# Is a painting biz worth anything?



## Paint and Hammer (Feb 26, 2008)

- Business has a recognizable name and good standing with compensation board. 
- Registered
- Private....not franchised. 
- Business has a web presence. Steady leads. 
- Cliente list of minimum 20 'solid' customers. Mix of repeat customers, Property managers, realtors, GC's. 
- Past record of gross $150 000+ per year.
- Guarantee 'minimum' $50K gross for first year. (signed contracts) 
- 395, 695, Proshot, compressors, HVLP guns, ladders, and a plethora of random painting, 'stuff'. 

- material goods are worth what?....$1500-$2000?....do you think the other stuff has value?


***I'm not thinking of buying, nor am I thinking of selling.....just thinking....


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## DeanV (Apr 18, 2007)

Do employees come with the business?

Is everything systemitized so new buyer can expect same results (written down, lied, sales, and office)?

Is the current owner in the field?

To sell a business, It must be able to operate operate without direct involvement of new buyer. These are the biggest things based on a meeting where the speaker helped valuable and sell businesses.


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## Paint and Hammer (Feb 26, 2008)

DeanV said:


> Do employees come with the business?
> 
> Is everything systemitized so new buyer can expect same results (written down, lied, sales, and office)?
> 
> ...


Good points.

A past employee list comes with. No 'consistent' employment other than owner. (not on $150 000)....mostly random helpers and student summer help.

Most things systemized yes, books are set up.

Current owner in the field?? - where you going with that?


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## PressurePros (May 6, 2007)

If the owner works in the business it is worth what one could get for the tools and the website URL. 

The gross wouldn't really tell much. I would be looking at the net. Then I would subtract replacing the owner with all necessary labor directly from that net. If anything is left (I have looked at maybe 10 businesses in the past five years and not one of them had anything left), I would offer a multiple of 3 times that net.

Formula would look like this:
Company net profit + owner's salary - cost of replacing owner = true net

Replacing owner as estimator: $30K
Replacing owner as bookeeper: $20K
Replacing owner as laborer: $30K or more

There is no way that is coming out of a $150K gross. A half million, maybe.

That's not to say you couldn't sell it for more. You'd have to find a guy looking to cash in his pension and get away from working for someone. For those deals though, you usually need to hold some paper.


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## Paint and Hammer (Feb 26, 2008)

PressurePros said:


> If the owner works in the business it is worth what one could get for the tools and the website URL.
> 
> The gross wouldn't really tell much. I would be looking at the net. Then I would subtract replacing the owner with all necessary labor directly from that net. If anything is left (I have looked at maybe 10 businesses in the past five years and not one of them had anything left), I would offer a multiple of 3 times that net.
> 
> ...



I put gross because I figured you could funk up the net more. You'd have to look at the whole picture.

Interesting about "replacing owner as.....", forget about the hats we wear.



ps...completely hypothetical....toying with an idea.


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## DeanV (Apr 18, 2007)

Shoot, I had typed a reply and lost it. Basically what ken said, just not said as well.


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## RH (Sep 7, 2010)

Little in assets and you're selling a name - referred to as "blue sky". In effect you're selling someone a job. Anyone interested in purchasing will need access to funding other than a lending institution. Banks won't want to lend on a reputation and projected profits since there's no guarantee that they will continue.


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## NEPS.US (Feb 6, 2008)

This has nothing to offer that a start up could make on their own. 

The only thing of real value would be a name, phone number and a web site in which you could prove generates real leads on a consistant basis.


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## cappaint (May 24, 2011)

It could be worth 10k to the right buyer....like they said it generates no income unless the buyer is out busting his ass like you do.


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## Paint and Hammer (Feb 26, 2008)

NEPS.US said:


> This has nothing to offer that a start up could make on their own.
> 
> The only thing of real value would be a name, phone number and a web site in which you could prove generates real leads on a consistant basis.



Exactly!

This stems from an ad I saw on kijiji and I was thinking someone could establish something like this in a fairly short order.


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## PressurePros (May 6, 2007)

That's where, ironically, a franchise would be an easier sell. Not saying a franchised panting business is better per se, it is just more trusted by the general public and systematic.. ie less labor burden on the owner with better marketing support.


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## Lee Decorating Corp. (Oct 6, 2011)

researchhound said:


> Little in assets and you're selling a name - referred to as "blue sky". In effect you're selling someone a job. Anyone interested in purchasing will need access to funding other than a lending institution. Banks won't want to lend on a reputation and projected profits since there's no guarantee that they will continue.


When I came into the family business, my Grandfather was offered very little. Essentialy the business is worth the customer list and any assets of used equipment and trucks. 
Over the years, my accountant has given me a value of *** on the business for bank financing reasons. It is based on the profit. I laugh at him, because in all truth, I am the business. If I left it could not do the volume and quality(I do not mean to sound pompous).The customers are paying for me and how I run a business. I tell the acountant it is still basically worthless other than a customer list, equipment and the vans.
I have attempted to buy 6 competitors out over the years, they all way overvalued their business. All I really wanted was the customer base as everything else was of no use to me, especially the employees. 3 times it worked and 2 times I did not pay alot.The first time was for a major commercial account and I did overpay and have never seen a profit percentage large enough to cover my initial investment 14 years ago. 3 times they were gready and never sold to anyone and ended up folding their tents as I lost interest.


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## WisePainter (Dec 27, 2008)

NEPS.US said:


> This has nothing to offer that a start up could make on their own.
> 
> The only thing of real value would be a name, phone number and a web site in which you could prove generates real leads on a consistant basis.


With a base business capital start up amount of $20,000 to cover a vehicle, payroll for 3 guys, a lead, and ins. lic. getting up to speed would be easier than acquiring used equipment/people/clients who may or may not use you again (no compete clauses have rarely prevented a guy from selling you his business and STILL taking his best clients with him...).

what NEPS said.


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## plainpainter (Nov 6, 2007)

I don't know, I think there is value to a locally name-branded company. Name branding isn't easy - and when a company has been around for 30+ years, it has that edge that isn't easy to acquire.


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## DeanV (Apr 18, 2007)

But what took 30 years to build can be destroyed in 1 if the delivery changes. Also, with out the right processes, it could even be a money loser even though the original owner may have done fine.

Sent from my T-Mobile G2 using Paint Talk


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## Workaholic (Apr 17, 2007)

I have said it before and imo a painting business is only worth the equipment if there is not name recognition, customer lists, jobs on the calendar, system layout and a phone number. 

Of course the success is not certain but if you are buying something it should be worth buying.


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## NEPS.US (Feb 6, 2008)

There could be value in selling it to a employee that is willing to take the reigns and has knowledge in the day to day operations and the systems. IMO this is the only way to ever sell for any kind of value.


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## Paradigmzz (May 5, 2010)

As long as you throw in your new boat


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## Paint and Hammer (Feb 26, 2008)

Paradigmzz said:


> As long as you throw in your new boat



What you wanting to paint with that?!


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## PressurePros (May 6, 2007)

NEPS.US said:


> There could be value in selling it to a employee that is willing to take the reigns and has knowledge in the day to day operations and the systems. IMO this is the only way to ever sell for any kind of value.


Completely agree. That is my exit strategy. Train a guy, give him the reigns to make sure he can run the business. Hold some paper and collect checks. The business would be worth far more to him than to an investor.


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## vermontpainter (Dec 24, 2007)

PressurePros said:


> Completely agree. That is my exit strategy. Train a guy, give him the reigns to make sure he can run the business. Hold some paper and collect checks. The business would be worth far more to him than to an investor.


I know a guy in the Merrimack Valley with exactly that skill set.


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## plainpainter (Nov 6, 2007)

vermontpainter said:


> I know a guy in the Merrimack Valley with exactly that skill set.


There's a guy here from the Merrimack Valley that has sold his painting company before - maybe we ask him how much a painting business is worth?


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## PressurePros (May 6, 2007)

vermontpainter said:


> I know a guy in the Merrimack Valley with exactly that skill set.


I'm the one holding the paper and collecting the checks so already good there. The skills I need would be dedication, positive drive, and a willingness to do whatever it takes to be successful.. or else my checks won't be coming in for very long.


