March 26, 2024
Ask anyone today and most will tell a dollar does not go as far as last year, or the year before, and so on. As a small business owner, I can personally attest to this.
My core costs to doing business are going up. Labor, fuel, insurance, materials, general administration and more. All of them rising as a whole, with no end in sight.
As a painting company owner, I know this will affect you too.
Here’s what you’ll walk away within the next 6 minutes:
- Real Estate Impact
- Disposable Income Impact
- Where Painters Are Driven
- How this Affects You
- What to Look Out For
- The Bottom Line
REAL ESTATE IMPACT
As a quality painting company, when the market is good, referrals to do projects naturally come our way.
Right now there is no inventory.
In a recent Bankrate article, author Jeff Ostrowski when interviewing others if there is a potential housing market crash an interviewee said, “No. There are still far more buyers than sellers, and that means a meaningful price decline can’t happen: “There’s just generally not enough supply,” says Mark Fleming, chief economist at title insurer First American Financial Corporation. “There are more people than housing inventory. It’s Econ 101.”
With the loss of supply, there is a dramatic loss of referrals. Which means most painters are not working as much as before.
DISPOSABLE INCOME IMPACT
Last year Americans spent on average nearly 11% of their disposable income on food needed to feed the family.
In a recent CBS television interview, Jesse Newman a food reporter for the Wall Street Journal shared: “Consumers are telling us that they’re starting to do things like forgo treats when they go out to eat. So they’ll share a meal, or they won’t buy booze, or they won’t buy dessert. So it’s an uphill battle,” Newman said.
That idea to forego treats, alcohol, and more doesn’t just ‘stay put’ with food. As people ‘fold the penny’ with personal budgets around specialty foods they also look at other ways to save money.
Most homeowners cannot do their plumbing, electrical, HVAC, or other lines of work – so – painting, which has a long-held spot in people’s minds as a DIY process, gets extra scrutiny.
As for us, we are seeing people getting 4-5 proposals, on top of the proposal we provide. And today the price is King.
WHERE PAINTERS ARE DRIVEN
There’s a great spectrum of painting companies in the St. Louis marketplace. From the one-man band to teams of 50 or more. The range of painting companies is far and wide.
All of us are facing a tremendous loss of opportunities (real estate referrals and H.O.s with less disposable income).
As work requests slow, reflecting the economy, we as owners will make hard decisions. Like you, we will scrutinize every dollar spent, roll back on extras and we will find extra ways to save money.
Most importantly, it will lead the lion’s share of us to be extremely more competitive in seeking new projects. Since there are fewer of them to have overall, we will get aggressive. And this is where you come in as the consumer.
HOW THIS AFFECTS YOU
Let me share a very frank owner’s perspective.
I track the sales we make and the sales we lose. Of the proposals we lost in 2023, almost always, it was on price and price alone.
Truth be told, the lion’s share of quality painting companies in the area spend nearly the same amount for supplies and we all spend similar amounts per hour on quality people (what the market demands). We also have general administration costs which line up with one another. Good quality companies with many financial similarities.
That being said of the proposals I lost last year many competitor proposals were 40-50% lower than mine. In what was the same work – we lost on price.
This begged the question: How is that so?
What I learned from almost all of my competing proposals (ones considerably lower) they each housed a devil. That is the devil in the details.
WHAT TO LOOK OUT FOR:
If you receive multiple painting proposals and one, maybe even two, are considerably fewer here is what you should look out for:
- A Certificate of Insurance – Stuff happens. Yet what happens should a ladder fall and break something or someone get hurt at your home? Does your insurance or their insurance cover it? Make sure they can provide a legitimate COI which you can call to verify. (We provide a COI with every contract)
- References – Can the painting company provide you with a list of immediate references to contact regarding their most recent work? Are people willing to vouch for their service and quality? (We provide a list of 15 references with each proposal)
- Specific Product Outline – Sometimes to save a buck, a lower-priced competitor will provide a sub-par product. One they can use, to get the job done, but simply is not up to your quality standards. Make sure to get in writing, the brand, the color, and the sheen of a quality product. (We spec all Sherwin Williams products and provide you links to verify quality).
- Warranty/Guarantee – To what extent will your painter or painting company provide a workmanship warranty against defects, should there be any? Or, are you all alone the minute they leave? (We provide a 5-year workmanship warranty)
- Path of Dispute – Sometimes things don’t always go according to plan. If things were to become fragile and need a plan to recover, do they have one? Or are you again on your own? (Our warranty, our contracts, and our website all list ways in which we will work with you to make things right.)
THE BOTTOM LINE:
It’s really simple. There is a devil in the details. Especially if pertinent information or services are not being spoken about, written in, and then delivered.
Everything we provide has a cost. When a painting proposal comes in considerably lower than most, the cost has been greatly reduced, somewhere.
A considerably lower proposal means someone cut corners to bring you what they want you to believe “Is one Heckuva Deal” when in reality – it’s not.
It might be cheaper, but is it equal?
From our time in the field, it’s not apples to apples, so buyers – BEWARE.
