Status Check, How Are you- optimistic or pesimistic? Options

[Kevin Nolan]

Hello All,

Raining for like a week now. This is May, people have graduation parties and weddings, and they need work done asap. It's usually beautiful in Philly in May. Too bad it's raining.

For a little while, it feels like this economy might be getting better. I am not so sure.
We have a decent amount of work lined up, 5 weeks. Of course we are much smaller than we were a year ago; by half.
We have 40 people now, last year over 80. Big changes.
We probably have the only back log we'll have all year.

We are profitable again; for the first time since Oct. It was a scary winter. April was a decent month, all things considered.
We cut over head in half, cut a lot of b and all c players, got productivity up, streamlined office; so we're gonna make it.

Here is one for you: When the someone calls our office, it is answered 100 miles away, in central Pa. I have a wonderful call center answering my phones, scheduling estimates and filling my data base. Our admin expense has dropped 80%. Last year we had three admin assistant, now we have none. The World Is Flat.

Anyway we don't talk that candidly on this site anymore. It's tough to talk about businesses being bad. And it is bad for some and maybe not so bad or good for others.

Status:
We're lucky in Philly, when the sun comes out we have a pretty stable economy. It never took off like other areas of the country, so it isn't falling that much. We have diversified economy and there have not been that many layoffs.

The senior VP of my Bank said 2010 was gonna be a tough year.

I am not too optimistic for the next year or so. I figure only be optimistic when the stakes are low, like the status of a professional sporting event.
When the stakes are high, it pays to be a little pessimistic. You wouldn't want your pilot to say, "I think the wings are fine you don't have to de-ice them.

I think I am gonna make it and be successful, but that's just cause I am cocky;-)

My daughter sent me a nice card: On the front it said "The best way out is always through" - Robert Frost.
What was nicer was what she said inside "Dad, people thrive off of your optimism, so stay upbeat."

Pessimism doesn't work that well. So I guess I'm gonna go for the optimistic view point and figure it will stop raining soon. I don't know how you folks in Seattle do it.

Anybody else want to check in from other parts of the country?
Surviving in Philly.
All the best,
Kevin

[Chris Murphy]

Anyway we don't talk that candidly on this site anymore.

I've found this site to be anything but candid- that's why it's always dead.

That shot taken, sorry to hear you have had to make the changes you have. I'm a single-man shop, and I haven't been in straits anything like this since 1980, when I moved from Binghamton, NY to take a job in Philly with Steve Yassky & Wallcrafters. In a way, you're lucky, because Philly is not only diversified, but it's a huge metro area, so you figure, there's gotta be work somewhere there. (Of course, a huge area also means a lot of miles chasing rainbows, too.) Glad to hear that you believe your business will survive- you've always sounded like an energetic, ethical, knowledgeable contractor, one that any consumer should wish for.

What I'm getting constantly hit with is people wanting hugely discounted jobs- I'm talking 70% less than what I want for them. I'm a bit of a specialty contractor, kinda an artisan of sorts on some of the hand-made materials, and that mind-set doesn't let me empathize with someone who thinks all labor is equal. Greed got us into the economic situation the globe is in, and it feels like it hasn't loosened it's grip yet. I'm with your banker: I think the steep drops are over, but a recovery is going to take a year or so to be even felt, much less be a force.

[Frank Campanelli]

Kevin, as always, a very accurate assessment of the situation. Our downsizing and cost-cutting has mirrored yours, and we somehow kept the wolves out in the front yard this past winter. The Hartford market has always been the ugly stepsister of the neighboring metro areas, and now the value buyers are fewer and further between than ever before. I pride myself in the fact that my 4+ weeks of backlog ( for my 40% smaller workforce) was not won as the low bid, but it is very tough to see legacy customers going the low bid route, even after letting us give it our best shot. ( i.e. REAL CHEAP, headache-inducing slap work) Yes, it is capitalism at work, but that doesn't make it any easier to swallow when it is apparent that you are just another contestant in the (crowded) pageant. I almost surprised myself with the quickness I informed a prospect that I wasn't interested in even looking at her interior when she shared that I would be the 5th, ( and probably not last) quote on a partal repaint, just because I was tired of the battering. Said I would save us both a little time, since I was sure that in her neighborhood, I wasn't going to be the lowest price.
I share Kevin's outlook; I am very concerned that here will be a non-existent 2nd half of the summer, if things don't start looking rosier in the general economy soon.
But I've been here and done it before - here's hoping we all get to the other side with a renewed appreciation for keeping a our operation as sharp as we can, and follow up every lead in the face of withering negativity. An old sales coach got this across my inbox today:

Reflections on unconditional and Equal Human Worth:

We are all basically the same human beings who seek happiness and try to avoid suffering.

