In these tough economic times, everyone is trying to stretch their dollars just a little bit further. As painting contractors, our biggest expense is labor, and if you find your budget pushed to its limits, you might consider instituting a pay system that encourages productivity and caps your labor costs.
Piece work is such a system. Under a piece work pay system, a painter is paid for the work he actually performs, rather than a flat hourly rate. For example, you might pay $10 to paint a door. If the painter can paint 2 doors in an hour, he makes $20 an hour; if he only paints 1 in an hour, he makes half that.
Such a system encourages efficiency. When a painter knows that his pay is based on finding a better way to work, he will likely do so. Of course, you must establish certain standards that must be met in order for the work to qualify as "complete".
Piece work must be priced fairly. The painter must have a very reasonable chance to meet the production times you use, or he will quickly become discouraged. So if you find that your painters have increased their speed by 10%, don't cut your prices--that money is a bonus for the painters.
For you, a piece work system caps your labor costs. For example, if you are paying $10 for the door to be painted, your cost is limited, no matter how long the door actually takes. Again, your prices must be fair and reasonable if you actually wish to provide encouragement.
A piece work system can meet with a lot of resistance. Your painters may think that you are trying to become a slave driver. Good communications are imperative when setting up the system, and input from the painters themselves will help with the "buy in".
If you find that your labor costs are out of control, piece work is one way regain control. And it will also give you some peace of mind.
Tuesday, November 24, 2009
Friday, November 20, 2009
Assigning Yourself the Proper Tasks
If you are like the typical small business owner, you never seem to have enough time. Between giving estimates, picking up paint, running a crew, doing the books, fixing the spray rig, going to the bank, and a myriad other tasks, the day seems to be over long before the tasks are.
There can be a lot of reasons for this, but I think one of the primary causes is simply trying to do too much. There are many tasks that can be outsourced, delegated, or simply dispensed with. As a simple example, I used to pick up all the paint for my crews. Invariably, I would arrive at the job only to be told that they needed a case of caulk. I wasted an incredible amount of time making multiple trips to the store. Since delegating this responsibility to the crew supervisor, I rarely set foot in a paint store and I don't have to worry about getting a gallon of paint at 5 PM so the crew can finish the job.
Just as you wouldn't assign a new apprentice to paint the customer's kitchen cabinets, you shouldn't assign yourself to tasks that are better suited for others. Concentrate your efforts on those tasks that truly require your attention and you might be surprised to discover that you have more time on your hands.
There can be a lot of reasons for this, but I think one of the primary causes is simply trying to do too much. There are many tasks that can be outsourced, delegated, or simply dispensed with. As a simple example, I used to pick up all the paint for my crews. Invariably, I would arrive at the job only to be told that they needed a case of caulk. I wasted an incredible amount of time making multiple trips to the store. Since delegating this responsibility to the crew supervisor, I rarely set foot in a paint store and I don't have to worry about getting a gallon of paint at 5 PM so the crew can finish the job.
Just as you wouldn't assign a new apprentice to paint the customer's kitchen cabinets, you shouldn't assign yourself to tasks that are better suited for others. Concentrate your efforts on those tasks that truly require your attention and you might be surprised to discover that you have more time on your hands.
Tuesday, November 17, 2009
Go to Work for Someone Else
I often see a new contractor ask for advice in starting his business. Invariably, he will get a number of suggestions telling him to go work for someone else in order to learn the business. This is about the worst advice that can be given.
Statistics show that 90% of the contractors in business today won’t survive 5 years, and nearly 99% will fail within 10 years. So what is to be learned from the typical contractor? You could learn all of the things that you shouldn’t do, but I can tell you many of those things right now. And you won’t have to spend years to learn it.
Here is a list of things you shouldn’t do:
I could add to the list, but the above covers the big items. So now that you know what not to do, are you any closer to success? Learning what the mistakes are doesn’t tell you what leads to success, only what leads to failure.
Working for someone else is a good way to learn how to paint. But if you want to learn how to run a business, chances are very good you could spend your entire life working for someone else and never learn that lesson. If you want to learn to run a successful business, study successful businessmen.
Statistics show that 90% of the contractors in business today won’t survive 5 years, and nearly 99% will fail within 10 years. So what is to be learned from the typical contractor? You could learn all of the things that you shouldn’t do, but I can tell you many of those things right now. And you won’t have to spend years to learn it.
Here is a list of things you shouldn’t do:
- Don’t depend on “word of mouth” for your marketing
- Don’t concern yourself with the “going rate”
- Don’t estimate by the square foot method
- Don’t use “checkbook accounting”
- Don’t think that good painting skills will make you successful
I could add to the list, but the above covers the big items. So now that you know what not to do, are you any closer to success? Learning what the mistakes are doesn’t tell you what leads to success, only what leads to failure.
Working for someone else is a good way to learn how to paint. But if you want to learn how to run a business, chances are very good you could spend your entire life working for someone else and never learn that lesson. If you want to learn to run a successful business, study successful businessmen.
Friday, November 13, 2009
How is that Working for You?
I generally try to avoid Dr. Phil, but I do like a line that he has made famous—“How is that working for you?” The basic idea is that if you are doing something that isn’t working out well, maybe you should try something different. We can usually see when someone else is spinning his wheels, but recognizing the same behavior in ourself can be more difficult.
The proof, as they say, is in the pudding. Are you getting the results that you want? If the answer is no, then you need to re-evaluate your actions. And more importantly, you need to re-evaluate your thinking.
Ultimately, our ideas determine our actions. What we think determines what we do. If we don’t change our thinking, we can’t change our actions.
For example, I once was consulting a contractor who was having trouble generating leads. “I’m doing retention and proximity marketing,” he said, “but I’m not getting enough leads. I’m running out of marketing money.” I suggested that he do door hangers, which he did. But he didn’t follow my advice completely.
When I suggested door hangers, I meant (and said) that he should hand them out himself. He was sitting at home waiting for the phone to ring. Instead of spending the day twiddling his thumbs, he should have been pounding the pavement. However, he found it easier to hire someone else to do this, at a cost that quickly depleted his remaining marketing funds.
This particular contractor refused to question his own thinking. He believed that doing door hangers was a different approach to his problem, but in fact it wasn’t. He believed that throwing money at a problem was the solution, and so he continued to throw money around, even as it dwindled. He didn’t change his actions because fundamentally he didn’t change his thinking.
The proof, as they say, is in the pudding. Are you getting the results that you want? If the answer is no, then you need to re-evaluate your actions. And more importantly, you need to re-evaluate your thinking.
Ultimately, our ideas determine our actions. What we think determines what we do. If we don’t change our thinking, we can’t change our actions.
For example, I once was consulting a contractor who was having trouble generating leads. “I’m doing retention and proximity marketing,” he said, “but I’m not getting enough leads. I’m running out of marketing money.” I suggested that he do door hangers, which he did. But he didn’t follow my advice completely.
When I suggested door hangers, I meant (and said) that he should hand them out himself. He was sitting at home waiting for the phone to ring. Instead of spending the day twiddling his thumbs, he should have been pounding the pavement. However, he found it easier to hire someone else to do this, at a cost that quickly depleted his remaining marketing funds.
This particular contractor refused to question his own thinking. He believed that doing door hangers was a different approach to his problem, but in fact it wasn’t. He believed that throwing money at a problem was the solution, and so he continued to throw money around, even as it dwindled. He didn’t change his actions because fundamentally he didn’t change his thinking.
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