Before I talk about how to start a painting business I would like to say a few reason why I started a painting business, and possibly why you should start a painting business. My favorite thing about a painting business is it takes very little money to start. Depending on which state you live in you can start it with as little as $185. My second favorite thing about a painting business is how quickly you can generate cash. If you have the right attitude and are motivated you can generate cash and be making profit extremely fast with a painting company.
Okay, so I am going to tell you how to start a painting company. This is just my opinion on the best way to start a painting business. My philosophy in this tutorial is doing it as fast as possible, with the least amount of work and cash. First I will let you know all the legal logistics you will need to do to set up a painting business. Second I will tell you how to get your first job, and lastly I will tell you the process form start to finish of your fist job. So let’s get started!
To begin you will need to get all the legal logistics in place.
- Inform your state’s government – All this means is you need to register your business with the secretary of your state. I know this sounds intimidating, but it’s actually really easy. Just Google it. I live in Colorado so I just Googled Colorado Secretary of State. There will be a website where you can register you business. For Colorado it cost $50 dollars that you pay online with a credit or debit card. You will need to tell the state what type of business you are, you can talk to a accountant and lawyer if you want to know the pros, cons, and details of the different entity types. I recommend a LLC. I can write a whole other article on why, but to keep this simple LLC is going to be the best option for most starting out. Here is where you pick them name of your company don’t overthink it, you can even change it later if you think of a better one. If you can’t think of one, just to get it done, I recommend your [first name] Painting. So if your name is Bob Ross then Bob’s Painting.
- Inform the federal government – All this means is getting and Employer Identification Number or EIN #. You can Google that as well, basically go to page on irs.gov that gives EIN #’s and press “apply now”. In step one you pick what type of business you are (LLC). Here at step two you tell the federal government what state your are in and what type of business you are. It will then ask why you are applying for the EIN select “Started a new business” Then put in the information it asks about you and the business, and BAM you instantly get your EIN number!
- Open a bank account. – There are tons of banks to choose from, many offer free business checking accounts. Just go into the bank with the paper work you got from Step 1 and 2 (step 1 – articles or organization & proof your registered with the state, step 2 – your EIN number). You will also need ID and probably a little money to put in the account.
- Get a business license (if needed) – In many states like Colorado you do not need a license for painting, but some states like California you will. Again just Google if you need a license in your state to paint and if you do get one. Usually its not that tough to get a one, just remember one small step at a time. Luckily I live in Colorado, and didn’t have to get one.
- Get Insurance – If you want to be running a legitimate business, you should at least get liability insurance. I would get 3 quotes, keep in mind the big guys usually are the most expensive. I have had the best luck with a insurance broker that shops around and finds me the best rates. When getting quotes they will want to know what you think you will do in revenue and what you project paying out for labor and materials. Tell them the lowest number they will take, the lower the number the cheaper it will be. Try and get on a plan where you can make monthly payments and cancel at any time. Even if you have plans to do big numbers start small here, and then change it to big numbers later. Cash is vital early on when starting a business, so if you can keep some in your pocket when starting and pay up later, do it. Workers compensation is another type of insurance, it is basically medical insurance for any one working in your company that will kick in if they get hurt while working. If you are the business owner and don’t plan to not have anyone work for you, you can “opt out” of workers comp and not get it for yourself (you would use your medical insurance if you got hurt). If you hire an employee you need to get it. You will pay a percentage of wages paid to the employees for the insurance, but they usually want a big down payment and to lock you in for a year. For the philosophy of doing this cheap and easy don’t hire any employees. If you need people to help you hire them as a company not an employee. This is called subcontracting. You basically hire another company to do a task in your business. I will get more into the details of this in step 7.
