# When you're swamped do you raise your rates?



## Harry (Aug 4, 2008)

Van Damme raised a good question in another thread... he asked ...if you're swamped do you raise your rates?

My answer to this is...most likely.

If I see that I'm winning too many jobs, it's time to raise the profit until I stop getting jobs...then I even out again. It's a sensible thing to do and really is the way to raise the tide some.

I'll admit that this year has been really fun for me because I love estimating and well, this year, separated the men from the boys. I feel more like I'm making surgical strikes,than estimating 

It's the old, "watch your pennies, the dollars will take of themselves" deal and true, true, true. I see guys falling out of business like the plague because they can't make surgical strikes, they don't know their numbers well enough...shooting in the dark.

I can't stress enough how you guys will be sitting ducks if you're not prepared this year. Yes, I see an improvement coming but before that happens, the fallout continues...


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## vermontpainter (Dec 24, 2007)

Harry

I read something you wrote a couple of years ago, might have been published, but you made an analogy about a paint contracting business being similar to the process of building a boat and that the economic downturn was showing what kind of a hit these boats could take. That was a great analogy. Is it possible to have a yacht, or is it really only possible to be in a lifeboat?


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## Harry (Aug 4, 2008)

Scott,

Are you asking if it's possible to become rich in this business? Or are you asking if no one is safe right now?

Harry


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## johnpaint (Sep 20, 2008)

Each job is it's own island I think.I just take them one at a time.Try to make the most sense of it and bid to make the most money and still win the job.
I don't really bid the big stuff like some of you, but I just take them one at a time.


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## Harry (Aug 4, 2008)

johnpaint said:


> Each job is it's own island I think.I just take them one at a time.Try to make the most sense of it and bid to make the most money and still win the job.
> I don't really bid the big stuff like some of you, but I just take them one at a time.


How about a peninsula? it costs a lot of money for the ferry


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## johnpaint (Sep 20, 2008)

OK that will work.


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## vermontpainter (Dec 24, 2007)

Harry said:


> Scott,
> 
> Are you asking if it's possible to become rich in this business? Or are you asking if no one is safe right now?
> 
> Harry


Harry

Because you deal, I presume, with a lot of larger and healthy contracting companies, I am asking if the lifeboat mentality that we hear so much about on the forums is predominant or if it is still possible for well built paint contracting companies of any size or model to do well in this business in spite of the new economic climate?


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## Harry (Aug 4, 2008)

I can answer that easily but we ain't gonna like it, lol.

If you take a look at all the forums out there, you'll see that the larger guys aren't on them...


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## johnpaint (Sep 20, 2008)

Is there any larger guy's left?


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## Harry (Aug 4, 2008)

johnpaint said:


> Is there any larger guy's left?


Sure there are...


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## ewingpainting.net (Jun 2, 2008)

Define larger?


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## johnpaint (Sep 20, 2008)

Harry said:


> I can answer that easily but we ain't gonna like it, lol.
> 
> If you take a look at all the forums out there, you'll see that the larger guys aren't on them...


Should we feel bad that maybe they have other things to do or something? Are you saying we are not worthy?


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## johnpaint (Sep 20, 2008)

I just don't get this at all.


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## johnpaint (Sep 20, 2008)

With all the commercial guy's going under and all.


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## ewingpainting.net (Jun 2, 2008)

The ones I know have closed shop or have reduced under 50 guys


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## johnpaint (Sep 20, 2008)

Yes,who are these huge shops you speak of?


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## Harry (Aug 4, 2008)

It's the same on both sides. But hey...most of the commercial guys that I know who have folded, aren't any more business savvy than anybody else.

The guys who have healthy businesses right now aren't on these forums, plain and simple. They don't need to be.

And if guys who don't need to be here, ARE here, it's probably so they can help others...

For instance, from what I have learned about Vermontpainter, I believe that he enjoys helping here but don't believe that he NEEDS to be here. I'm sure there are others but I haven't gotten the names straight yet


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## johnpaint (Sep 20, 2008)

We are just small people with small minds. Please forgive us master.


