once you have the framework and the VSL, then I would put together a script and then require your salespeople to memorize that script and to be able to really breathe that script. So that's going to require a lot of retraining on that and drilling. So you probably would need to do daily training calls, 15 minutes, where you just practice a portion of the script together and just focus on just focus on the closer part or the clarifying part, or just focus on the close itself, or whatever part of the script in 15-minute increments each day to really enforce that training. And so that is the the high performing sales teams, that's what they're doing. They have a framework, they have a script, they often have a VSL, and they are doing daily sales training. And once you do that, you'll see your close rates go up substantially for those folks, especially the ones that are in the 20s, and that's gonna allow you to increase prices. And I would use your close rate as a signal for when you can raise prices. So if your close rate, typically folks are we

Use Close Rate To Raise Prices

SPEAKER_00 10:23

usually recommend around if your close rates are above 40%, you should definitely raise prices. So once your close rate gets above 40%, raise your prices by two, three, four, five percent, but then don't pay your your subs more than what more. You keep keep paying your subs the same, but then just raise your prices. So that increase goes directly to gross profit into the bottom line. And so you'll use your, and this is what uh Jason Phillips does out of um Dallas, Texas. He has a $15 million painting business. They use their close rate as a signal for when to raise prices. Whenever their close rate goes above 35%, they increase prices. And then until it goes back down below 35%, they continue to refine their sales process, train, improve, and get that close rate back up above 35%. If it's sustained over there for over 35% for more than a couple weeks, they raise their prices again. I think that's the biggest lever that you can probably focus on is it's the sales process, getting that close rate up, and then that'll allow you to increase prices.

SPEAKER_01 11:29

Okay. Then think about that raising that close rate would let me charge more, but that makes sense.

SPEAKER_00 11:35

Yeah. The other part of your question was what should I do to invest uh those profits in? To it's where where should I invest? Is that right? Yeah. I would say if you get this rolling and you have like a really good gross profit to customer acquisition cost ratio, which you have a decent one now, it's

Reinvest Profit Using GP To CAC

SPEAKER_00 11:56

not bad, it's like three to one over three to one. But once you improve your sales process, increase prices, maybe we can get it to four to one, five to one. And so that GP to calculate ratio basically means you spend one dollar to acquire a customer, you're going to get back three dollars, four dollars, five dollars in gross profit back. And that gross profit goes to you as profit. So I would say with the additional profits that you have is really go back into the business so that you can make more money, especially when we get that GP to CAC ratio even higher. Um, there's not a lot of investments that you can make where you can put a dollar in and then get five dollars back in 30 days, which is you know the dollar in marketing. You get an estimate, you close it, you produce the work within a couple weeks, and then you get that five dollars in gross profit back. If you have a five to one GP to CAC, yeah.

SPEAKER_01 12:57

How is using where would I be putting those profits to improve my GP to CAC ratio?

SPEAKER_00 13:02

I mean, right now the first step would be to use your current money that you have um to improve your sales process so that you can charge higher prices. Um then once you're getting even more profit from there and you have a really solid GP to CAC ratio of four to one or higher, then you can start using that additional money to just basically put back into marketing and uh and print money because it once you have a high enough GP to CAC ratio, it's basically a dollar of marketing cost comes back at you with four or five dollars of gross profit. That makes sense. Yeah. One of the things we have a few minutes left or a couple minutes left. Other things I noticed was your cash balance is a little lower than ideal. Um what hard to you just mentioned you should invest in in improving your sales process. Uh it takes some time and a little bit of money, but most mostly

Cash Buffer, Debt, And Getting Paid

SPEAKER_00 14:04

time. But uh what are you doing to improve your cash balance at this time? Do you have any specific strategies that you're doing to try to get that cash balance up?

SPEAKER_01 14:14

Yeah, the upmans I had to take on to get through the winter, and I'm spending a lot of time talking to Greg um this, you know, trying to find a balance between now that cash is actually coming in, paying off my debt, but also maintaining cash to be able to in the business. Okay. I'm still just trying to figure out that balance. Um that's kind of off the cash is paying down my debt.

SPEAKER_00 14:39

Yep. So I would say I believe your average overhead spend per month was around $37,000 per month. Just to say $45,000 per month and overhead spend, that means we we want to have at least two months of that as cash in the bank. So we would want to have at least $90,000 as cash in the bank. And then once we have that, because that's kind of buffer, like if something bad happens, unforeseen, customer doesn't pay you, whatever, some cash, you buffer for those things. And then after you have that two months of overhead cost as cash in the bank, then you can start aggressively attacking debt. You know, get that taken care of. But I would first have at least two months of overhead cost as cash. Okay. And uh the way you to get cash, obviously, prop profitability helps. You kind of the mid to long-term play is improving profitability. The the shorter term play to improve cash is basically to get paid faster and to slow down payments to others. Yeah. Paid faster would be take a higher deposit. How much are you taking for deposit right now?

