When I first went into business, I was so excited to get contracts signed. I was giving a price that I thought was going to work (random numbers that I personally thought were reasonable) and when customers were hiring me, I assumed that was a success–especially when they told their friends about me and I got paid at the end of the job.

Like everyone in our industry, I believe in myself, and my team are very efficient and talented painters. But the one thing that was missing was that my bank account was never getting any bigger. I was wondering why I wasn’t making as much money as I thought I would be making as a trade-based entrepreneur.

So I started reading online and doing some research about making a profit as a painting business. A common denominator I would find while reading was “knowing your numbers.“ Other business owners talked about things like “job costing or job audits.” Or predicting profit, pricing for profit. I was reading about industry standards and metrics for this.

I had known a little bit about this but I had never really dissected this and truly applied it to myself.

It really started to stand out to me that I really wasn’t estimating things properly, especially for all the time and effort our team put into each job. I never looked back at my jobs after I collected the check.

So one of the very first big contracts I got was a very nice house in a very prestigious neighborhood in my service area. We completed phase 1, and phase 2 of the project, and naturally the customers were elated with the entire process – from my price, to my painters, to our quality and craftsmanship, and start to finish they gave us 5 stars.

Several months passed, maybe perhaps even a year after we completed the project, I decided that I needed to start “job costing“ and putting into practice what I was researching.

So I took all of my payroll for that job and all of my receipts for material on that job added them up and then subtracted that total from the invoice amount.

After I saw the final number, my heart sank.

Everything was perfect at that project, except at the end of the job I realized that I actually finished that job in the negative. I spent more on the job than I collected from the customer. I lost thousands of dollars on that project.

I was randomly making a profit in some jobs and losing on others.

I then realized that I was not a profitable business, and if I’m not profitable I can’t take care of my employees or my very own family.

I realized that even if we are the best painters in town, with the best paint, and the best tools, the best service in town, if I don’t make a profit at the end of the job, my business won’t stay open. Nothing else matters at that point.

It’s a constant learning experience for everyone, and naturally I’m still learning and applying this to my business.

Estimating properly, knowing my “break even” number, and job costing are the most important things now when I’m estimating new jobs. These numbers now allow me to confidently give proposals. 

In my opinion, this is the most important thing.

Lots of other lessons I’ve learned and still learn but by far “knowing my numbers” is the most valuable and most important in my opinion.