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## TJ Paint (Jun 18, 2009)

a life boat and yacht look the same after smashed into splinters from a tsunami wave...



...only difference is there's less paper work to file with the life boat


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## johnpaint (Sep 20, 2008)

"The guys who have healthy businesses right now aren't on these forums, plain and simple. They don't need to be."

why do I not feel good about this?


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## VanDamme (Feb 13, 2010)

johnpaint said:


> We are just small people with small minds. Please forgive us master.


I dare ask how did we ever make it before internet forums were here to save us? :thumbup:


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## TJ Paint (Jun 18, 2009)

VanDamme said:


> I dare ask how did we ever make it before internet forums were here to save us? :thumbup:


or before the internet in general, to research products! I used to have to spend alot more time finding literature on diff products and surface prep issues, etc. Now its all there for you, if you know how to search for crap.


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## Harry (Aug 4, 2008)

johnpaint said:


> We are just small people with small minds. Please forgive us master.


Is that the self-defeatist part that VP was talking about?

Why is it that when I simply write some truth, you take offence. I'm not writing about something bad, I'm writing about something good..or in line with what you'd think...I hope.

I told you that the big guys who went out of business were no better equipped to fight this economy than anybody else...what part was offensive to you?

I'm on your side man, don't shoot me...


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## johnpaint (Sep 20, 2008)

Harry said:


> Is that the self-defeatist part that VP was talking about?
> 
> Why is it that when I simply write some truth, you take offence. I'm not writing about something bad, I'm writing about something good..or in line with what you'd think...I hope.
> 
> ...


I might be wrong, you are new to me, but it sounds you are working both ends against the middle, and you sound more to me that you are coming from defeatist mind to me on the contrary.
I have been wrong before though. I don't want to hurt anyones feelings, but I don't see painters being any different than any other group of people on the planet.I don't think we need to look down ourselves.


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## RCP (Apr 18, 2007)

Harry said:


> Is that the self-defeatist part that VP was talking about?
> 
> Why is it that when I simply write some truth, you take offence. I'm not writing about something bad, I'm writing about something good..or in line with what you'd think...I hope.
> 
> ...


Harry, you seem to be bringing out the beast/best of many lately!
Some good healthy debates, thanks:thumbsup:


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## Schmidt & Co. (Nov 6, 2008)

johnpaint said:


> I don't think we need to look down ourselves.


I couldn't agree with you more. To many of us look at ourselves as "just painters". I'm *proud *to be a painting contractor! I live, eat and sleep this stuff. Just look at how much of our off hours we sit here and "talk paint"...... :thumbup:


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## Harry (Aug 4, 2008)

johnpaint said:


> I might be wrong, you are new to me, but it sounds you are working both ends against the middle, and you sound more to me that you are coming from defeatist mind to me on the contrary.
> I have been wrong before though. I don't want to hurt anyones feelings, but I don't see painters being any different than any other group of people on the planet.I don't think we need to look down ourselves.


You're a good thinker but you're vibes are slighly skewed and I'll explain why...

First off, I deal mostly with the commercial and industrial sectors and you'll probably ask why I'm here, on a mainly residential board.

It's because my family painted for 103 years, I am the last of 4 generations. I am no stranger to any type of painting and I know what it's like to not have answers. I see a lot of questions. I see a lot of people who are frustrated. I see people who are losing everything. I see like you see.

Listen, my father told me ten years ago to STAY AWAY! from the residential forums, they won't listen. Well, I didn't believe him and ya know what? I have seen so many of my words and ideas floating around and that's good! It means that something stuck!

Now send me 5 dollars...


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## johnpaint (Sep 20, 2008)

OK, I think.lol


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## Harry (Aug 4, 2008)

John, I was looking at your site and some of your wording is great!

"I want to not only do a good job, but I also want to assist you in deciding on the right colors, and materials to turn your home into something special. I am an exterior and interior painter who delights in my customer satisfaction. Let me be your Portland & Vancouver neighborhood painter"

Many people don't realize that we're not selling a paint job, we're selling a dream. I learned that from a businessman named Richard Kaller...