Everybody is my peer group.

Your feeling "I am of no value" is wrong. Absolutely wrong.


- The Dalai Lama


Not bad.

[Chris Murphy]

If I may add a couple more things (it's not like I'm soaking up bandwith here ; >)-
-This is my 30th year doing what I do (walcovering installation). I have seen worse overall economies, such as the Northeast in the '70's. Some areas there are still shrinking, like where I'm from in Upstate NY. There is some comfort knowing this time is a national situation. There is also some pain with the same thought, as there are no 'hot spots' to move to, as when I was younger.
-In every downturn, there ended up to be pent-up demand: folks waited to see how their situation would pan out, and when the felt more confident, would look to start projects. I also fondly remember all those people- designers, contractors, customers- who did projects just because they knew folks like me needed the work. I try to go above and beyond on all my jobs, but for these people, the sky is the limit, and always will be. Conversely, I also remember those who try to take advantage when they can.

I'd have to assume that most of here, PDCA members, give good value for the money. We also know the cost of doing business, as business people, and the cost of trying to go cheap, as consumers. Here's to us all hanging in there until people remember that, "You get what you pay for."

[joel]

Kevin, Chris, Frank,
Here in Portland, Oregon the rain is about to let up. We have a few jobs lined up - both Residential and Commercial. What is helping us survive is to push our waterborne wood finishing and refinishing systems for woodwork (new and old) and cabinets. We are the only contractor out here with experience in doing this and of just a handful nationally. I just gave a powerpoint session at our western Conf. of PDCA in LakeTahoe on the Green Finishing. If you check out our website under articles and newsletters you will see what we are doing. We will have the powerpoint up there for downloading as well. Offer something that you do well and is in demand, market the heck out of it and be the most educated resource. Do a brochure, win an award or something to give appeal to the speciality. Our brochure, reprint of Top Job award, safety awards and articles speak volumes for our finishing methods. Our repaint work is picking up nicely, many appreciate the maintainece upkeep we promote as well as long time customers, some for over 20 years. It would be real hard to be just starting out in business. Things are looking brighter and we need to stay posiitive in everything we do. Join us out here in Portland - July 16 to 18 for AST - Residential Forum. We are hosting a great day on Thursday with shop tours (including mine), factory tours of Purdy Brush Co and Rodda Paint. Hosted lunch, drinks and relax time with tours at McMenamins Edgefield and a welcome reception. If any want to come out even earlier or stay later, we love to extend Northwest Hospitality. Hope to see many out here in July (perfect 75 - 80 degree weather with no humidity and everthing is green).
Joel

[Steve Hobson]

Hi Guys

Here in California it is really bad, before now I could hardly talk about it. I still can hardly talk about it, I don't even listen or watch the news. I have been in business since 1970 and have never seen it this bad or depressing. I am trying tying trying to stay positive..............it's really hard. I will get thru this even if I am out doing it all myself. We keep marketing and try to find new ways to set us apart from our competition besides price. Everyone wants the stimulus price out here.

I do have alot to be thankful for. During this down economy I have worked out faithrully every other day and walk every day (sorry Kev, running is out) to work out the frustration. I also play tennis a couple of nights a week and beat the hell out of the ball.

I am lucky as I have a young, beautiful wife who is possitive and very supportive. I certainly hit a home run there. She is one of the best things that has happend to me in years. I have my health, a tremendous will to survive and proper.

Not much more to say.........it sucks.

