By Steve Maxwell
OK, you’re paid to paint. But can you SELL your business one day? That’s the acid test of business ownership.
As a professional painter, you probably think of yourself as a business owner. But do you really own a business? Does your “business” pass the business existence test? It’s easy to find out. Just ask yourself one question: Could your painting venture be sold for more than the value of the equipment and vehicle you own?
If yes, then you’ve got a business. If not, then you’re the owner of a job, not a business. And while some of us consider being our own boss better than working for someone else, owning an actual business offers other financial advantages, too.
Do you fancy the idea of someday selling the goodwill, reputation, contacts and technical experience you’ve built up over the years? Do you like the idea of creating your own severance package for the day you’ve had enough of painting?
Creating a marketable painting business means you profit twice from your work – once every time you get paid for a job, then again when you decide to quit painting for good or move to another area. Building a marketable business does take a little more effort than painting alone, but not much. You really just need to work a little differently in key ways.
Why Should They Buy?
A marketable painting business doesn’t happen just because you’ve done lots of jobs over the years and have many happy clients. It doesn’t even happen if you’ve got employees. No, a marketable business needs to have something valuable to offer a buyer, and to make this happen you need to start thinking like the person you hope might buy your business someday.
What could you be doing now in the day-to-day running of your business to create an ongoing accumulation of tangible value for another painter who takes over from you? What could you provide that would make them flourish in the future? To begin with, it would have to save the new owner time, effort and uncertainty. A business worth buying would also have to shorten the time it takes to become fully skilled and profitable. All this is why a marketable painting business has three key features.
1. MARKETABLE FEATURE
A Business With Identity
All marketable businesses have a distinct, visible identity. Businesses have logos, they might have a motto, and every successful business has a unique selling proposition.
Building a business happens alongside your work as a painter, but it’s different, too. In fact, a marketable business must be different enough from you as a person that it won’t take away from some future sale of the operation. Even a business name as plain sounding as ACME Painting Co. is a more marketable brand than, say, Al Brown Painter. How attractive would it be to a prospective buyer of your business if they didn’t happen to be named Al Brown?
A logo boosts the marketability of your business big-time, and creating a logo these days is easier than most people realize. You could hire a logo artist and pay hundreds of dollars, or you could Google the word “logo maker” and make use of any one of the dozens of online DIY logo creation tools. I’ve used these several times and it’s amazing how well they work. You start with a template, add your own words, shuffle the details and arrangement a bit, and bingo: a serviceable logo that’s the foundation of your marketable painting business.
If you expect someone to pay money for your business, you need to do everything you can to capture client information and stay connected with those clients.
2. MARKETABLE FEATURE
A Community of Clients
If you expect someone to pay money for your business, you need to do everything you can to capture client information and stay connected with those clients. Repeat business is the name of the game. Not even the best paint jobs last forever, so there’s every reason to think of each project with a new client as the beginning of a long-term relationship, not a one-shot business transaction. Passing those relationships on to the new owner of your painting business is a big part of what they’ll pay you for, but you need to have those relationships in good order and easy to retrieve.
I’m all for computers, but you really should have some kind of hard cover journal to record names, phone numbers, addresses and job information. Take this journal wherever you go on jobs so you can capture raw client information in the field:
names, addresses, paint type and colours chosen and any personal details that might help you stay connected. A client list is gold for any painter looking to profit someday from the sale of their business, and a bound journal is an excellent way to reliably gather information in the field. The best I’ve found is called Everyman’s
Journal, published by Lee Valley Tools (800-267-8767; www.leevalley.com)
I’ve used these journals for years and they’re tough and top-notch. At the end of each day, week or month, transfer client information onto your computer, then back up this information off-site using one of the many free services. Only an idiot loses their client list (and most of their business equity) because of a hard drive failure.
Better than just a digital archive, keeping in touch with your clients by email newsletter every month or so makes a lot of sense. There are countless painters that clients can choose from for their next job, and the biggest reason they’ll choose someone other than you is because they forget who you are. It can be years between painting jobs, so it’s up to you to help previous clients remember you.
Mailchimp is my favourite tool for reaching a subscriber list via email, and it’s nearly as simple to use as an ordinary email program. Mailchimp is also free for lists up to 2000 subscribers, which is plenty of space for any small painting business. Interact with your clients even a little after doing a good job for them and they’re much more likely to become regulars. A list of clients is the most marketable part of your business.
3. MARKETABLE FEATURE
A Skills Transfer Process
Fully skilled professional painters almost certainly aren’t the market you’ll be selling your business to. Why would they be interested? They’re probably already busy, and if they’re not, something is wrong. No, your prospective business buyer will more likely be someone who knows something about painting, likes what they’ve seen, and is willing to pay you money to fast-forward through the business growth and building phase. They want to get right down to earning good money and they’re willing to pay for it. That’s why you need to include a teaching phase as part of your business sale.
If you’ve built your painting business right, and established ongoing client relationships, you won’t want to turn those clients over to just anyone buying your business. Committing to a business transfer period where you show the new owner everything needed for success in the field over a period of a few months helps both the new owner and the clients you’ve come to know. The best approach is for you to continue to receive all payments for the jobs completed in the transfer period, with the new owner tagging along and learning for free.
The world is filled with people who have many different ambition and enthusiasm levels, and that’s why building a marketable painting business isn’t for everyone. But if you’re as interested in business and profits as you are in your life as a pro painter, why not set things up so you can cash in someday on what you’ve built?