After years in the painting business, you're still not seeing the profits that you thought you would. 

You’ve got what it takes – the drive, skill, and knowledge – so you’re wondering what the missing link is and when you’ll start to see painting business profits. 

Creating a profitable painting business isn’t easy. It takes planning, solid business skills, and initiative. With the right know-how, energy, and resourcefulness, your painting business can turn the profits you’ve only imagined thus far.

Learn how to build, maintain, and increase the profit margins for your painting business.

Painting Business Profitability: An Outlook on the Industry

According to research, the painting industry in the United States includes more than 255,000 businesses with revenues of over $35 billion. With the constant need for painters in new construction and remodels, the future for painting business owners looks bright.

Even though the Bureau of Labor Statistics (BLS) forecasts limited growth in the painting industry, there still remain over 31,000 openings for painters and other maintenance workers in the construction business.

Has COVID-19 Affected the Demand for Painting Services?

The painting industry was drastically affected by the COVID-19 pandemic. 

Factors like …

• Quarantine protocols
• Supply shortages; and
• Labor shortages

… caused many painting jobs to halt, which resulted in less business and revenue for painting business owners.

However, with the construction market now on the rise, painting jobs will likely be on the rise as well. 

Even though the pandemic left a mark on the painting industry, there’s reason to believe the painting market is recovering, allowing painting business owners to increase their profits.

The Profitability of Your Painting Business Is Influenced By Cash Flow

Cash flow can be a challenging issue in any business, and the painting industry is no different. 

Cash flow problems can be particularly crippling for painters because of the following problems:

• Being too generous with their credit - Extending credit to clients for a long period of time can cause financial strain. And when clients are the ones who decide when the painter gets paid, without cash on hand, the painting business owner may need to pay staff, suppliers, and other bills from their own funds.
• Not keeping up with growth - With a growing business, an owner may end up hiring more workers than needed or try to get by with the limited labor on hand. Either way, it can damage the business and affect revenue and cash flow.
• Practicing untidy bookkeeping - Not keeping accurate track of invoices and payments can put a painting business in financial straits.

Whether you’re dealing with one of these issues or another cash flow snag, the Flexbase Card can help keep you in the black while paying employees and purchasing supplies.

You’ll also get 0% interest for 60 days and the capability to track receipts by project, making it easy to keep your records organized and up to date.

The Flexbase Card was designed with tradespeople and painting businesses in mind, and with Flexbase Payments, you can get paid 10x faster. 

What Is the Average Salary for Painters?

The national average salary for painters is $45,590, but the average salary for painting business owners can vary greatly depending on the location of the painting business. 

Average Salary for a Painting Business By State

The average salary for a painting business owner varies by state:

Alabama - $37,300

Alaska - $48,900

Arizona - $38,500

Arkansas - $37,000

California - $48,300

Colorado - $46,900

Connecticut - $47,800

Delaware - $37,600

Florida - $37,400

Georgia - $37,200

Hawaii - $60,000

Idaho - $37,500

Illinois - $53,200

Indiana - $39,400

Iowa - $46,709

Kansas - $43,000

Kentucky - $37,000

Louisiana - $38,500

Maine - $46,300

Maryland - $46,400

Massachusetts - $47,800

Michigan - $38,200

Minnesota - $48,600

Mississippi - $36,500

Missouri - $49,300

Montana - $38,400

Nebraska - $37,800

Nevada - $45,800

New Hampshire - $46,300

New Jersey - $55,200

New Mexico - $37,500

New York - $56,300

North Carolina - $36,900

North Dakota - $37,700

Ohio - $46,200

Oklahoma - $38,700

Oregon - $38,600

Pennsylvania - $44,700

Rhode Island - $47,200

South Carolina - $37,500

South Dakota - $37,700

Tennessee - $36,800

Texas - $37,100

Utah - $38,600

Vermont - $47,400

Virginia - $38,600

Washington - $48,500

West Virginia - $37,300

Wisconsin - $46,400

Wyoming - $38,200

Is Owning a Painting Business Profitable?