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## y.painting (Jul 19, 2009)

It's worth exactly what someone is willing to pay for it.

Which with good sales skills, can get you over 120K for something that's not locally established and without any of these fancy customer lists you guys are talking about.

\end sarcasm


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## DeanV (Apr 18, 2007)

y.painting said:


> It's worth exactly what someone is willing to pay for it.
> 
> Which with good sales skills, can get you over 120K for something that's not locally established and without any of these fancy customer lists you guys are talking about.
> 
> \end sarcasm



Notice the complete lack of growth in franchisees over 5 years?


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## plainpainter (Nov 6, 2007)

DeanV said:


> Notice the complete lack of growth in franchisees over 5 years?


I think the whole painting industry isn't conducive to expansion and growth. I don't know how true this is anymore - but the owner of the pratt and lambert store back in '05 told me that the largest paint manufacturer in the USA, Sherwin Williams, was only doing 4% of the total American sales. From paint manufacturers down to paint stores all the way down to paint contractors - it's always going to be a 'little' guy's industry.


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## vermontpainter (Dec 24, 2007)

It may not feel like it when we all sit here at the pt table, but its an industry.


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## WisePainter (Dec 27, 2008)

I say build a successor, someone outside the family and create a basic framework for them to one day apply their own personal style towards.

Selling it to them or not, price, and binding contractual what not, varies based on personal agreements.


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## Paradigmzz (May 5, 2010)

Paint and Hammer said:


> What you wanting to paint with that?!


Nothing, it's just a sweet boat. It would just sweeten the deal


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## plainpainter (Nov 6, 2007)

This thread just got chopped, why?


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## vermontpainter (Dec 24, 2007)

plainpainter said:


> This thread just got chopped, why?


Met the requirements of the PT PZ algorithm filter.


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## Paint and Hammer (Feb 26, 2008)

Paradigmzz said:


> Nothing, it's just a sweet boat. It would just sweeten the deal


I was diverting. 

Must be careful entering a deal with a Texan. :whistling2:



(ps...I have a story about playing boat frisbee that you'd find entertaining)


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

NEPS.US said:


> There could be value in selling it to a employee that is willing to take the reigns and has knowledge in the day to day operations and the systems. IMO this is the only way to ever sell for any kind of value.


I agree 100%, and went through that myself. Bought the business from my father January 1st of 2001. We were partners from 1990 (me being Mr. 40%) and I was the only one that the business had any value to. I knew the customers, systems etc. It was five years of payments, but I'm the captan of this ship now.


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## RH (Sep 7, 2010)

PressurePros said:


> Completely agree. That is my exit strategy. Train a guy, give him the reigns to make sure he can run the business. Hold some paper and collect checks. The business would be worth far more to him than to an investor.


I think I would avoid having to carry anything on the business if I could. Getting your money up front and being done with it would result in many less sleepless nights due to concerns that the business isn't doing well after you leave it. May be best to get your money and let someone else worry about what happens down the line. Although, carrying the loan themselves is often the only way many business owners are able to sell.


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## George Z (Apr 15, 2007)

I would not sell mine for a quarter of a million.
But to most, I bet its not even worth 10 thousand


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## DeanV (Apr 18, 2007)

George Z said:


> I would not sell mine for a quarter of a million.
> But to most, I bet its not even worth 10 thousand


yours is one of the few I would be interested in buying. But, then I would need to axe some office staff and would mess everything up 

Sent from my T-Mobile G2 using Paint Talk


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## premierpainter (Apr 17, 2007)

There is no real value IMO


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## PressurePros (May 6, 2007)

researchhound said:


> I think I would avoid having to carry anything on the business if I could. Getting your money up front and being done with it would result in many less sleepless nights due to concerns that the business isn't doing well after you leave it. May be best to get your money and let someone else worry about what happens down the line. Although, carrying the loan themselves is often the only way many business owners are able to sell.


In a perfect world I agree with you. In the real world there are investors that will buy solely based on net profit and there are technicians willing to put more on the line and work in the business to make it succeed. Since services businesses aren't worth much to begin with, there is little risk if you structure the deal correctly. 

My own business as an example.. I am like George, I wouldn't take less than a quarter million but lets say realistically I could get a hundred and a quarter. Who has that kind of money? Investors. An investor would have to learn the business, be the estimator, be prepared to fill in the gaps on crews. Wouldn't happen. That leaves maybe another business owner to buy me out. How many small businesses are sitting on $125K in reserve cash that will not affect his future if he spends it? Bank loan? No bank is gonna give someone a loan to buy a service business. 

Now what is left? Owner financing. But now I hold the cards. I want a down payment. I want collateral. I hold all title to everything in the business. Even with all of that, I want to know the person and his work ethic. 

The hidden gem in our businesses is the URL. It is very valuable virtual real estate.


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## George Z (Apr 15, 2007)

DeanV said:


> yours is one of the few I would be interested in buying. But, then I would need to axe some office staff and would mess everything up
> 
> Sent from my T-Mobile G2 using Paint Talk


You can axe me, save on OH. 
The office person I would keep. She earns her keep.
Seriously, I think the website and *its* branding is likely worth something.
Number 1 result on anything painting we like to go after.
There is nobody new(or old) that can beat this, 
as it is based on good SEO way too much on seniority, links 
and very well established citations.
That is worth a lot of marketing money.
A handful of painters are assets that I wouldn't want to do without as well.
I don't mean they are skilled. 
They are just the right people that took forever to find and grow


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## y.painting (Jul 19, 2009)

DeanV said:


> Notice the complete lack of growth in franchisees over 5 years?


I have. The economy has sucked.


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## vermontpainter (Dec 24, 2007)

DeanV said:


> Notice the complete lack of growth in franchisees over 5 years?


Anyone know what the total market share of franchises is in the paint industry?


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## RCP (Apr 18, 2007)

vermontpainter said:


> Anyone know what the total market share of franchises is in the paint industry?


That would be interesting, a break down of the size and types of paint companies.


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## y.painting (Jul 19, 2009)

vermontpainter said:


> Anyone know what the total market share of franchises is in the paint industry?


I can't tell if that's a rhetorical question?! 

But I would say that it's tiny. I don't have an extra 4 grand to buy an industry report for exact numbers, but I would venture to guess that it's well below 5%. 

Certa has a total of 379 US locations.
FiveStar has a total of 58.
FreshCoat has 71.
Protect Painters has 32.
360 Painters has 26.

That's not that many if you can make the leap and use number of locations as a proxy for market share.


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## PressurePros (May 6, 2007)

Scott, it has to be miniscule. Bureau of labor statitis says approx 450,000 people employed as painters with 45% of those being self employed. If we're conservative and say 200,000 paint "companies", then the market of probably the biggest franchise, Certa Pro is well less than one percent. 400/200,000. Not sure how that fares when gross dollars are compared.


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## vermontpainter (Dec 24, 2007)

It's a small %. No bogey man there.


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## PressurePros (May 6, 2007)

Its what I would expect. People get into painting generally because they grew up on it or they can afford the cheap buy in. Neither would be a candidate for a franchise. 

Here's a good listing that shows how strong an established company (over 30 years) with good branding and strong referrals will sell for:
http://www.mergernetwork.com/buy-businesses-for-sale/painting-contractors/pennsylvania/178518.htm

Versus a worthless franchise:
http://www.mergernetwork.com/buy-businesses-for-sale/painting-contractors/los-angeles/199818.htm

..........

Of course without the books, there is no way to tell what is going on in either of them.


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## Ultimate (Mar 20, 2011)

Tell it..



Paint and Hammer said:


> I was diverting.
> 
> Must be careful entering a deal with a Texan. :whistling2:
> 
> ...




Threads like this are fun.


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## Paint and Hammer (Feb 26, 2008)

FatherandSonPainting said:


> Tell it..
> 
> 
> 
> Threads like this are fun.



Agreed.....

