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22 January, 2019

APC’s 2018 Contractor Operations Survey Finds Painters Hiking Prices, Adding Services and Earning More

By Megan Headley

We don’t have to tell you painting contractors are a hot commodity right now. Whether you’re watching remodeling or new construction you’ve likely seen demand for your services growing. That’s why respondents to APC’s 2018 Contractor Operations Survey overwhelmingly report increasing their staff, hiking their prices and offering more services than in years past.

Not that this good fortune is falling in your laps—painting contractors also report marketing their services to a far broader reach of consumers hungry to hand off the work in updating their home or business’ look.

Of course, all this growth has brought growing pains as well, particularly with regards to finding labor.

Yes, it’s an exciting time to be a painting contractor. Fortunately, APC has a benchmarking roadmap to help you navigate the waters ahead.

About the Survey
The biannual Contractor Operations Survey presents a cross-section of business practices from painting contractors across the United States. Readers were invited by email and through the PaintMag.com weekly newsletter to participate in the survey. (If you don’t get APC’s Paint News in your inbox now, you’re missing out on valuable business insight and opportunities to impact the industry!)

In the following pages, we’ll compare business growth and evolving practices to our last survey, conducted in November 2016. Consider poring over this data with information on-hand about your company’s annual revenue and marketing plan to get a better sense of where you fall among your peers and how you can strengthen your business for what’s ahead.

 

Business is Hot
Sales are largely up for painting contractors across the board, although that could be due to the broad number of offerings painters are providing.

Moreover, more respondents reported revenue over the $1 million mark, far exceeding the numbers we saw in 2015 and 2013, 16% and 15% respectively.

Roadmap to Profit

Across the board, we’re seeing painting contractors of all sizes getting more out of their broad array of services beyond painting, from carpentry repairs (as much as 60% of contractors earning $500,000 to $2.49 million) to drywall installation. Eighteen percent of contractors report further diversifying to get more of the remodeling service market.

While painting is the bread and butter of these contractors, there are some noticeable differences in the markets providing the biggest painting profit. Smaller contractors earning up to $100,000 largely find residential repaints (61%) to be their most rewarding work.

However, contractors tend to favor highend residential (42% of contractors earning $100,000 to $2.49 million) as revenue rises and they gain the confidence and skillsets to handle these jobs. Perhaps not surprisingly, commercial projects are the preferred cash cow for contractors over the $1 million mark. What is interesting to note, is that companies with revenues of $250,000 to $499,000 see a break across segments, with 41% finding profit in residential repaint, 30% in commercial work and 25% in residential repaint, showing this segment as an area where painters are exploring with a variety of ways to boost their bottom-line to achieve higher profits.

Where’s the Labor?

We don’t have to tell you that hiring is the number one challenge painters— and the construction industry as a whole—are facing today. Over the last two years, painters who previously were fine to go it on their own have brought in employees. While in 2016 nearly one third (31%) of our readers were solo business operators, that’s down now considerably (17%).

Of course, expanding a business brings its share of challenges, and in this case it’s the challenge of bringing in skilled labor. As evidence to this point, 35% of survey respondents cited employee hiring and retention as their greatest challenge. In addition, an unskilled workforce adds to the challenge of scheduling the work coming in, a challenge 17% of readers cited as a problem.

 

As in years past, low-priced competition remains a challenge for contactors (24%) today, particularly given the expansion of industry players seeking to meet the high demand for painting services.

One way painting contractors are dealing with the labor shortage is by investing more in training and in benefits for top performers. While we weren’t surprised to see that the majority of companies earning over the $1 million mark have employee training programs in place, it was interesting to note some stark differences in small/medium companies, with 91% of companies earning $100,000 to $249,000 putting training in place, followed by a sharp decline in training offerings among higher earners. Are companies above the $250,000 sales mark finding the skilled labor they need from their smaller counterparts? Or is the focus on on-the-job training for the broad variety of services offered here? No matter the approach, training will remain an important issue for painters of all levels while labor remains in high demand.

Making Marketing Waves

We’ve seen painting contractors ready to grow to the next level are taking a variety of steps to maximize on the popularity of painting services. The first step? More than half (52%) of painters who are seeing business increase likewise are increasing their prices; 48% of all contractors surveyed made a similar move. That’s compared to a mind-blowing 3% of painters in 2016 who contemplated this move.

With those price hikes, 40% of painter survey respondents have proven eager to take on more work, and 26% are boosting their staff to support these increases.

While we’ll admit that some of our respondents— a whopping 9%—reported doing nothing in the way of marketing, just imagine how business might have grown if they’d taken the steps of our other survey respondents. A third of painting contractors (32%) report increasing their networking to find more opportunities for word-of-mouth work, while a quarter (26%) are adding to their marketing budget.

Those additional marketing dollars are being used to find leads from a broader than ever array of sources. The old standards still work (19% of you are still using the Yellow Pages, after all), and face-to-face contact is a strong form of marketing for roughly a quarter of contractors: calling on clients (27% of all contractors), networking groups (21% of all contractors) and meetings with general contractors and facility managers (19% of all contractors) all lead the list in terms of marketing efforts. And nearly half of all contractors (46%) are taking advantage of vehicle power to spread the word about your services.

Of course we can’t comment on marketing without mentioning Facebook. Everybody’s doing it, and far beyond other social media offerings—despite consumer news cautions on the recent trend in declining Facebook usage (the Pew Research Center noted in June 2018 that 42% of Facebook users have stepped back from daily engagement, and 26% have deleted the app from their phones, reportedly due to a declining trust in the social media company). For painting contractors, Facebook is still one of the leading ways of reaching customers.

Getting the Job Done

Pressure washing is back in style for painters, with 81% reporting offering this service, compared to 73% in 2016. We’re seeing more painting contractors doing surface prep than ever, going so deep as to offer carpentry repairs (47%) and drywall installation (30%), among other services. More surprising is the scarcity of certified lead paint abatement services (21%), given the prevalence of locales currently demanding state and local governments remediate lead-painted properties.

While interior and exterior paint and coating services are the focus for contractors surveyed, wallpaper remains in strong demand (offered by 50% of contactors surveyed), as does cabinet refinishing (64%).

Working at heights is the nature of the job, painters shared, with much of their equipment purchases focusing on ladders (91%), scaffolding/rigging (69%) and even aerial lifts (61%). We assume this means that virtually all of our survey respondents have a strong safety program focusing on preventing falls, OSHA’s perennial leader in safety violations.

Painters also expressed their overwhelming preference for airless sprayers, with 86% of surveyed contractors owning these tools as compared to 62% who prefer an HVLP sprayer and 48% who use an airassisted sprayer.

How Do You Compare?

One thing that is clear every year in which this survey is performed is that our readers are always actively seeking the next opportunity and new ways to grow. After studying how your competitors are positioning themselves, consider what strategies you might apply to boosting your growth in the years ahead.

Send your comments and questions to editorial@paintmag.com, Subject: 2018 Contractor Operations Survey.

Megan Headley is the managing editor of APC. She can be reached at editorial@paintmag.com.

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