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## ewingpainting.net (Jun 2, 2008)

Harry, 
Please tell me, define healthy company! Define larger company! I don't want a yacht, or a life boat. I want a speed boat. Does that make me a self-defeatist


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## johnpaint (Sep 20, 2008)

RCP said:


> Harry, you seem to be bringing out the beast/best of many lately!
> Some good healthy debates, thanks:thumbsup:


If that is true, I don't really understand the point, unless that is the point.


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## Harry (Aug 4, 2008)

ewingpainting.net said:


> Harry,
> Please tell me, define healthy company! Define larger company! I don't want a yacht, or a life boat. I want a speed boat. Does that make me a self-defeatist


Why are you asking me these questions? Vermontpainter posted about this specific stuff, not me...


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## plainpainter (Nov 6, 2007)

A healthy company is something very simple, it's a company that knows it's numbers and projections 1, 3, & 5 years out. 

Part of the problem the majority of us misunderstood, me included, is that the 'Numbers' also should include data about our customer base. Did any of us ever stop to ask - do we have a healthy customer base? You know what, when I walk into a wealthy home and ask what they want and I get this response 'I want cheap' and I hear that time and time again. Something deep inside me tells me to get the F out of residential.

Am I saying it's not possible to make millions in residential? I am sure it's possible, but it takes dedication to find the right clientele in the right areas - and to make sure that you are in a demographic where only like minded companies are bidding the same projects. If you go to a home and they invite Joe Schmo to bid as well - it don't matter if it's worth 2 mil, they're still inviting lowballers to estimate.


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## ewingpainting.net (Jun 2, 2008)

Harry said:


> I can answer that easily but we ain't gonna like it, lol.
> 
> If you take a look at all the forums out there, you'll see that the larger guys aren't on them...





Harry said:


> It's the same on both sides. But hey...most of the commercial guys that I know who have folded, aren't any more business savvy than anybody else.
> 
> The guys who have healthy businesses right now aren't on these forums, plain and simple. They don't need to be.
> 
> ...





Harry said:


> Why are you asking me these questions? Vermontpainter posted about this specific stuff, not me...


It's a simple question. I know where VP stand cause I know him. You make accusations saying there are none on the forums that have healthy/larger business's. Which is completely out of a donkeys azz. There are many healthy business's here at pt, I can spit out many at you. So I wanted to know what you thought a healthy business is by your standards. Maybe you don't have a healthy business yourself, your here. Or are you superior than us chumps?


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## Harry (Aug 4, 2008)

ewingpainting.net said:


> It's a simple question. I know where VP stand cause I know him. You make accusations saying there are none on the forums that have healthy/larger business's. Which is completely out of a donkeys azz. There are many healthy business's here at pt, I can spit out many at you. So I wanted to know what you thought a healthy business is by your standards. Maybe you don't have a healthy business yourself, your here. Or are you superior than us chumps?


My god, so emotional..LOL

Perhaps a few words can be edited but what I'm trying to say is that the large, healthy companies aren't here. And by large, I mean millions in sales. Now, if there ARE some of those guys here, they're either here for the comedy or they're here to help. They have people in place, doing things that need to be done, etc.

Look, I've made thousands of posts on painter forums in over ten years and my observations are as I wrote. You can be offended and get all emotional but it's the truth as I see it.

Why is it that in order to pump someone up, you feel that I have to throw someone down? It's apples and oranges. You may be here for fun and the comraderie and that's fine...nothing to do with the question that was asked of me.

This is a tough medium because most readers believe that a person's answer is "all encompassing" and portrays one man's view of everyone's world...not so. I'm trying to be specific but my words are getting dragged into the "universal arena" 

Show me the guys who gross millions on here and tell me why they're here. Perhaps I can learn from this exercise too...