All the best friends

Hob

[cook]

Yes it is bad here in Northwest Montana also. New Residential does not exist, Commercial is in a panic, jobs going way to cheap.( how are we going to ever raise them back up?) Some remodels ,but the custom lakeshore log homes are all on hold. We started doing parking lot painting 8 yrs ago ,and have moved into city ,county and smaller air strips,and that is holding us together. Looking a little farther than we would like, and bidding water and sewer plants. If stimulas funds every get into gear maybe , add signs and traffic control on a small scale.
Overall I really wonder how next year is going to plan out because there is not alot to save for winter for what few jobs we are doing.
Am looking forward to camping with family and doing some hiking. With unemployment at 12.7 % in our county ( was 1.2 % two years ago) good help is availible.

[chris nelson]

Here's to us all hanging in there until people remember that, "You get what you pay for."
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[Chris Murphy]

jobs going way to cheap.( how are we going to ever raise them back up?)

Do you think someone can provide the same service, the same quality as you with a much cheaper price? If so, that is "capitalism at work," as stated in a previous post. More likely is bad service with so-so to rotten quality. Now that the job didn't last and has to be re-done, how expensive do I look now? Don't expect the person that went for the cheap job to admit it; egos are hard to crack. But do expect others to notice, and finally come around to your services, whose cost is based more in reality. Just expect a struggle to stay around long enough to see that turn.

[cook]

In the commercial biz, it goes to the low bidder most times. There are some invite onlys, and I do have to work harder and get visible to archetects, and builders. Most of our work as been thru plan centers and bidding projects out to bid. The game seems to bid low and make money on change orders. That is bad business to me, but so is cutting # of coats or using lower quality / cost material, it does go on.

[topcoat]

Kev, Murph, Frank, Joel, Hob, Cook and Nellie,

In life, death is the great equalizer. In business, recession is the great equalizer. Now is the time to be networking and communicating not only with other paint contractors, but also with other businesses in general. You can learn alot from the ways that others are responding to current consumer trends. Many of us paint contractors were carrying too much cheese for too long and have had to trim down in order to survive. Its truly all relative. Kev laments losing half, going from 80 to 40. I would not in a gazillion years want to be carrying 40 employees booked just 5 weeks out. My business has tripled in size in the past 8 months, going from 4 to 12 and likely hitting 14 in the next week or two and we are filling in a 16 month calendar. It doesnt matter how many guys you have or how much volume you have. I would rather have two employees that I could book out quite far at a good profit margin right now. It doesnt seem to be a good time to be thinking size and volume, its more the age of tight belts and watching margins carefully.

It is very competetive right now. This makes it all about relationships. Maintaining the ones you have cultivated over the years, and building new ones that are just as strong. We had a couple of instances last fall, where local competitors would go to jobs that we already held signed contracts for and try to undercut us. Fortunately, the pm's wouldn't consider a lower priced alternative, and that is due to the service, quality and fair pricing that we have always offered. Alot of us built big ships when times were good, but never really considered what kind of a hit that ship could take. There were about 7 years of fat economy. Sometimes we all forget that whenever anything reaches its peak, it invariably enters a state of decline. The economy peaked and declined. Be one of those paint companies who can peak now.

[cook]

topcoat, nice to hear your doing well. Good words. Something for me work on.

[topcoat]

Cook

The glass is still half full. Its just a slightly different glass right now.

[Kevin Nolan]

Hello all,
Not bad 12 replys, over 300 views. Anybody else want to chime in?
It stopped raining here in Philly. Can't help but be optimistic when the sun is out. Make Hey!
All the best,
Kevin
(PS was that a dig Topcoat?)

[Steve Fountaine]

Here in Washington DC large commercial jobs are non existant. Residential new construction is non existant. This is putting a glut of workers into the market who may or may not be competant but it has driven down pricing as people will work for next to nothing.

Our approach has been to become diverse and go after unique projects that the every day joe likely can't do. Fortunately the diverse thing has been happening for several years now. We started out doing residential repaints, slowly grew into maintence painting for property managers (largely class A office buildings) and have managed to develop some GC's that are loyal as long as we stay competitive. We tried; and largely stay away from the larger GC work that is in many cases putting us up against 5-8 other painters. In the past year we have developed good working relationships with a few contractors that do a lot of government work. All these relationships have really been whats getting us through this.