Yes! A painting business can be profitable, but the degree of profitability can depend on things like:

• Leadership skills
• Marketing strategy
• Schedule planning
• Accurate job estimations
• Hiring and keeping quality employees

To be successful and profitable, it’s no secret that you must make more than you are spending.

To bring in more jobs and increase profits for your painting business, follow these tips:

1. Start with a business plan.
2. Register your business, and get a license.
3. Get a license.
4. Secure insurance.
5. Set up a business bank account.
6. Secure loans, if necessary.
7. Get a low-interest credit card — like the Flexbase Card with 0% interest for 60 days.

4 Steps to Creating a Profitable Painting Business

Hard work pays off.

Building a painting business takes drive, energy, and perseverance. But the payoff could be huge.

To make your painting business as profitable as possible, consider the following four steps.

Step 1: Create a Business Plan and Stick to It

Failing to plan could mean your painting business never gets off the ground. Without a solid plan, your profits can be very limited.

Create a business plan that includes:

• An explanation of details of the business, including:

• The type of business
• The business owner
• The business manager
• The primary customers

• The types of services your painting business will provide — residential, commercial, interior, exterior, etc.
• A marketing survey
• A business strategy
• A plan for hiring employees
• A financial plan and action steps

Step 2: Determine Your Profit Margin and Overhead

To understand your profit margin, you’ll need to consider expenses and overhead costs.

When estimating your overhead costs, consider things like: 

• Equipment maintenance
• Advertising 
• Insurance
• Licensing fees
• And more

‍

Add up all your overhead costs and subtract them from your revenue. Take that figure and divide it by your revenue and multiply by 100.   

GPM (Gross Profit Margin) = (revenue - expenses)/revenue x 100 

For example, if your revenue for three hours of work is $500, and the costs for those services are $150, your gross profit margin would be 70%. For every dollar of services, you’d be making $0.70. 

Step 3: Develop a Pricing Formula

To make a profit, you need to know what to charge for your services. Pricing is key to seeing profits from your painting business.

How will you price your services?

• Hourly?
• A flat rate?
• By the square footage?

Using a price formula can aid you in charging a fair price that will still allow you to make a profit and stay competitive.

To get started, take a look at the following pricing formulas.

Base Hourly Rate

The base hourly rate is the hourly wage you will pay your employees. To figure the hourly rate, divide the amount of an employee’s take-home per week by their billable hours.

It would be ideal to allocate 40-80% of your business revenue to pay your employees. 

Billable Hourly Rate

The billable hourly rate is the amount you charge a client for each hour of work.

To calculate your billable hourly rate, determine your profit margin and overhead expenses. Then add that to your base hourly rate to determine the billable hourly rate.

Bidding

Bidding is a pricing option used by larger companies to be competitive in project bidding. To calculate a bidding price, you’ll need to consider all the pricing information for: 

• Materials and supplies
• Permits
• Taxes
• Labor; and
• Other expenses associated with the project

Total Quote

Calculate the total quote by adding your bidding total and labor hours together. 

An accurate total quote provides transparent information for the client while ensuring profitability for your company.

Step 4: Take the Current Market Into Account

The last step to building a profitable painting business is to do some market research.

Considering the painting market and the competition will give you valuable information to guide you in making decisions about setting up and managing your business for the future.

To get a better picture of the painting market, consider the following categories and questions:

• Market size - How many would be interested in your services?
• Demand - Is there a need for the services you offer? If so, are you charging enough?
• Location - Do your customers live in the general area? Can your business grow to neighboring cities?
• Saturation - Is the market already saturated? How many other painting businesses are in your area?
• Competitive pricing - What are other competitors charging for similar services?
• Local economy - What is the average income in your area? What is the employment rate?
• Pricing - What are people paying (or willing to pay) for your services?

Is a painting business profitable?

Taking the time to look carefully at the market can help you answer that question. 

Based on the information you gather, you’ll need to make some decisions. If you find out your area is already saturated with other painting businesses, you may need to rethink your prices or plan a way to expand. 

But think twice about lowering your prices to beat out the competition. Instead, focus on providing quality work that differentiates your business from the competition.