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## ewingpainting.net (Jun 2, 2008)

I am from southern Cali, I won't even go and tell you the road I've been down in my paint career. But I will tell you there are few that's have millions in sales in general. Which is maybe 2% of all paint contractors. No emotions buddy. Just don like it when someone talks from the other hole. No need for an edit.


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## Dave Mac (May 4, 2007)

VanDamme said:


> I dare ask how did we ever make it before internet forums were here to save us? :thumbup:


 
I think a lot people are here to help and give great advice, but when they are doing it they are talking down to people, I see it a lot on here, owell it is what it is.:whistling2:


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## aaron61 (Apr 29, 2007)

Now I really feel stupid.Are you guys tellling me I shoudn't be charging the same to paint 6 panel doors @ Mrs. Smiths $2 mil house as Mrs. Jones $300,000 House???
So how do I account for the steady growth of my customer base & overall profit & sales every year?


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## Harry (Aug 4, 2008)

ewingpainting.net said:


> I am from southern Cali, I won't even go and tell you the road I've been down in my paint career. But I will tell you there are few that's have millions in sales in general. Which is maybe 2% of all paint contractors. No emotions buddy. Just don like it when someone talks from the other hole. No need for an edit.


Talk from the other hole? LOL

Go ahead, tell me where you've been. is it going to contribute to the conversation?


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## Harry (Aug 4, 2008)

ewingpainting.net said:


> It's a simple question. I know where VP stand cause I know him. You make accusations saying there are none on the forums that have healthy/larger business's. Which is completely out of a donkeys azz. There are many healthy business's here at pt, I can spit out many at you. So I wanted to know what you thought a healthy business is by your standards. Maybe you don't have a healthy business yourself, your here. Or are you superior than us chumps?


Try to contain your emotions. What are you, three? For crying out loud, let's stick to the subject without getting all warm and fuzzy.

I never said anything bad about you. If you took it that way, so be it...nothing I can do about that.

I'm here because I want to be here...I did nothing wrong...


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## plainpainter (Nov 6, 2007)

I'll answer the OP honestly - as most of the posts are just becoming trash. I have an excel spreadsheet and I log all my RFQ's with all associated information, pricing, date, type of service - and I keep track of my closing rates. My opinion - is since I am not in the market to increase labor to keep up with a higher volume of work - I choose to increase my profit margins instead. So if my closing rates go a bit high ~ 60% I definitely will raise pricing to close at a lower rate. Of course if the season winds down and I am getting fewer and fewer RFQ's - then I'll lower pricing to keep my closing rate high in order to fill my schedule.


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## vermontpainter (Dec 24, 2007)

Dan not withstanding, when we start talking about the true nuts and bolts of a healthy and profitable business, people start getting very, very uncomfortable.


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## NEPS.US (Feb 6, 2008)

Hire more help. 

Grow.


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## vermontpainter (Dec 24, 2007)

NEPS.US said:


> Hire more help.
> 
> Grow.


Can't find good painters
Don't know how to manage
No one can paint as good as me
I can't book myself out for 2000 hrs per yr, how can I have a helper
My customers will settle for nothing less than my brushstrokes on their colonial trim
Need I go on?


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## PatsPainting (Mar 4, 2010)

vermontpainter said:


> Need I go on?


Was getting good, Please do.


Pat


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## NEPS.US (Feb 6, 2008)

I'm sure someone will come along to tell me how increasing prices until the phone stops ringing is a much better idea that hiring more help and growing.


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## ewingpainting.net (Jun 2, 2008)

NEPS.US said:


> I'm sure someone will come along to tell me how increasing prices until the phone stops ringing is a much better idea that hiring more help and growing.


Were of the same mind set brother :thumbup:.


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## vermontpainter (Dec 24, 2007)

Harry said:


> It depends on where you are on the ladder!
> 
> If you have 50 men and don't want more men, there are alternatives and one of them is to raise prices. Do you know how many people have made the assumption that growing was the only thing to do...only to have built a monster they can't feed?


Harry

At what point, in terms of the size of a business (#of employees and annual gross) does volume actually become a benefit? There are some comparatively small outfits in my market and perhaps even here who can hoodwink themselves into believing that their low prices are offset by volume.