I run about 30 painters and we are currently ahead of our sales goals for the year; profit only slightly off. I'm still up at nights stressing about it. We've trimmed everywhere we can think of like many of you. We are also taking on projects that are not just strictly paint or wallcovering. As an example we are doing very small build outs for Property Managers that really trust us.... sub out the carpet, electric etc. My key staff are now required to come to our weekly meetings with new ideas, something they learned during the week, or a new niche that we can get trained on. This has worked out well as everyone is into it and they understand that if we continue this type of thinking we will come out better on the other side of this thing. I was proud of my estimator who investigated estimating software for architectural drawings and has now implemented a solution that cuts our takeoff time by 30-40%.

Perhaps we are lucky, as some around here say that DC is fairly recession proof. I still won't be comfortable until this madness is over.

Wishing you all the best,

Steve
Premiere Painting

[joel]

Steve, Kevin, everyone
Good to hear from the cross section of America. The sun is out here and we will be up into the 80s this weekend. The phone is ringing, many requests for bids, old contacts calling, ect.
Just this week a request for woodwork refinishing in US District Court (3 courtrooms) and awarding it via craftsmanship, experience and not low bid. GSA is a good opportunity for niche work. If you come out here to Portland for the Residential AST and shop tour I will show you projects, products used and training you can use in your company that I will generate additional work for your business. There is nothing in this for me except to educate fellow PDCA members that there are new ways to finish, refinish and maintain woodwork using waterborne methods. Exciting opportunites are available to step out of the box. Just ask Doug Hampton in LA about the system we have developed. They added a great client in Southern California. Hope to see many of you out here in July.
Joel

[topcoat]

(PS was that a dig Topcoat?)

No, not at all. Just an honest response. This thread has been good that way, this forum could use more genuine discussion like this about business. Thanks to all who have contributed.

[Ken S.]

Kevin, and others,
West Central Florida here(approx. 8 miles north of Innisbrook- I'm in Pasco County).
I've been a painting contractor since 1985 here(legit, that is).
This is the largest down turn I have witnessed in those years.
I'm a "Father & Son" residential repaint business.
My First qtr. numbers in sales volume was down 60% from same time last year. I have laid off several employees(painters) and cut back in office. We have been able to just slide by and pay our bills.
The last 2 weeks have seen a "barrage" of estimating requests and starting to assemble a schedule that goes further than 2 days!!
My son had been part-time employee for the last 5 months. now it's closer to 40 hrs.
I have called back one great employee and hired a 20 year experienced painter on a part-time basis.
Bidding wars are out there, selling our wares are very important. I am noticing some are bidding for just wages, and others, even less.
Marketing, and doing it correctly, is very, very important.

...I'm a survivor, we're here to stay.

[Kevin Nolan]

Ken,
I hope those green shoots take off. Florida was the first in this thing and I hope your pointing the way out of this.

Sounds like things are tough all over.
Here is a positive thought-
Financially it may be tough on us, but psychologically we can be tough. There was very little opportunity for growth these last few years. When you are at the top of a bubble you are just waiting for it to burst. It has and now that we are near the bottom, there is nothing but opportunity in front of us.
Have a great week.
Kevin

PS. Brandt, how is Colorado?

[Brandt]

Mixed bag in Colorado

Most residential companies are starting to pick up a bit more business now (part season) but figures are tight.
Same story as across the country - legal businesses face more competition that is below cost - nothing new, just more of it.

Commercial contractors bidding has slowed, many more GCs bidding each project and an additional slew of painting contractors.
Capture rate is way off. Sales volume down for most. Prices - more competitive than ever.

Since the painting business in Colorado has very little friction to get into (regulations, licensing, employment laws with no teeth) this isn't going to change.
At least neighbor Utah has real licensing that is of some support to painting contractors there.

Businesses (both Comm. and Res.) with strong specialty markets / niches are a bit ahead of those with none.
Even 'Relationship Business' is impacted - consumers of all types are wanting and looking for their dollars to go further.
Relationship business is still providing work for many.

It will be interesting to see how attendance is at Estimating Workshops I'm putting on in June and July in Colorado, Utah, New Mexico and Indiana.
I hope packed!


Keep the faith pros -and enlarge the target you're shooting at, i.e., more sales leads than ever are needed to get more business.

Here's to the survival of the pros - through these very tight economic times.


Brandt