Hey, it’s Brandon Lewis here and I cannot tell you how many guys I’m talking to through email and on the phone who are processing tons of work during the hectic summer repaint season, which is where we really rake in our net income harvest, yet they are not generating the profits that they want to be, meaning it seems like the more people you hire and the larger your company gets as you try to scale, profit margins dip.
Now, first off, I wanna let you know that there is this weird superstition that as you scale and as you add people, it’s impossible to maintain 30%+ net profits, but I’m here to tell you that is not the case. The secret is this. You have to make sure that your gross profits per project stay within the range that they need to. This means monitoring your labor budgets closely.
Let me give you a few tips that will allow you to come in budget consistently. It does mean that you have to bring to bear more than just a couple of influences, a couple of stimuli, on your guys, but if you do this I promise that you’ll come in on budget consistently.
First things first, make sure that you are tracking labor budgets daily and that you tell your men how long they have on each and every job. It’s the crew leader’s responsibility to track these labor budgets each and every day. If you’re not having conversations about labor budgets with your guys, they will go over.
Number two, you need to make sure that you’re incentivizing them by giving them a portion of the saved labor back, both crew leader and crew. It’s not just enough to add this in on paychecks. During your weekly crew meetings, you must absolutely recognize them. Applaud them. Do it in front of the group where they’re getting tons of recognition. When things go over budget, that has to be discussed, too.
Number two, give them notes of encouragement, atta boys in front of people, personal compliments about coming in over budget, and also bring the crew members in to elaborate on how they were able to achieve this miraculous accomplishment.
Finally, I believe that you’ve got two or three people that are working for you who are really competitive, yet you’ve never given them an outlet to display their competitive nature. That’s why monthly saved labor bonus competitions can produce amazing results because you’ve always got two or three guys that wanna be number one and they will fight so hard with each other that the amazing amount of labor that is saved will go directly to your bottom line.
What do we have here for coming in on budget? Monitoring, monthly reporting in the meetings, cash incentives to make sure they’re financially rewarded, public recognition, private recognition, and competition. If you really wanna move a metric in your painting business, it’s not enough to simply do what most painters do, which is either you come in on budget, in which case you’re never recognized, or we have to have some kind of uncomfortable conversation that’s not pleasant and isn’t constructive, or I fire you.
You go from zero to 60. Instead, take these graduated measures to ensure that your painting projects come in on budget. I’m Brandon Lewis with Painter’s Weekly saying while you’re making hay, also make sure you’re making money. Take care.