SPEAKER_01 15:54

Uh yeah, like sometimes we're doing like new construction or stuff they insist on on less, and then um it's hard to collect those those progress payments.

SPEAKER_00 16:03

Yes. It's good that you're doing 50% on the the residential and then the new construction, yeah, it's gonna be annoying. So for another thing you can look at for residential is a hundred percent prepayment option. So getting paid up front in in total. Now check with your local laws. Uh, I believe New Jersey is good with that, but I'm not a lawyer. But if you have a prepayment option, you can basically you know gaster, which will increase your cash balance faster, right? Now, obviously, the challenge is how do you get somebody to prepay 100% of the project? So you can have basically look at your offer. What are you offering to incentivize somebody to prepay you the full project and up front? So things you can do to offer would be an on-time, on budget guarantee. So a lot of folks that work with contractors are they they get burned. You know, they'll come in, they'll start the project, then they'll stop the project, then they come back a couple weeks later, then they'll continue the project. And it's really not a great experience. So if you provide a on-time on budget guarantee that says, hey, if you prepay your project 100% up front, I have an on-time on budget guarantee where if we don't complete your project within two weeks, let's say let's say it's two weeks, you know it'd be done in a week, uh, not considering weather delays, but you know it's a week of of time. Um, you can just double it and say two weeks to give you a little bit of buffer. So if we don't complete your project within two weeks, not considering weather delays that we can't control, you'll get 10% refund on the project if you prepay the project up front. So they prepay the project as long as you get it done within a uh a couple weeks, assuming you think it's gonna take a week. Maybe you go over a little bit of on a week, but you're still within that two-week period. And you can obviously change that. You you control how long you say, right? So you can triple it if you feel more comfortable saying instead of two weeks. But um client, it it might be worth it because they've had such a bad experience in the past where it was just like drug on for two months, and they're willing to pay a little bit extra just so that they know they have that guarantee where you're gonna come in and do it quickly. And if not, you get they get a partial refund.

SPEAKER_01 18:24

Right.

SPEAKER_00 18:25

So uh on-time, on budget guarantee might be a thing to improve the offer there, and you can do other things as well to improve the offer to encourage 100% down payment, um, like paint upgrade, um, which is not that much money to you, but it's perceived as more um like do emerald instead of super paint or whatever. Um the uh the one would be a maintenance plan. So if you say do you have a maintenance plan by chance?

SPEAKER_01 18:57

We have a three-year warranty.

SPEAKER_00 18:59

Okay. A maintenance plan is basically like you'll come out every year and maintain the pro the like say the exterior. And your maintenance plan is we'll do

Prepay Incentives And Maintenance Plans

SPEAKER_00 19:08

a uh a softwash each year and a touch-up, you know, um, to increase the the love-year paint job. So it might up to double your so you can charge like a bucks a year for this to just send one person out there to do a softwash and do some touch-ups. And uh now you have a recurring revenue, right? Because that person's paying you every year. You you can get a payment authorization form up front, so you don't have to invoice them every year, you just get authorization up front with their payment method and then charge them every year that thousand dollars. And um, going back to the prepayment option, you can say, hey, we have a maintenance plan. If you want to sell the maintenance plan, you now can get the first year free if you prepay 100%. And so uh they get the first year free, which would be a pretty easy maintenance in the first year, assuming because you just painted it, and but it in the second year they just pay the thousand dollars, but you have their payment information and just charge the card, and you just keep charging their card until they they cancel, you know. That you can use that maintenance plan stacked in with your your to uh encourage that 100% down payment. Okay, all right, it was helpful. Yeah, it's really helpful. Thank you. Awesome. All right, sir. Um, well, gotta hop off for another call. Uh but we'll let you go. I hope you have uh good rest of your week. And um, is is everything going well with Greg and everything? Yeah, it's been awesome. It's been great. Good stuff. All right, sir. Well,

Wrap Up And Next Steps

SPEAKER_00 20:43

I would I wish you the best and uh look forward to seeing you maybe in one of the masterminds or something.

SPEAKER_01 20:47

Yeah, and chatting with you.

SPEAKER_00 20:48

Yeah, thank you so much, appreciate it. All right, have a good one.