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Doing it by the numbers

August 11, 2012

Doing it by the numbers.

 

Its time to start making the painting industry and the construction industry more transparent. 

What do I mean by that?

I mean building value in your products and services by making the costs in the labor more transparent to the prospect while building up the value of your (proprietary) products. It will help both the contractor and the customer and take away much of the distrust customer feel when choosing a contractor.

Start by showing people what it costs to pay your laborers.

  • How many of your clients realize that your workers compensation insurance costs 35% or more of the wages of that employee ?
  • Payroll taxes continue to go up every year and currently stand at 12% just for federal. That does not include state taxes such as Disability Insurance.
  • How many of your clients know how much of each job is in the cost of liability insurance. For many painting contractors it is as high as 3% per job.

If you sat down and showed just how many man hours went into a project, I think your clients would be amazed and comforted by the quality of work you are about to provide for them.

Let’s talk about the costs & steps of a premium 3 coat paint job with 7 preparation steps.

Cleaning a house properly is a two step process.

First you have to kill all the mold and mildew causing stuff that has built up on there. A mixture of bleach activator (Jomax), bleach and water will do quite well.

This is 1 man for 4 hours

Then after that dries you will give the surfaces a thorough high pressure washing with a cleanser to remove what is left of the dirt, grime and cobwebs.

On stucco homes pay attention to areas with chalking and carefully clean off any chalking or salty residue on the stucco.

This is 2 men for 4 hours

That is a total of 12 man hours total for cleaning.

Some old school painters believe that a hand scrubbing using TSP or other cleanser is a good intermediary step as well which will add another 4 hours each for 2 men.

The next step is to trench around the house and seal the substrate below the grade with a waterproofing material.

This is an 8 hour job for 1 man.

After that you must repair damaged surfaces.

This is generally the most time consuming part of the preparation of a house and can easily take 2 men working 2-3 full time days. Replacing rotted wood, re-floating crumbling and cracked stucco. Patching and filling other cracks.  Digging out rusty nails and other fasteners.

That is 32 man hours minimum and generally closer to 40 man hours.

The next step is scraping off old paint and sanding wood and metal surfaces smooth.

Depending on the amount of painted wood and metal surfaces on the home, this is at least 1 full day for 2 men. If there are a large number of wood windows you can often double this time

That is 16 man hours minimum.

The next step is to seal any bare wood you have had to replace or sand down earlier.

Generally speaking applying a waterproof sealant to bare wood is a 2 hour process for two men because it is generally fascia and other boards placed high on the home and requiring a ladder.

That is 4 man hours total.

Caulking is the next step.

Filling cracks and small holes in the wood and caulk around all windows and door casings to prevent moisture. This is an 8 hour job for 2 men.

That is 16 man hours total.

Masking and taping the areas that are not to be painted is the next step.

Depending on the number of windows and doors, this is generally a 8 hour process for 2 men.

That is 16 man hours total.

At this point you are a minimum of 104 man hours in for your laborers and you have not applied any primer or paint.

Now what does that mean in labor costs.

Most of the work so far has been done by laborers and not your crew chief.
That will generally mean someone making $10-14 per hour depending on region.
Lets just go with $10 per hour so we are talking minimum numbers.

104 man hours minimum x $10.00 per hour  = $1040.00
Total Salaries = 1040.00
35% of $1040.00 = 364.00
12% of $1040.00 = 124.80
2% of $1040.00 = 20.80
Payroll service = 40.00
Total Labor Costs = $1589.60

So on an average 1500 square foot, one story stucco house you have spent nearly $1600.00 in labor before you have even started putting primer or paint on the house.

On most of my jobs I also have at least 8 hours for the crew chief to add to that prep total at $24 per hour.

With workers comp, payroll taxes, liability insurance and other payroll costs that is minimum of another $300.00

So total labor and supervision costs for house prep alone = $1889.60

You still have at least 3 more days of 3 men at 8 hours per day to go.  A minimum of 72 man hours. The crew chief doing the spraying will generally make at least twice what your laborers are making. Mine all make $24 per hour.

So 24 man hours at $24.00 per hour and another 48 man hours at $10 per hour.

$576.00
$480.00
$1056.00

Total Salaries = 1056.00
35% of $1056.00 = 369.60
12% of $1056.00 = 126.72
2% of $1056.00 = 21.12
Payroll service = 60.00
Total Painting Costs = $1633.44

At this point you are over $3500.00 in labor costs

We have not even started talking about materials or sales commissions.

 

Does your customer know what these things cost?

If not, why not?

Knowing just how much labor goes into the job builds up the value of your service when they know what goes into it.

You don’t have to break it down into as much detail as I have here, but showing your customer that you will have 170-200 man hours invested in their home by the time you are finished with the paint job will certainly help explain why you are asking for $10,000 or more to paint their house.

It will help dis-spell some of the distrust of contractors.

It will make you stand out from the fly by night, back of the truck, low bidder contractors that many of these homeowners are used to working with.

Be the difference maker. Dominate your market.

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