3 Reasons to Abandon New Construction Painting

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If you work in new construction as a painting contractor for any length of time, you understand the difficulties that you face in order to create the kind of cash flow and income you deserve. I’m going to give you three reasons you might consider abandoning the new construction painting market, and turn your attention to repaint. Brandon Lewis here with Painters Weekly for we empower painting contractors to become successful entrepreneurs. Here are the three biggest reasons you might consider shifting your focus to the repaint market.

Number one, there is zero equity in new construction painting. Let me explain. When you work for a general contractor, you do not own the customer relationship. I teach painting contractors all over the US, Australia, Canada, and the United Kingdom how to take their customer list and turn it into a perpetual stream of referrals and repeat business. Matter of fact, most repaint contractors still leave the lion share of repeat business on the table because they do not communicate with their past customers at all by email, phone, text, monthly newsletters, reactivation campaigns, you name it. But when you’re in new construction, you don’t even have the opportunity to do that. You see, the person who cuts the check is separated from you, and the relationship is owned by the general contractor. In many ways, you really don’t have a business, you have a job. And that equity cannot be piled up. It cannot be amassed in your customer list, and the systems that you use to keep that customer list continually repeating business and referring business to you. Therefore, you get to start over year after year.

Number two, lower margins. By now, you probably realized that there reallyisn’t much you can do to build value in new construction, at least not compared to what you can do to the sales process in repaint marketing. It is mainly a dog-eat-dog world where they’re extremely concerned about the bottom line. There might be a top 5% of GCs who really value quality. But for most people and most markets, that small slice of the pie is so tiny that being able to build margins is very difficult and challenging. Repaint are not the same way. You can build value in. You can charge a premium for your services if you market and sell correctly. You cannot do that in the new construction market, at least not to the degree that you can do it in the repaint market.

And finally, higher risk. Not only are you working where there’s zero equity; not only are you working where the margins are lower. In new construction, there is a much higher risk. The risk comes in a few varieties. The first risk comes in a way that you’re probably used to if you’ve done new construction, and that is with callbacks that are unexpected with tradespeople who mess up your work with the constant shuffling of the schedule both hurry up and wait. It’s very disruptive to a business. You can take a new construction project that should be profitable. But because of the picky superintendent, a picky owner, or a pickyGC, they can take that profit margin, what little bit of it is left at the end of the project, and gobble it up completely. Or other tradespeople can so mess up your schedule and get your crew spread so thin that you can’t get to the work in an efficient manner. You’re constantly trying to hop off one job to get on another.

The other risk that truly even higher in new construction is the risk of default. I do about 300 business assessment a year. And every year, I get on the phone with somebody in residential new construction or commercial new construction who have been literally bankrupted by a GC or developer going belly up. I do not hear those stories with my repaint contractors. In fact, I’ve never heard thatstory with the repaint contractors because typically, their portfolio of business is so diverse that if 1 client out of 100 or 1 client of 500 went bankrupt, it would not bankrupt them. But when you tie yourself too one or two GCs, where they’re 30%, 40%, 50% of your business, and if they over extend themselves,and they file bankruptcy, then you are left with all the labor expense for those jobs; all the material for those jobs, and no way to collect.

So those are the three big reasons that I would recommend that you look at, shifting your focus, maybe not completely, maybe not totally, but at least getting a plan in place so you can begin transitioning part of your service mix away from new construction and pointing it toward repaint.

And if I can help you do that, by all means, let me know. Leave a comment below this article or contact us on the contact us page, or you can reach me easily in our office any time, 24/7, at 423-800-0520. That’s 423-800-0520.

I’m Brandon Lewis, until next time. Look at your service mix. If it’s 100% new construction painting, please consider the lucrative, higher margin, lower risk repaint market.

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