Para is a big fan of disk golf so I figured he's get a kick out of our made up game of boat frisbee. My bro-in-law is a pro Ultimate player and he stood in the bow while we were moving at idle speed. Throw the disk as hard as he could, grab the bow rope and I'd throttle it, chasing the disk trying to catch up and catch it before it hit the water. (ummm, think this may have been thought up during happy hour on the deck) We played for about 1/2 hour and I realized we blew through a half tank of gas.....a full tank is $160! 

Most expensive game of frisbee I've ever played....


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## plainpainter (Nov 6, 2007)

Everyone here is always talking about the worth of their business. Ignoring our trade, just focus on stores in your downtown. I've seen everything from grocery stores, hair salons, clothes stores, fish markets, hardware stores, heck even a VW dealership with a 40+ year run with a huge reputation. And none of them were sold to new owners when the original owners folded up shop. I know a diner passed hands, tremendous reputation, but still it was the short order cook that it got sold to, probably more a gift than anything else. I am leaning towards businesses being sold to new owners are the exception more than the rule.


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## PressurePros (May 6, 2007)

Dan, that is the strangest conclusion I have read from you in the years I have known you. You actually believe that no businesses, especially bricks and mortar stores change hands for profit?


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## WisePainter (Dec 27, 2008)

PressurePros said:


> Dan, that is the strangest conclusion I have read from you in the years I have known you. You actually believe that no businesses, especially bricks and mortar stores change hands for profit?


I know people who have made a tidy profit investing in, then selling businesses.
Done deal.
However none were in the area of "skilled trades" or anything construction related.


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## Lee Decorating Corp. (Oct 6, 2011)

I use a carpet cleaning company for my house (Gold Star Carpet Cleaning- cheap plug). They do an amazing job. 2 years ago, they sold to the foreman. I continue to use them. If it was to a stranger, I am not so sure I wouldn't have shopped them. Nothing has changed. I am just as happy. In my case, I am sure, I will sell my company to a foreman one day as I have no sons. It will be basically a gift for the reasons I posted earlier.(unless I get a good offer from a PT member:yes


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## Dunbar Painting (Mar 19, 2010)

I really don't see how you can sell a business, if the sales FOR that business are largely related to YOU. For example, if you are the owner and although you are "out of the bucket", you spend your time getting customers and maintaining them, if you sell your business, your customers are going to be hard pressed to hire whomever you sell it to... UNLESS: you sell it to someone in your crew. That seems to me to be the only way to ensure your business will continue properly and be able to maintain a client base that you started with. That also means, in this circumstance, you can sell the business for more than the sum of tools + contracts signed, because your employee will realize they are getting customers they also know.


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## George Z (Apr 15, 2007)

I don't do most of the sales,
I don't visit most job sites.
In January or February I am leaving the country for about a month or so.
It should be interesting to see how things will run.
With the right people, systems and some good coaching
There should still be a company when I come back.


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## Dunbar Painting (Mar 19, 2010)

George Z said:


> I don't do most of the sales,
> I don't visit most job sites.
> In January or February I am leaving the country for about a month or so.
> It should be interesting to see how things will run.
> ...


I think I was referring to a lot of the smaller scale businesses where the owner has a few helpers, and/or 1 crew: so they are often on site helping out or doing stuff, as well as getting and selling jobs.

For the business that has "sales staff", "estimators" etc, this is further removed from the 1on1 relationship that smaller contractors can entertain, but because of its systematization, would be a selling feature if you were to sell the business.


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## George Z (Apr 15, 2007)

Dunbar Painting said:


> I think I was referring to a lot of the smaller scale businesses where the owner has a few helpers, and/or 1 crew: so they are often on site helping out or doing stuff, as well as getting and selling jobs.
> 
> For the business that has "sales staff", "estimators" etc, this is further removed from the 1on1 relationship that smaller contractors can entertain, but because of its systematization, would be a selling feature if you were to sell the business.


You are right then, what is there to sell?
The owner goes, the work stops. 
I think the discussion was starting to explore the possibillity of a business that can be sold.


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## plainpainter (Nov 6, 2007)

PressurePros said:


> Dan, that is the strangest conclusion I have read from you in the years I have known you. You actually believe that no businesses, especially bricks and mortar stores change hands for profit?


I am not saying that. I am saying that the majority of retail operations I have witnessed over the years tend to close down once the owners retire. Selling businesses to new business owners is something I have seen, but seems to be a minority. I knew a guy that purchased a paint and design center that was very successful in the 90s - and he had it for 2 yrs before it went out of business. And that demonstrates what I have seen as well, the businesses that do exchange hands - tend not to do very well. 

Right now, other than a landmark convenience store that's been around for over a century - I can't think of one business in my downtown that isn't original owner right now. There is a 'New-Age' book store from the 90s that was sold and is still in business today - but that's all I can think of.

I am just demonstrating a point that we focus on the saleability of a paint contracting operation - where as my anecdotal evidence suggests that very few of any businesses exchange hands in reality. Maybe it's different elsewhere - there is my favorite cafe on the coast I frequent that survived and is flourishing under new owners. But just tends not to be the norm. For every place I can think of that is 2nd and 3rd owners - I can think of 20-30 businesses that folded up shop once the original owners retired.


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## RH (Sep 7, 2010)

PressurePros said:


> In a perfect world I agree with you. In the real world there are investors that will buy solely based on net profit and there are technicians willing to put more on the line and work in the business to make it succeed. Since services businesses aren't worth much to begin with, there is little risk if you structure the deal correctly.
> 
> My own business as an example.. I am like George, I wouldn't take less than a quarter million but lets say realistically I could get a hundred and a quarter. Who has that kind of money? Investors. An investor would have to learn the business, be the estimator, be prepared to fill in the gaps on crews. Wouldn't happen. That leaves maybe another business owner to buy me out. How many small businesses are sitting on $125K in reserve cash that will not affect his future if he spends it? Bank loan? No bank is gonna give someone a loan to buy a service business.
> 
> ...


We're on the same page for most of this but I'll play the devil's advocate here and state that the down payment/collateral is the main problem in these sales. What type and amount would be sufficient? 

If it was cash, as the holder of the "paper" you'd want enough of a down payment so it would deter the purchaser from just walking away if things go bad. So, they would really need access to enough cash to fulfill two requirements: 
1) enough for the down payment to you, and 
2) enough funds to pay for their living expenses for _at least_ one year since 
much of their profit from the business will be going to you in the form of payments on the loan. 

The odds of someone interested in buying themselves a job in this field actually having enough cash to do both of these would be slim. And even if they did, why would they give it to someone else when they could use it to purchase new equipment and get their own business up and running - and using it to live off of it while doing so? 

If collateral were to be something like a house (very common not so many years ago), that also is an issue. Why would someone risk losing their house in one fell swoop if the business they purchased were to fail? That is a huge risk many would not be willing to take. Most people looking to start out in this type of work would not own their homes outright (if they even had their own house at all). Therefore you, using their home as collateral, might be the second or even third lien holder which makes the house worth considerably less valuable as collateral. They might even be upside down on their mortgage making their house completely worthless as collateral. 

Sure... it's possible you might find someone with a bunch of cash, or a paid off home, wanting to buy themselves a job as a painter and willing to risk it all to do so, but it's not likely. You, holding the paper on your own business without that down payment and collateral, would really have as much to lose, if not more, than the purchaser.


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## DeanV (Apr 18, 2007)

Selling to an employee would almost have to be a deal where the owner keeps profit for several years with minimal time investment. Probably better to hire a manager and have profits go to retirement income.

Sent from my T-Mobile G2 using Paint Talk


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## PressurePros (May 6, 2007)

researchhound said:


> We're on the same page for most of this but I'll play the devil's advocate here and say that the down payment/collateral (really the same thing) is the main problem in these sales. What type and amount would be sufficient?
> 
> If it was cash, as the holder of the "paper" you'd want enough of a down payment so it would deter the purchaser from just walking away if things go bad. So, they would really need access to enough cash to fulfill two requirements:
> 1) enough for the down payment to you, and
> ...


I can't really speak in hypotheticals because everyone's business is so varied. Relying on what I know, my own business, there would be plenty of money left for an owner paying a 5 year nut on $250K. 
$100K plus if owner did what I do.. estimating and selling. Marketing is on autopilot. 