10 Tips for Increasing Your Painting Business’s Profitability

You don’t want a static business. Rather, you want your business to continue to grow, both in size and profitability. 

What steps can you take to safeguard your profitability? Take a look at the following tips.

#1: Increase Your Cash Flow

Not having cash on hand when you need it can significantly affect the growth and profit margin of your business.

But how can you improve your cash flow when you are relying on clients who may not be as prompt as you’d like?

Loans are an option, but they are an expensive option. Paying interest and other bank fees defeats the purpose and often ends up costing you more than you bargained for and eats away at your profit.

So where can this needed capital be found? Enter Flexbase.

Flexbase provides two ways to improve your cash flow:

1. The Flexbase Card
2. Flexbase Payments

The Flexbase Card provides funds for necessary purchases. With 0% interest for 60 days, you’ll buy some time to receive payment from clients to cover those Flexbase Card purchases. Get approved today.

Flexbase Payments streamlines the invoicing and payment process so you can get paid faster. Send out automated payment reminders, and when necessary, you can use Flexbase Payments to send legal notices.

Get paid ten times faster with Flexbase and focus on your business’s profitability instead of dealing with cash flow struggles.

If you’re not convinced of the importance of positive cash flow, consider these reasons for making cash flow a priority:

• Accurate assessments - Knowing your cash flow status gives you a clear picture of where your business is at any time.
• Stability - Positive cash flow means you’ll be able to pay employees and suppliers on time, improving your reputation and avoiding unnecessary fees.
• Future growth - Having working capital means you’ll have the funds available to expand your business when the time comes.
• Less debt - When you have cash on hand, you’ll have less need for loans that result in debt that can quickly become overwhelming.

#2: Analyze Your Business

When you analyze your business, you increase profitability by: 

• Setting yourself up for future success
• Navigating your growth strategy; and
• Making better decisions

To increase profitability, ask the following questions about your business: 

• Are transportation and supplies costing us too much? 
• Is there unnecessary spending we can cut out?
• Can any resources be realigned or designated to other areas? 
• Which jobs are our go-to for the most profitable? Which jobs are the least profitable?

You might be surprised at some of your answers, but it’s important to be honest and realistic. Seeing problems before they become major issues gives you time to make adjustments and increase your business’s profitability. 

#3: Step Up Your Marketing Game

If you don’t have a marketing degree or much experience in the marketing arena, developing your marketing game can be intimidating. 

Besides that, you know marketing costs money, so you want to make sure you use your marketing dollars wisely.

When you plan your marketing strategy and budget, think with the end in mind. Increased profitability will be worth the time and upfront resources in the end.

Marketing has many facets. Consider the following tips to profitably market your business:

• Design an attractive and engaging website.
• Take advantage of local SEO strategies.
• Invest in paid advertising.
• Market using physical mail.
• Utilize email campaigns.
• Collaborate with other tradesmen – construction companies, contractors, etc. 

Dollars spent on marketing can actually end up making you money and increase your profit margin by: 

• Creating interest in your business
• Attracting new customers
• Building relationships with customers
• Increasing long-term customer value 

You very likely won’t see profitability right away from your marketing efforts. It takes time to see a return on your investment (ROI) — often up to six to twelve months.

#4: Focus on Clearing Up Any Outstanding Debt

Debt can be a burden that holds you back and drains you of finances that could be better used to build your business.

With debt comes interest payments that can limit your profits.

To increase your chances of making a solid profit, concentrate on paying debts as soon as you can. When you’ve got a debt paid off, you can then use the funds you were using for debt payments and interest on other parts of your business, like marketing or better equipment.

#5: Create a Budget and Stick to It

A budget is an essential tool for your business’s success. Without one, you’re missing crucial information you need to make decisions about your business.

With a meticulous budget, you’ll have an accurate idea of your spending needs. And if cuts need to be made, you’ll have a better idea of where to start to eliminate things from your budget.

Especially if you are a new business owner, it would benefit you to do some research on industry standards. Check out the Internal Revenue Service (IRS) website and talk with other small business owners to get an accurate idea of the percentage of revenue you should budget for different costs.