- Become profitable – You do this by getting your first paint job and taking a deposit. I know that may sounds crazy impossible and hard, but it’s surprising easy. First find a neighborhood that has painted homes that were built 7-12 years ago, find one where it looks like everyone is going to be painting in next few years. HOA’s send letters to the homeowners when the homes are 7-12 years old (depending on quality of first paint job) telling them paint or we will fine you. Once you found a neighborhood like this print a map of it. Go when people are home, not a work, and not at night. Knock on every single door and say I am so and so with such and such painting, I am your local painter and want to paint your house. I would love to give you a free estimate. If they say yes set up a time to give them a free estimate. (I like to set up 5 estimates per day, you can grab their name and number and call them later to find a time). You would be surprised how many people will take a free estimate. In the right neighborhood with a good attitude, I have gotten 7 names and numbers in just 1 hour! If you can’t get at least 1 per hour, either your in the wrong neighborhood, or you don’t have the right energy. You can use the map to mark the people that were home and go back later to get the rest. If you don’t get a hold of some of the people in the neighborhood just mail them a letter asking if you can give them a free painting estimate. Then start giving free painting estimates. If your unsure on pricing in your area just do some research. If you nervous or unsure about pricing just bid on the high side of what your research said, homeowners don’t know the pricing either and if your price is too high I’ve found you should still book 1 out of 10 estimates. At the estimate all you have to do is tell them how much to paint the house and then ask them if you can do the job, don’t over think it. If they say yes, schedule the job and take a 30-50% deposit. In Colorado most exterior paint jobs are $3,000-$4,000. If you get a 30% down payment on a $3,000 job that’s $900, and BAM your profitable! You didn’t have to buy a website, or company vehicle, or any of that other nonsense. Think that’s not real or possible, I am just telling exactly what I did.
- Paint your first house. Again trying to keep things easy and cheap don’t hire employees. I actually painted the houses my self when I started, but later learned I can make more by hiring others to paint and spend my time booking more jobs, it’s a lot easier and safer that way to. So how do you get someone else to paint the house? Put an add on craigslist saying need painting subcontractors call or email me if interested. Depending on where you live you will get 10-50 responses usually in just a few days. Schedule meet-and-greets with the subcontractors. Pick the ones you like and have their insurance provider give you proof that they have insurance. They will send you an insurance certificate with your business name and address on it. It should list you as the certificate holder. If they are going to paint the house by themselves and not bring any one else to the job site then they only need liability insurance, but if they going to bring others they need to have workers compensations. The insurance certificate will say if they have it or not. Here is probably the best tip in this whole article ONLY USE SUBS WITH WORKERS COMP. Then once you pick a sub give them the details of the jobs and agree on a price you will pay them (usually between 30-50% of the job size). This way you don’t have to buy any equipment you just hire a subcontractor that has it all. Do not pay the sub until ALL the work is done, the homeowner is happy and has paid you.
- Repeat, Improve, & make more money! – Just repeat this process, and improve it. Now that you have this cash machine start investing the profits back into the business. I suggest into marketing, now you can buy the website, business cards, lawn signs, ect. Again the best part of a painting business is its easy to start and it quickly turns it into a cash generating machine! You don’t have to invest a ton of money and take loans. I would argue if you can’t do it this way, I don’t think you’ll have success other ways.
Lets recap the numbers here. Let assume you are in Colorado. You paid $50 to the state, and then $100 for the first month of liability insurance (you can actually get it less than that). You spent $35 on the craigslist add to find your subcontractors. Luckily you didn’t have to spend money on getting licensed. So it cost you a total of $185 to get everything you needed to book your first job. Lets say you booked your first job to paint the exterior of a home for $3,000 and you got a 30% deposit. You made $900-$185 right when you book your first job that $715. Then lets assume you spend 20% or $600 on paint and the materials needed to get the job done, and you pay the subcontractor 40% or $1,200 to paint the house. You collect the extra 70% or $2,100 from the homeowner when the painting is done. $2,100-$1,200-$600 is $300. So in your first month you have already made $1,015! That’s if you only do 1 job in your first month. Lets say you did 5 your next month, you make $1,200 on 4 of them if they are the same as the example above (no start up cost) and $1,100 on one ($100 for insurance) so you made $5,900 in just your second month, great now do 15 jobs in your third month….. whoa! That’s why painting is incredible some businesses take years to make that kind of money. Lots of businesses you go into debt immediately buying real estate, equipment, and other start up necessities and takes them years to actually have no liabilities on the books and be making that kind of money. So the lesson here is painting is truly amazing!