This exit strategy has been planned for the last four years and was carefully designed by my accountant to meet my needs and be realistic for a new owner. I have been breeding my operations manager for the last three years to take over (homeowner, single). Unfortunately, as hard as he works, he could not get in tune with the business end of things and we parted company. He knew from Jump Street what the master plan was. If he couldn't save what I want as a down payment, that was on him and really told me all I needed to know anyway. I don't care if the down payment is $2000 as long as I know that he (or she) is taking a risk and could lose everything. That may sound harsh, but why would I settle for anything less? Business ownership is a risk. The rewards have to be the justification. If they can't, you have to work for someone.

Someone could start a business today in my market. They would need three years of cash reserve because let's face it.. no start ups make money the first three years. Its a constant cycle of reinvestment and making a name. Buy my business tomorrow with a note of $50K+interest per year and if you run things like I do in terms of efficiency and follow my systems, you will gross over $500K with nice margins $600K if you can sell and are aggressive. One does not compare to the other.


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## RH (Sep 7, 2010)

PressurePros said:


> I can't really speak in hypotheticals because everyone's business is so varied. Relying on what I know, my own business, there would be plenty of money left for an owner paying a 5 year nut on $250K.
> $100K plus if owner did what I do.. estimating and selling. Marketing is on autopilot.
> 
> This exit strategy has been planned for the last four years and was carefully designed by my accountant to meet my needs and be realistic for a new owner. I have been breeding my operations manager for the last three years to take over (homeowner, single). Unfortunately, as hard as he works, he could not get in tune with the business end of things and we parted company. He knew from Jump Street what the master plan was. If he couldn't save what I want as a down payment, that was on him and really told me all I needed to know anyway. I don't care if the down payment is $2000 as long as I know that he (or she) is taking a risk and could lose everything. That may sound harsh, but why would I settle for anything less? Business ownership is a risk. The rewards have to be the justification. If they can't, you have to work for someone.
> ...


Your experience with your operations manager illustrates perfectly the problem with trying to find qualified buyers in our industry.

I don't think anyone would want to settle for a down payment as little as $2000. Walking away from that would be nothing for most people. The amount has to be considerable ($20K ?) to really make walking away a last option. There's nothing harsh at all about that position. It's simply a smart and necessary business requirement. If you end up getting the business back as a result of poor or lazy management by the new owner, it's value will automatically be less and you'll need adequate compensation for that and for the time needed to build it back up.


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## PressurePros (May 6, 2007)

The $2000 is just a number. I would deem the real number based on getting to know the person. The bottom line is that they have to go in deep. That number also changes with everyone. Own a truck? The title is going up. You get my point. 

What you are saying holds absolutely true. It is going to take awhile to find that right person. Its hard enough finding a good crew leader that is consistent and has enough common sense to problem solve let alone someone you trust with your baby that worked on for 10 years plus. There is not a lot of risk buying PressurePros because of the way it generates leads and goes back to what I consider critical.. website SEO. All the other stuff, blogs, FB pages, meet and greet networking are nice to complete the package but if your website doesn't rank, your lead generation is fragile. Even if a person is really lax in business sense (which I would figure out long before the sale) but lets say manages to kill referrals, that URL will always be there to generate leads. 10 million people within 20 miles of my home base. It would be very easy to bring the business right back up to par. Don't get me wrong, that's not something I would want to do and I am in no rush to sell. I will choose carefully and that person will be invested up to their necks or I'll just take the owner salary hit and hire someone to do what I do. 

Good conversation.. makes you think!


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## RH (Sep 7, 2010)

PressurePros said:


> The $2000 is just a number. I would deem the real number based on getting to know the person. The bottom line is that they have to go in deep. That number also changes with everyone. Own a truck? The title is going up. You get my point.
> 
> What you are saying holds absolutely true. It is going to take awhile to find that right person. Its hard enough finding a good crew leader that is consistent and has enough common sense to problem solve let alone someone you trust with your baby that worked on for 10 years plus. There is not a lot of risk buying PressurePros because of the way it generates leads and goes back to what I consider critical.. website SEO. All the other stuff, blogs, FB pages, meet and greet networking are nice to complete the package but if your website doesn't rank, your lead generation is fragile. Even if a person is really lax in business sense (which I would figure out long before the sale) but lets say manages to kill referrals, that URL will always be there to generate leads. 10 million people within 20 miles of my home base. It would be very easy to bring the business right back up to par. Don't get me wrong, that's not something I would want to do and I am in no rush to sell. I will choose carefully and that person will be invested up to their necks or I'll just take the owner salary hit and hire someone to do what I do.
> 
> Good conversation.. makes you think!


I agree. Just one of the benefits of PT (and gee, we did it without getting pissy and angry at each other). :yes:


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## MonPeintre.ca (Feb 17, 2011)

Thanks for the thread, very interresting.


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## Paint and Hammer (Feb 26, 2008)

MonPeintre.ca said:


> Thanks for the thread, very interresting.


Welcome.

How was Thailand?


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## MonPeintre.ca (Feb 17, 2011)

Paint and Hammer said:


> Welcome.
> 
> How was Thailand?


Thailand is great. Im still there until next week end.
I cant wait to see how the business and employees have been doing without me for 3 weeks.
Im trying hard not to look at my email....just PT and FB


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## PressurePros (May 6, 2007)

Urgent: We have been painting the wrong house for the last two weeks. Please advise. Hope you are enjoying your vacation!


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## Paradigmzz (May 5, 2010)

Homeowner of wrong house being painted: "The house looks great! Just throw the bill on my neighbors tab... "


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## vermontpainter (Dec 24, 2007)

PressurePros;267909let's face it.. no start ups make money the first three years. Its a constant cycle of reinvestment and making a name. [/QUOTE said:


> Ken
> 
> You have just hit on what suffocates most businesses from growing into healthy, sustainable entities.
> 
> ...


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## PressurePros (May 6, 2007)

I suppose I am just as guilty as missing the forest for the trees when it comes to my business. It seems really simple to run PP. I feel I am lazy compared to a real go-getter and that someone could turn PP into a million dollar business if they were motivated. The reality is, that is what all people selling their businesses say. Whether that is true or not, the missing link we may not see is that if you are running your business day in and day out for 10,20 or 30 years, on your weakest day you can make more happen than a new guy full of P&V could do during that same day. 

Selling your business is like selling anything, I suppose. You have to build excitement, throw in a little smoke and mirrors, have strong supporting information and hope for that right buyer. If anyone is doing this (painting, washing, landscaping, etc) with hopes of retiring after the big sale, they are probably disillusioned. There is where you and I agree on one thing, Scott. If you don't love what you are doing, the chances of making real money from your business is slim. But even that is just a small piece of the puzzle. Like they say, if it was easy, everyone would be doing it.


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## Lee Decorating Corp. (Oct 6, 2011)

PP, Please do not take this wrong, but I think your overly optimistic accountant went to the same school as mine. I shall digress and use the best case scenarios. I do not mean to count your money, but your numbers do not add up as something that would work for a purchaser.
$600K Gross, 20% profit margin, $50K payout w/out interest to simplify everything. 35% combined tax bracket.
$120K profit. $42K in taxes. $78K left. $50K payout. Leaves the purchaser at best a take home of $28K a year after taxes (this does not include interest). Too much risk for at best $28k take home after taxes. They might as well work for someone and make the same and not have the headache and liability. If you were on L.I. and your financials added up to a 20% profit, I would pay no more than $90K and that would be over 5 years.


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## WisePainter (Dec 27, 2008)

can anyone post actual numbers based on a real transaction?

this is becoming absurd.

like a fantasy football game, involving painters.


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## George Z (Apr 15, 2007)

Lee Decorating Corp. said:


> PP, Please do not take this wrong, but I think your overly optimistic accountant went to the same school as mine. I shall digress and use the best case scenarios. I do not mean to count your money, but your numbers do not add up as something that would work for a purchaser.
> $600K Gross, 20% profit margin, $50K payout w/out interest to simplify everything. 35% combined tax bracket.
> $120K profit. $42K in taxes. $78K left. $50K payout. Leaves the purchaser at best a take home of $28K a year after taxes (this does not include interest). Too much risk for at best $28k take home after taxes. They might as well work for someone and make the same and not have the headache and liability. If you were on L.I. and your financials added up to a 20% profit, I would pay no more than $90K and that would be over 5 years.