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## y.painting (Jul 19, 2009)

Harry said:


> It depends on where you are on the ladder!
> 
> If you have 50 men and don't want more men, there are alternatives and one of them is to raise prices. Do you know how many people have made the assumption that growing was the only thing to do...only to have built a monster they can't feed?


I was at 50 men...and then I started hiring women!


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## NEPS.US (Feb 6, 2008)

Harry said:


> It depends on where you are on the ladder!
> 
> If you have 50 men and don't want more men, there are alternatives and one of them is to raise prices. Do you know how many people have made the assumption that growing was the only thing to do...only to have built a monster they can't feed?


And there it is.

On one hand it is wrong to charge more for a room in a more expensive house but on the other hand it is ok to raise your rates because you dont know how to handle the growth or dont want it. 

This capitalism thing is confusing.

I'm fine with both. Raise rates for whatever reason blows your skirt up, just don't cut your nose off despite your face.


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## ewingpainting.net (Jun 2, 2008)

Harry said:


> It depends on where you are on the ladder!
> 
> If you have 50 men and don't want more men, there are alternatives and one of them is to raise prices. Do you know how many people have made the assumption that growing was the only thing to do...only to have built a monster they can't feed?


That would be due to the owner raising their salary rather than building ones capital


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## KLaw (May 8, 2009)

Harry said:


> It depends on where you are on the ladder!
> 
> If you have 50 men and don't want more men, there are alternatives and one of them is to raise prices. *Do you know how many people have made the assumption that growing was the only thing to do...only to have built a monster they can't feed?[/*quote]
> 
> ...


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## Harry (Aug 4, 2008)

vermontpainter said:


> Harry
> 
> At what point, in terms of the size of a business (#of employees and annual gross) does volume actually become a benefit? There are some comparatively small outfits in my market and perhaps even here who can hoodwink themselves into believing that their low prices are offset by volume.


I don't think there is a fine or definite line, do you? It's said that 20% of the painters in the country do 80% of the work, blah, blah, blah...meaning, we have such a vast array of gross sales out there and I don't know that being bigger or smaller has it's benefits as long as a company can stick to the rules.

What are the rules? easy...for one thing, the overhead percentage needs to be sufficient? I know this seems simple but I have a client who's overhead went from 300k to 580k but failed to adjust his OH percentage when bidding. Just happened to be a client of mine and now he's got a million dollars worth of work at a loss. Not a big loss but a loss.

Do I think that playing lean and going nuts on volume is the way to go? Hey, it's done all the time and many owners live well doing it. I do know that it can run people ragged as the hours get longer...but some love that.

Personally, if I were to do it all over again, I'd...well in this economy, we're on the fence...could go either way...either go nuts with gross sales at a low price or try to maintain a smaller comPany with healthy profits.

I don't think i really answered your question because I am familiar with both sides right now and each has it's advantages and disadvantages...


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## WisePainter (Dec 27, 2008)

Harry said:


> I don't think there is a fine or definite line, do you? It's said that 20% of the painters in the country do 80% of the work, blah, blah, blah...meaning, we have such a vast array of gross sales out there and I don't know that being bigger or smaller has it's benefits as long as a company can stick to the rules.
> 
> What are the rules? easy...for one thing, the overhead percentage needs to be sufficient? I know this seems simple but I have a client who's overhead went from 300k to 580k but failed to adjust his OH percentage when bidding. Just happened to be a client of mine and now he's got a million dollars worth of work at a loss. Not a big loss but a loss.
> 
> ...


small with VERY healthy profits FTW!!


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## NEPS.US (Feb 6, 2008)

KLaw said:


> NEPS.US said:
> 
> 
> > NEPS:
> ...


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## Schmidt & Co. (Nov 6, 2008)

NEPS.US said:


> KLaw said:
> 
> 
> > I was just getting back to the OP and was curious about the info you revealed earlier. This thread is about what you do when you get swamped. How does it work?
> ...