With that information, you can create a budget including all the pertinent aspects of your business.

All businesses go through times when finances are tight. Anticipate those times — during the winter months when business slows down — and be ready to make adjustments. To help with changes, ask yourself:

• Am I overspending in a particular area?
• In which categories of my budget can I cut costs?
• Are there any expenses I can eliminate?
• Is there another area where I should be committing funds?

For example: Is your current marketing strategy making the best use of the funds you’ve allocated? Is there a better way to use those funds?

Answering those questions honestly can help you work within your budget for increased profitability.

Things change all the time, so assess your budget and spending on a regular basis to make sure you’re not leaving out an important budget need or are spending money where it’s not the most beneficial.

#6: Consider Offering a Referral Program

Many times word-of-mouth marketing is the most effective. Referral programs not only provide you with new clients but offering benefits to current clients can mean they stay with you longer.

There are all kinds of strategies for using referrals for profitability, like: 

• Having contests or giveaways
• Gifting coupons or discounts
• Initiating fundraisers for charities
• Implementing seasonal campaigns
• Offer gifts for new customers
• Offer exclusive events for loyal customers

With referrals or some of these other gifting options, you may be worried about the money you’ll lose. But you’ll make up any lost revenue with new customers that are paying full price.

#7: Team Up With Local Businesses

Increase your customer base with a little help from your friends who are other small business owners.

Clients looking for your services are also doing business with other businesses. So work together to create leads that benefit you both.

Painting business owners can work together with local businesses like:

• Construction companies
• Designers; or
• Paint suppliers

If a designer or contractor is working on a project that needs professional paint services, they can send customers your way. Paint suppliers or hardware retailers can advertise your services as well. 

Consider these additional ways to find businesses to team up with:

1. Join a Business Network International (BNI) group. BNI is an organization that uses networking to help businesses get referrals. Painting business owners can take advantage of this resource to meet with other businesses that may want to partner together. 
2. Contact Homeowners Associations in your area. Because HOA residents have relationships with those in their neighborhood, they are an excellent resource to help spread the word about your local, reputable painting business. 

#8: Consider Expanding Your Services Offered

Are you offering painting services to your clients that promote profitability? Are there additional painting services you can provide to help your business make a profit while also taking care of your varied expenses?

Are your services limited to residential? Maybe you should consider adding commercial painting services to your business.

If you currently focus on interior paint jobs, maybe you should investigate the money you could make by adding exterior painting services to your list.

Being willing to adjust and make changes may open up doors for expansion, growth, and profitability as a painting business.

#9: Expand Your Service Area

Is there a need for professional painters outside of the area you currently serve?

Research neighboring cities and rural areas to gauge the competition to successfully expand your service area. Remember to consider extra costs that may come into play —  like increased transportation costs or costs related to increased employee needs.

#10: Focus on Retaining High-Performing Employees

Keeping your loyal and hardworking employees is one of the most important things you can do to help boost profitability.

Every time you need to replace an employee by hiring a new one, it costs you money and eats into your profit.

The Society for Human Resource Management (SHRM) reports that replacing an employee costs an average of six to nine months of that employee's salary. That’s a hefty cost!

For example, if you lose an employee that was making $20,000 a year, it could cost you up to $15,000 to replace them.

And if you are replacing employees often, you’ll lose out on profits because of the revenue you’ll be spending on hiring new employees.

So, employee retention is key. What can you do to make sure your employees want to stay? Consider these tips:

• Focus on your company culture - Create a culture in your business that prioritizes teamwork and values every member of your team. When they know you’re working together, they’ll be more likely to stick around.
• Remember employees have a life outside of work - Some employees have comfortable and low-stress homes to return to, while others may experience conflict and worries at home. Get to know your employees and show concern and care for them, being compassionate and extending grace.
• Make safety a high priority - Whatever dangers may be involved in the painting industry, always take all precautions and follow safety protocols. Safe employees return to work day after day.
• Reward exemplary performance - Show employees how valuable they are and how much you appreciate them by offering promotions, giving raises, and extending bonuses.