20% operating profit is not bad if he is also getting paid a nice salary.
(The 20% is net profit I assume)


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## PressurePros (May 6, 2007)

Lee, I'll shoot you the real numbers on a pm.


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## PressurePros (May 6, 2007)

WisePainter said:


> can anyone post actual numbers based on a real transaction?
> 
> this is becoming absurd.
> 
> like a fantasy football game, involving painters.


Look at my post above. It has some real world links of businesses for sale. You can trust I know my numbers. Not all of us are CL hacks.


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## plainpainter (Nov 6, 2007)

Websites alone are going to have be worth something considerable in the future. I think they're undervalued now. Even my website, where I have basically turned off all references to painting ranks extremely well locally and gets lots of RFQ's. I wonder in the future how much a website will be valued for every 100 RFQ's it generates a year? What would someone here pay for a website that generated 100 Painting RFQ's a year? Assuming a good mix of interior, exterior, small, & Large? Everything is smoke and mirrors - but a website that has a proven track record of RFQ's is as good as a brick and mortar store front in my opinion.


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## PressurePros (May 6, 2007)

agreed. You're right about being undervalued as well. That will probably change dramatically in the next 5-10 years.


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## plainpainter (Nov 6, 2007)

Lee Decorating Corp. said:


> PP, Please do not take this wrong, but I think your overly optimistic accountant went to the same school as mine. I shall digress and use the best case scenarios. I do not mean to count your money, but your numbers do not add up as something that would work for a purchaser.
> $600K Gross, 20% profit margin, $50K payout w/out interest to simplify everything. 35% combined tax bracket.
> $120K profit. $42K in taxes. $78K left. $50K payout. Leaves the purchaser at best a take home of $28K a year after taxes (this does not include interest). Too much risk for at best $28k take home after taxes. They might as well work for someone and make the same and not have the headache and liability. If you were on L.I. and your financials added up to a 20% profit, I would pay no more than $90K and that would be over 5 years.


I know what you're saying, but this is like purchasing a house with no money down - and the house itself delivers the income to pay off the 'mortgage'. And once you finished paying off mortgage - all that income is now under your discretion to do what you please.


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## RH (Sep 7, 2010)

Homeowner of wrong house being painted: "The house looks great! Just throw the bill on my neighbors tab... "

"Urgent Update! - Just discovered that the color doesn't quite match the sample you put on the neighbors' house. We'd like a repaint to get a better match."


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## plainpainter (Nov 6, 2007)

PressurePros said:


> agreed. You're right about being undervalued as well. That will probably change dramatically in the next 5-10 years.


 I'm a big proponent of traditional newspaper advertising, and it's just slowly tanking, yellow pages are already dead in terms of ROI. If this continues, a well ranked website will be the only means of advertising. I can't think of much else that works well - other than tv/radio, perhaps?


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## PressurePros (May 6, 2007)

plainpainter said:


> I'm a big proponent of traditional newspaper advertising, and it's just slowly tanking, yellow pages are already dead in terms of ROI. If this continues, a well ranked website will be the only means of advertising. I can't think of much else that works well - other than tv/radio, perhaps?


We have to roll with the times. I've been watching Facebook and all the social medias (Google+, etc) to see how much time vs return they can yield. Facebook is too crowded and every time they make a change it seems like its gets farther away from being a viable lead generator. There's too many "here's what I ate for breakfast" posts that crowd out anything worth seeing. Newspaper ads are dying because newspapers themselves are dying. YP, a few in the older generation still use them but hardly a good ROI. Direct mail is still good if you do it right but its not cheap. We're in a lucky point in time where websites are cheap to build and host and if you are placed right, the customers are coming to you. There's no better form of advertising than that. TV and radio are great for branding but how many small businesses have the throwaway budget solely for branding? 

We're getting off topic a little even though it _is _relative to a business's worth.


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## Paint and Hammer (Feb 26, 2008)

Ken, do you feel your model for business is geographically transferable?

Franchise? It seems to me a PP business would be better(easier) to franchise than a painting business. 

Thoughts?


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## plainpainter (Nov 6, 2007)

Paint and Hammer said:


> Ken, do you feel your model for business is geographically transferable?
> 
> Franchise? It seems to me a PP business would be better(easier) to franchise than a painting business.
> 
> Thoughts?


I get first dibs on PP. LOL.


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## Lee Decorating Corp. (Oct 6, 2011)

plainpainter said:


> I know what you're saying, but this is like purchasing a house with no money down - and the house itself delivers the income to pay off the 'mortgage'. And once you finished paying off mortgage - all that income is now under your discretion to do what you please.


I understand completely about the payoff at the end. I just have to go by my experience with what I paid for 1 of the the companies I bought out and a big mistake I made by overpaying. That being said, If a 20% profit is after a healthy salary, that does drastically change the numbers. But, 20% is what I have always been told is the industry norm. I figure the 20% as it is listed on the tax return as I am an S corp and am taxed on all profit regardless of if I pull it out as salary or not.
Again, I say this with all respect to PP.


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## Paint and Hammer (Feb 26, 2008)

plainpainter said:


> I get first dibs on PP. LOL.


I think you have to save up $2000. : )


I don't know the working of a PP biz, but it seems more equipment and system based than a paint company can be.


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## plainpainter (Nov 6, 2007)

Lee Decorating Corp. said:


> I understand completely about the payoff at the end. I just have to go by my experience with what I paid for 1 of the the companies I bought out and a big mistake I made by overpaying. That being said, If a 20% profit is after a healthy salary, that does drastically change the numbers. But, 20% is what I have always been told is the industry norm. I figure the 20% as it is listed on the tax return as I am an S corp and am taxed on all profit regardless of if I pull it out as salary or not.
> Again, I say this with all respect to PP.


I do schedule D - I thought that was the only time salary and profit were considered 'one'. I thought one did LLC, and S corps to get away from that. HAve a salary separate from corporate profits. Am I missing something?


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## PressurePros (May 6, 2007)

Paint and Hammer said:


> Ken, do you feel your model for business is geographically transferable?
> 
> Franchise? It seems to me a PP business would be better(easier) to franchise than a painting business.
> 
> Thoughts?


That was the original game plan but it was way more involved financially and legally than I thought. Everyone from the SEC to other offices of the Fed have guidelines and responsibilities you have to answer to. If a person doesn't do decks, my model is easy to replicate. If you do commercial flat work, it may be easier to sell as there are contractual accounts, easy training, less selling and more predictable residual income. Residential can be a tough racket. But yeah its definitely a more straightforward model than painting. At the core, we apply chems and rinse them off. 

From my experience with painting there are obviously far more variables. I look at a wall and it is one unit to be bid by s/f. You guys look at a wall and it becomes trim, molding, number of windows, how much repair, sanding, coverage rates, how many coats, what you have to work around, the tedious nature of cutting, ladder work, etc. To me, that's a nightmare and requires much more training and expertise to do. That's not, for me, a good business model. I like simple, in-and-out, collect check. I respect the he** out of you guys that do painting.


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## PressurePros (May 6, 2007)

plainpainter said:


> I do schedule D - I thought that was the only time salary and profit were considered 'one'. I thought one did LLC, and S corps to get away from that. HAve a salary separate from corporate profits. Am I missing something?


In an S corp, working shareholders have to be salaried. There are a ton of ways to structure that for sheltering but at the minimum, the IRS wants to see a reasonable salary or they will audit you and hit you with back payroll tax.


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## PressurePros (May 6, 2007)

plainpainter said:


> I get first dibs on PP. LOL.


$2000 and the title to the Mystery Machine.