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## NEPS.US (Feb 6, 2008)

WisePainter said:


> NEPS.US said:
> 
> 
> > What do you pay per hour?
> ...


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## Harry (Aug 4, 2008)

vermontpainter said:


> Not to get it too sideways, but any truth to the rumor that tpn is the most recent acquisition of the wingate media group and that the transition included you becoming a moderator here when you hit the 100 post mark?
> 
> God I hope so. I am printing up Harry the Hatchet t shirts as we speak. Give her a good scrub down, Harry.


Hahaha...that is the best laugh I've had in awhile  Seriously, that was funny stuff 

I tell my students not to look at the students next to them because they may be a Russian spy...ya never know!


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## Schmidt & Co. (Nov 6, 2008)

WisePainter said:


> lol.
> 
> we are like a table at Thanksgiving comprised of all drunk Uncles...
> 
> ...


My God.... I'm going nutz trying to keep up with all the new posts!!!!


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## KLaw (May 8, 2009)

NEPS.US said:


> KLaw said:
> 
> 
> > I was just getting back to the OP and was curious about the info you revealed earlier. This thread is about what you do when you get swamped. How does it work?
> ...


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## vermontpainter (Dec 24, 2007)

Did y'all cats know you can get subs for $16/hr? :jester:


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## Schmidt & Co. (Nov 6, 2008)

vermontpainter said:


> Did y'all cats know you can get subs for $16/hr? :jester:


Always been leery of using subs for straight painting as its a red flag to be audited. Plus I sell myself of the fact that my crew are employees.


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## vermontpainter (Dec 24, 2007)

Sucks that wises posts all got swept under the rug. Dude was on a roll. Dissin on mods n such..


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## WisePainter (Dec 27, 2008)

NEPS.US said:


> WisePainter said:
> 
> 
> > Dont even waste your time packing up the heard. The answer is no.
> ...


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## WisePainter (Dec 27, 2008)

vermontpainter said:


> Sucks that wises posts all got swept under the rug. Dude was on a roll. Dissin on mods n such..


^look who needs some more attention...lol.

like a puppy who always wants to play with Wise...


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## ewingpainting.net (Jun 2, 2008)

WisePainter said:


> ^look who needs some more attention...lol.
> 
> like a puppy who always wants to play with Wise...


Can you go back in your bucket!


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## RCP (Apr 18, 2007)

vermontpainter said:


> Sucks that wises posts all got swept under the rug. Dude was on a roll. Dissin on mods n such..


We are all in the back room tallying up the deleted posts, high score gets a one week vacation away from PT!


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## Schmidt & Co. (Nov 6, 2008)

RCP said:


> We are all in the back room tallying up the deleted posts, high score gets a one week vacation away from PT!


Earning your "pay" tonight, huh?


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## WisePainter (Dec 27, 2008)

RCP said:


> We are all in the back room tallying up the deleted posts, high score gets a one week vacation away from PT!



fair would be to ban everyone with deleted posts, but hey, you have alliances to protect...amirite?


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## Schmidt & Co. (Nov 6, 2008)

WisePainter said:


> fair would be to ban everyone with deleted posts, but hey, you have alliances to protect...amirite?


My _suggestion_, for what it worth, is to remember this is just an internet forum. We don't _really _know each other. Why take things to such a personal level?


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## VanDamme (Feb 13, 2010)

RCP said:


> We are all in the back room tallying up the deleted posts, high score gets a one week vacation away from PT!


Uh oh! LOL!


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## CK_68847 (Apr 17, 2010)

Harry said:


> Van Damme raised a good question in another thread... he asked ...if you're swamped do you raise your rates?
> 
> My answer to this is...most likely.
> 
> ...


The bad thing about commercial is that its hard sometimes to raise your rates when you are bidding jobs a year or two down the line. If we are super busy and a home owner really wants to use us we might jack the price. But as far as commerical goes you are usually locked in and the way jobs are going these days none are ever on schedule so its hard to tell when youre going to be super busy.


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