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## RH (Sep 7, 2010)

PressurePros said:


> We have to roll with the times. I've been watching Facebook and all the social medias (Google+, etc) to see how much time vs return they can yield. Facebook is too crowded and every time they make a change it seems like its gets farther away from being a viable lead generator. There's too many "here's what I ate for breakfast" posts that crowd out anything worth seeing. Newspaper ads are dying because newspapers themselves are dying. YP, a few in the older generation still use them but hardly a good ROI. Direct mail is still good if you do it right but its not cheap. We're in a lucky point in time where websites are cheap to build and host and if you are placed right, the customers are coming to you. There's no better form of advertising than that. TV and radio are great for branding but how many small businesses have the throwaway budget solely for branding?
> 
> We're getting off topic a little even though it _is _relative to a business's worth.


Still, I don't care how many leads a website, direct mailing, other advertising, or even referrals deliver if the person buying the business can't land the leads, communicate well with the clients, and deliver a quality product, the business will tank. 

If an owner is willing to "ease out" and provide mentoring as well as financing to the new owner it has a better chance. That's the reason family owned businesses that are sold to the next generation often do well. But when you are dealing with strangers in that scenario it becomes much more risky and you really aren't "selling" or retiring when you do it that way. In fact it can become even more work and more stressful. That's why franchise businesses (ex. Servicemaster) often prove to be more marketable. They have a parent company that will oversee the sale and provide the guidance for the new owners. And they will often provide financing as well.


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## vermontpainter (Dec 24, 2007)

The overwhelming majority of service businesses (painting, pressure washing, carpentry, remodeling, handyman services) are very small. Very very small businesses, operating in local markets where ownership is generally known. 

Sometimes it is suggested that if your business could not operate without your involvement, then you have failed to build a good business. 

I don't think that is the case. The value that you as the owner bring to your business should have as big an impact as anything on your ability to charge top dollar, build a good team of people, generate repeat and referral business and maximize profit. 

Of course, we all love the idea of passive income and being unencumbered by our businesses, but in reality, most of the best service businesses are run by hard working owners...whether they are doing the work, or estimating, selling and managing. 

Most of the business sale transactions we are going to see in our lifetimes are the stacks of ladders and sprayers that neps is buying up off CL and laughing all the way home. 

Just because your business probably can't/won't be sold, does not mean it is without value. 

I put alot of value in that fact that it provides for my family and the families of my employees. And I am pretty sure my son will work his way through college in this business. It's built for me and my crew to run. That's good enough.


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## vermontpainter (Dec 24, 2007)

Also, for those who think they might have a url goldmine, a bank really doesnt care about your website. They are much more interested in wip, and the percentage of gross that you have to spend on marketing to generate the sales that you do get. Sure, with a good url, it can be controlled and low. But there are other non url venues that achieve that same effect, making the url magic less unique. 

Several years of professionally prepared financials and tax returns tell the whole, entire story of your business. Url doesnt show up anywhere on financials, that I am aware of.


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## PressurePros (May 6, 2007)

researchhound said:


> Still, I don't care how many leads a website, direct mailing, other advertising, or even referrals deliver if the person buying the business can't land the leads, communicate well with the clients, and deliver a quality product, the business will tank.


Of course. You know there is no guarantee in business. A business person either has it or they do not. You couldn't take an hourly worker and hand them a business and expect them not to kill it unless they were spoon fed and handheld until they knew the operation as well as the current owner. 



researchhound said:


> If an owner is willing to "ease out" and provide mentoring as well as financing to the new owner it has a better chance. That's the reason family owned businesses that are sold to the next generation often do well. But when you are dealing with strangers in that scenario it becomes much more risky and you really aren't "selling" or retiring when you do it that way. In fact it can become even more work and more stressful. That's why franchise businesses (ex. Servicemaster) often prove to be more marketable. They have a parent company that will oversee the sale and provide the guidance for the new owners. And they will often provide financing as well.


Exactly. I think its not that the parent company is overseeing the sale as much as the parent company has laid out every system a new business owner needs. In formulating my way to get out, I will have a guy that will be trained, probably for years, in the day-to-day operations and the learning of all systems in place. I'm realistic, the stars may not align and that guy may never come along.

Going round to my first post on the topic.. to an investor, a bank or anyone else, owner operated service businesses are worth very little at resale unless they are making mad profit and the owner's jobs can be delegated with enough money left over for the buyer. That is not implying in the least that they aren't profitable or fulfilling. It just represents too big of a risk and/or low return to someone else.


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## PressurePros (May 6, 2007)

vermontpainter said:


> Several years of professionally prepared financials and tax returns tell the whole, entire story of your business. Url doesnt show up anywhere on financials, that I am aware of.


It will eventually. Its an asset like the property is on a bricks and mortar. Like Dan said, currently an undervalued one. Like any real estate, it is location, location, location.


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## vermontpainter (Dec 24, 2007)

PressurePros said:


> It will eventually. Its an asset like the property is on a bricks and mortar. Like Dan said, currently an undervalued one. Like any real estate, it is location, location, location.


I can't wait to see how it shows up in my financials and tax returns. My entire social media portfolio will be a gold mine when that day comes. I will gladly sell someone my identity for the right price. :jester:

The precedent for that is phone numbers. Some get bought. Most get changed. Url's can be forwarded, pointed, all that good stuff. 

But I do hope you are right.


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## RH (Sep 7, 2010)

PressurePros said:


> Of course. You know there is no guarantee in business. A business person either has it or they do not. You couldn't take an hourly worker and hand them a business and expect them not to kill it unless they were spoon fed and handheld until they knew the operation as well as the current owner.
> 
> 
> 
> ...


Oh they *will* oversee a sale, and very closely too. They are extremely vested in who might take over a business they have their name on. What you said about having a systems in place for a new owner to follow is true.


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## vermontpainter (Dec 24, 2007)

Its funny that we are talking about this. 

A few years ago, the top tile guy in my area, who worked in the business and had a couple of helpers, sold his business to another tile guy for a hefty price. Sold the shop, trucks, logo, website, equipment, customer list, the whole ****e and shaboodle. The business was in his own name...ie, Ken Fenner Tile, and he sold it. AND, he signed a non compete that he himself would no longer do any tile work in the area, or be involved in any capacity in the local market. 

Dude took a big check. Started a new tile company, doing exactly what he did before...custom tile. Only he does it on a cherry pick basis. He will travel to Nantucket or Marthas Vineyard or up the coast or fly out west. He doesnt do any business in Vermont. 

The dude who bought his business has floundered. 

Locally, all you hear about it is "it's not the same business as when ***XX owned it.."

People see right through that.


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## PressurePros (May 6, 2007)

researchhound said:


> Oh they *will* oversee a sale, and very closely too. They are extremely vested in who might take over a business they have their name on. What you said about having a systems in place for a new owner to follow is true.


I know.. they are up your tail with tons of qualifications. I have two franchises. But the training is brief, albeit ongoing. I flew to Waco, TX for one and Scottsdale AZ. One week and two weeks respectively. The rest is simply following their formula.


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## plainpainter (Nov 6, 2007)

How about a thread on the reasons why would we want to sell our businesses? Seems to me at best case scenerio you're trading 3-4X yearly earnings one lump payment in exchange for giving up all future earnings.


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## NEPS.US (Feb 6, 2008)

I hear that a PT membership adds 34% to the value.


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## NEPS.US (Feb 6, 2008)

Unless it is Dan's membership, then deduct 46%.


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## vermontpainter (Dec 24, 2007)

NEPS.US said:


> Unless it is Dan's membership, then deduct 46%.


My nephew is studying accounting. He said they are now learning how to value forum post count stats as business assets. I am so retiring early.


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## RCP (Apr 18, 2007)

PressurePros said:


> We have to roll with the times. I've been watching Facebook and all the social medias (Google+, etc) to see how much time vs return they can yield. Facebook is too crowded and every time they make a change it seems like its gets farther away from being a viable lead generator. There's too many "here's what I ate for breakfast" posts that crowd out anything worth seeing. Newspaper ads are dying because newspapers themselves are dying. YP, a few in the older generation still use them but hardly a good ROI. Direct mail is still good if you do it right but its not cheap. We're in a lucky point in time where websites are cheap to build and host and if you are placed right, the customers are coming to you. There's no better form of advertising than that. TV and radio are great for branding but how many small businesses have the throwaway budget solely for branding?
> 
> We're getting off topic a little even though it _is _relative to a business's worth.


I agree, it is relative. Ken, do you think having a complete online presence is of value? I think there is a lot guys can do on FB, Twitter, Blogs and other SM avenues. Just having an optimized website does not seem like enough these days.


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## PressurePros (May 6, 2007)

Scott, you're thinking like an owner/operator. That's not a jab, we all do it because that is what we are. The majority of people meet me at sale and then never again. They like me enough to buy but I don't make their Christmas list or get invited to their daughter's wedding. Your story above is one of bad management. That comes in many forms. You can hire a bad manager and people will complain about how the service has changed. 

Assuming Kevin Nolan has layers of managers for admin, operations, fleet, sales, etc and he sold me his business, would I need to learn how to paint? If I properly ran the company according to his design, would customers care whose name was on the books? Some probably would, but if his lead generation system is strong, it would balance.


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## plainpainter (Nov 6, 2007)

RCP said:


> I agree, it is relative. Ken, do you think having a complete online presence is of value? I think there is a lot guys can do on FB, Twitter, Blogs and other SM avenues. Just having an optimized website does not seem like enough these days.


 Who says? Facebook and Twitter is way overrated - I haven't seen much that suggests those avenues add anything to a contracting company. Some blogging perhaps - but well positioned websites is still king.


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## vermontpainter (Dec 24, 2007)

PressurePros said:


> Scott, you're thinking like an owner/operator. That's not a jab, we all do it because that is what we are. The majority of people meet me at sale and then never again. They like me enough to buy but I don't make their Christmas list or get invited to their daughter's wedding. Your story above is one of bad management. That comes in many forms. You can hire a bad manager and people will complain about how the service has changed.
> 
> Assuming Kevin Nolan has layers of managers for admin, operations, fleet, sales, etc and he sold me his business, would I need to learn how to paint? If I properly ran the company according to his design, would customers care whose name was on the books? Some probably would, but if his lead generation system is strong, it would balance.


Ken

I am an owner operator. I dont paint much. I can do whatever I want, and alot of the time I do. I could sit around and pretend I was an important business man if I wanted to, but there is no money in that. 

And Ken, you are an owner operator too.


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## vermontpainter (Dec 24, 2007)

plainpainter said:


> but well positioned websites is still king.


You know this to be true?


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## NEPS.US (Feb 6, 2008)

I started a painting company in part because I wanted to be a owner/operator. I enjoy what I do.


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## vermontpainter (Dec 24, 2007)

NEPS.US said:


> I started a painting company in part because I wanted to be a owner/operator. I enjoy what I do.


Alot of people don't enjoy what they do.


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## PressurePros (May 6, 2007)

RCP said:


> I agree, it is relative. Ken, do you think having a complete online presence is of value? I think there is a lot guys can do on FB, Twitter, Blogs and other SM avenues. Just having an optimized website does not seem like enough these days.


I think its icing on the cake, Chris. In a measurable sense of lead generation, not sure how important. But it can certainly sway those that are inclined to look into a company's social media presence. Does anyone expect Joe's Painting to have social media presence. Do they care or penalize him if he doesn't?


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## PressurePros (May 6, 2007)

vermontpainter said:


> Ken
> 
> I am an owner operator. I dont paint much. I can do whatever I want, and alot of the time I do. I could sit around and pretend I was an important business man if I wanted to, but there is no money in that.
> 
> And Ken, you are an owner operator too.


Never said I wasn't. No Ken, no sales. No sales, no company. 

You're missing the point, Scott. You gave an example of bad management ruining a company and implied that it was merely the result of a company changing hands. That is incorrect. Bad management is bad management, no matter what form it comes in. Its your perspective I was challenging, not your stature.


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## plainpainter (Nov 6, 2007)

vermontpainter said:


> You know this to be true?


 I know a guy that had a yearly budget of 1 million to spend on website SEO - They hired a guy of the tune of 70k salary to just do facebook, and they couldn't see a single uptick in sales from it. Let me ask you this, have you purchased anything through facebook or twitter? Referred to a plumber through a blog perhaps? In the end if these things improve your rankings - that's good. But ultimately it's a well ranked website that's gets customers to call.


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## vermontpainter (Dec 24, 2007)

PressurePros said:


> Never said I wasn't. No Ken, no sales. No sales, no company.
> 
> You're missing the point, Scott. You gave an example of bad management ruining a company and implied that it was merely the result of a company changing hands. That is incorrect. Bad management is bad management, no matter what form it comes in. Its your perspective I was challenging, not your stature.


Ken

I think it is no secret that bad management is one of the leading death causing cancers of small industry. Look around. A good manager is unlikely to buy a company. He can probably build his own. Business grow on team building skills. 

I didnt take it personally Ken. I dont have a stature. I have a business. The way I read your statement, it seemed to imply that my thinking like an owner operator was somehow different than the way you were thinking. We can call ourselves entrepreneurs, but we arent really. We start businesses, run them, and survive. You, me and most here. 

To your question on Kevin Nolan...I think you or I would be challenged to run a business that has been up in the several hundred employee range in the past decade. Thats a whole different animal...not a small business.


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## RCP (Apr 18, 2007)

PressurePros said:


> I think its icing on the cake, Chris. In a measurable sense of lead generation, not sure how important. But it can certainly sway those that are inclined to look into a company's social media presence. Does anyone expect Joe's Painting to have social media presence. Do they care or penalize him if he doesn't?


Icing on the cake, I like that. 
Part of lead generation is being found online, having a social media presence can certainly affect that. Many can easily dominate search results with a variety of online content.
Does that mean if I need my house washed that I need to see projects on Facebook? Probably not, but if I am going to spend 5k having my house painted and do a search on Joe's painting and I see that several of my friends or people in my social networks speak well of Joe, I may not consider Steve, who has no identity except a plain website.


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## vermontpainter (Dec 24, 2007)

plainpainter said:


> I know a guy that had a yearly budget of 1 million to spend on website SEO - They hired a guy of the tune of 70k salary to just do facebook, and they couldn't see a single uptick in sales from it. Let me ask you this, have you purchased anything through facebook or twitter? Referred to a plumber through a blog perhaps? In the end if these things improve your rankings - that's good. But ultimately it's a well ranked website that's gets customers to call.


A well ranking website can be one thing that gets people to call. Do you ever check the sites of contractors online who claim to have lead generating machines? You should. Its comical. Some get like 27 hits a DAY!


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## plainpainter (Nov 6, 2007)

vermontpainter said:


> A well ranking website can be one thing that gets people to call. Do you ever check the sites of contractors online who claim to have lead generating machines? You should. Its comical. Some get like 27 hits a DAY!


Are we talking 27 unique visitors/day? What's wrong with that? That's 837 unique visitors per month - I dream of that many visitors from qualified homeowners.


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## RCP (Apr 18, 2007)

plainpainter said:


> Are we talking 27 unique visitors/day? What's wrong with that? That's 837 unique visitors per month - I dream of that many visitors from qualified homeowners.


Hard to compare unique visitors with qualified homeowners.


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## plainpainter (Nov 6, 2007)

RCP said:


> Hard to compare unique visitors with qualified homeowners.


 I mean if the traffic is coming from a localised geographical area - I'd be killing it if I had 25+ unique visitors per day.


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## NEPS.US (Feb 6, 2008)

plainpainter said:


> I mean if the traffic is coming from a localised geographical area - I'd be killing it if I had 25+ unique visitors per day.


:lol:


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## DeanV (Apr 18, 2007)

Dan, you realize most of your unique vistors are us at PT wondering if you are still painting or not and if you still have the caricature sketch up?


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## vermontpainter (Dec 24, 2007)

DeanV said:


> Dan, you realize most of your unique vistors are us at PT wondering if you are still painting or not and if you still have the caricature sketch up?


I just sprained a fat. Big time. Holy crap.


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## plainpainter (Nov 6, 2007)

DeanV said:


> Dan, you realize most of your unique vistors are us at PT wondering if you are still painting or not and if you still have the caricature sketch up?


In the past 30 days, painttalk has been responsible for 28% of my website traffic - the clear majority of traffic is coming from google plus other search engines.


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## vermontpainter (Dec 24, 2007)

plainpainter said:


> In the past 30 days, painttalk has been responsible for 28% of my website traffic - the clear majority of traffic is coming from google plus other search engines.


They are probably checking to see if you have leads for sale.


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## plainpainter (Nov 6, 2007)

vermontpainter said:


> They are probably checking to see if you have leads for sale.


 OK - Wiseguy - how much traffic does your website get?


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## NEPS.US (Feb 6, 2008)

Funny thread. 


Anyone that has to just rely on leads from their site in this industry might as well pack it in. There is so much more to building a successful business with sales than unique visitors.


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## plainpainter (Nov 6, 2007)

NEPS.US said:


> Funny thread.
> 
> 
> Anyone that has to just rely on leads from their site in this industry might as well pack it in. There is so much more to building a successful business with sales than unique visitors.


 
Leads from my website are a huge part of my business. Nothing is what it use to be. I didn't need a website in '04-'05, but things changed.


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## vermontpainter (Dec 24, 2007)

plainpainter said:


> OK - Wiseguy - how much traffic does your website get?


Not as much as the calls I get for repeat and referral. So, it doesnt matter. Get customers worth keeping and keep them. It may not happen over the internet.


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## RH (Sep 7, 2010)

Anyone care to put a percentage on the number of "biddable" leads (not contracted projects) they know have been generated from their website alone in the last twelve months? I know this could be difficult to determine but just curious if anyone has some hard numbers.
The rest would be from any other areas such as referrals, ads (any type), direct mailings, etc..
RH Dan


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## NEPS.US (Feb 6, 2008)

It is a fact that just about anyone could be a successful contractor 6-8 years ago. And it is also a fact that several of those successful conntractors had no business being in business.


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## Ultimate (Mar 20, 2011)

The population of my area in the off season is something less than 10,000. 
Ken's surrounding area is ..... 

I like Scott's last statement about finding good customers and keeping them.


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## vermontpainter (Dec 24, 2007)

NEPS.US said:


> It is a fact that just about anyone could be a successful contractor 6-8 years ago. And it is also a fact that several of those successful conntractors had no business being in business.


The silver lining of the recession.


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## plainpainter (Nov 6, 2007)

vermontpainter said:


> Not as much as the calls I get for repeat and referral. So, it doesnt matter. Get customers worth keeping and keep them. It may not happen over the internet.


In your market perhaps, but homeowners in my area don't have loyalty to contractors. Electrical, plumbing, painting, roofing - it's all a commodity to homeowners. I understand the kinds of services that garner loyalty - but it's taken me 7 years to figure out a basic outline and many more years in the future to round out my understanding.

I can deliver the utmost in perfection in interior repaint work with just a ho-hum response from customers. I can deliver the most mundane service I can think of presently - and my customers absolutely love me and call me back year after year.


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## vermontpainter (Dec 24, 2007)

plainpainter said:


> In your market perhaps, but homeowners in my area don't have loyalty to contractors. Electrical, plumbing, painting, roofing - it's all a commodity to homeowners.


Or could it be that they just dont have loyalty to you? Maybe you commoditized yourself. 

Like neps said, 6-8 years ago, people would take anyone they could get. Now, not so much.


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## George Z (Apr 15, 2007)

researchhound said:


> Anyone care to put a percentage on the number of "biddable" leads (not contracted projects) they know have been generated from their website alone in the last twelve months? I know this could be difficult to determine but just curious if anyone has some hard numbers.
> The rest would be from any other areas such as referrals, ads (any type), direct mailings, etc..
> RH Dan


Yes, about 500, or about 90% of non referral leads.


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## George Z (Apr 15, 2007)

While Dan may not have the revenue to back up his claims,
I agree with him and Ken here.
Our referral and retention rates are very good.
But we are getting over 500 website requests a year from our website.
No, it is not difficult to track and it happens year, after year, after year...
Is someone trying to say there is something wrong with that?


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## plainpainter (Nov 6, 2007)

vermontpainter said:


> Or could it be that they just dont have loyalty to you? Maybe you commoditized yourself.
> 
> Like neps said, 6-8 years ago, people would take anyone they could get. Now, not so much.


I find this laughable, you have a good thing where you are - I remember the identical amount of loyalty and repeat business that you speak of. We all have our loyal repeat customers, but I am sure it's a much smaller fraction of our sales than most contractors are willing to admit to. 

My painting sales have actually increased this year for the first time in 4 years and it was all based upon repeat clientel. But it isn't the traditional clientel that I would have predicted would have given me this work.


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## plainpainter (Nov 6, 2007)

George Z said:


> While Dan may not have the revenue to back up his claims,
> I agree with him and Ken here.
> Our referral and retention rates are very good.
> But we are getting over 500 website requests a year from our website.
> ...


While I may not have the revenue of many folks here, it's still enough to derive statistics from. I think George is on the leading edge of website sales, who the heck would have turned down 500 requests for service every year for the past 3 years? How many folks here would have rather stuck it out with their 'loyal' clientel instead? No offense, but I rarely see a home painted by the same painter twice in a row.


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## WisePainter (Dec 27, 2008)

WisePainter said:


> can anyone post actual numbers based on a real transaction?
> 
> this is becoming absurd.
> 
> like a fantasy football game, involving painters.





PressurePros said:


> Look at my post above. It has some real world links of businesses for sale. You can trust I know my numbers. Not all of us are CL hacks.


I know you aren't, I was seeking a lurker's answer who may have actually sold their painting business.

This thread blew up since my post, and I'm not gonna plow through the new pages...


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## WisePainter (Dec 27, 2008)

NEPS.US said:


> Funny thread.
> 
> 
> Anyone that has to just rely on leads from their site in this industry might as well pack it in. There is so much more to building a successful business with sales than unique visitors.


I gots no webby pages...


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## RH (Sep 7, 2010)

WisePainter said:


> I gots no webby pages...


Me neither but I'm in the thinking/planning stages. Guess it's time to jump on board. Anyone recommend a web page planning/building site? I was going to check out _1 & 1_ - anyone ever use them?

RH Dan
(Sorry - perhaps this should be a new thread.)


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## MonPeintre.ca (Feb 17, 2011)

Me to the crew: "ok guys, dont move im on my way to solve the color problem... I'll be there in less than 20 hours "


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## PressurePros (May 6, 2007)

researchhound said:


> Me neither but I'm in the thinking/planning stages. Guess it's time to jump on board. Anyone recommend a web page planning/building site? I was going to check out _1 & 1_ - anyone ever use them?
> 
> RH Dan
> (Sorry - perhaps this should be a new thread.)


1,2,3 triad does nice sites and fairly cheaply. A buddy of mine had his done by them www.newlookpowerwash.com


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## RH (Sep 7, 2010)

MonPeintre.ca said:


> Me to the crew: "ok guys, dont move im on my way to solve the color problem... I'll be there in less than 20 hours "


Crew to boss: No worries. We think we've found the right house. It's the one with the "Short Sale" sign in the yard - right? It's looking good! :yes:


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## MonPeintre.ca (Feb 17, 2011)

researchhound said:


> Crew to boss: No worries. We think we've found the right house. It's the one with the "Short Sale" sign in the yard - right? It's looking good! :yes:


Boss to pilot : can you turnarround and land on the beach?
Boss to wife : we get 2 more vacation weeks....we just got the best job!!!


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## Paradigmzz (May 5, 2010)

Pilot to boss: crap, I'm flying the wrong plane!


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## MonPeintre.ca (Feb 17, 2011)

Boss to boss : back to work


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## WisePainter (Dec 27, 2008)

this clinically technical business thread just unravelled in a way that befuddled me...not an easy task.

10 pts.


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## plainpainter (Nov 6, 2007)

The 'crew' and the boss currently are not on speaking terms at J.P.P. It's a labor/management dispute.


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## EpoxyMan101 (Dec 1, 2011)

It really just depends on where you are located. A business in the painting industry can be very successful if you know where to go and who to work with - Good Luck!!


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