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Painting Pro Times, the source for paint professionals!

Growing a business can be exhilarating and just as easily exhausting. The fun part seems to come largely from the anticipation of achievement and success. The excitement of project awards, new equipment and hiring great people puts the fuel in the tank to move forward. Although some mornings and even late evenings, people issues, both customers and associates, rise up and challenge the best go getters.

With the economy expanding, paint professionals may lean towards faster growth via commercial work through general contractors or construction managers. As sales increase, cash flow may rise above all other issues. In fact, working for GCs can kill the bill payment cycle.

Old Guy Talking

After all, working with a company that provides 10- 20 projects per year is more efficient than doing the same for 10 different outfits. Maybe not so much…if GC work was that great, every successful paint professional would ride that train. Before jumping in or hitting the gas if you are already there, take a minute and consider some 30 year old advice. One of the first things dad shared, when we expressed an interest in emphasizing GC run commercial work was to go forward methodically and be fussy about who we worked with.

He cautioned, “at the end of the day, project size and work volume is not as important as what is in your pocket’. Dad knew GCs tend to price shop and hold onto to your money longer than commercial facilities and other owners. We reasoned that getting projects directly from owners, without GCs, was a slower growth process, because there were fewer projects in the direct market and it was just as competitive. Thinking back, we listened, and concluded we were too smart to let anybody take advantage of us financially.

Like the Talladega Nights characters, we rationalized, “if you’re not first, you’re last’. With both feet, we took the GC plunge. Everything was great for a while, we landed bigger and more projects. Thru GCs, by 1987, we grew sales to 1 million plus. It was right as the US economy was whacked with a strange, once in a generation financial crisis. The infamous savings and loan scandal wreaked havoc on the construction industry.

School of Hard Knocks

To say the least, the GC strategy brought in a pile of work, but we could not pay the bills. Receivables grew to nearly $200,000 with many GCs taking an unreasonable 75+ days for payment. Of course, a couple contractors went under and did not pay anything. After zooming thru the extended credit line, the happy, go-go growth party broke into change now, or take an unwanted, graveyard nap. We stopped submitting proposals to most GCs.

Overnight, we became very selective and only extended limited credit to GCs; we performed on one project at a time per company. We checked their credit and amended contracts to 30 day terms, no retainage and a 2% discount for 20 day payments. Most GCs balked, but still sent plans and called seeking proposals (nowadays everything is email and plans are digital). We slowed down, took the time to foster relationships with facility owners and eventually the near funeral procession turned into a slow, deliberate achievement march away from the red tide.

In the News, AkzoNobel has announced that $5.5 billion will be distributed to shareholders when the sale of the chemical business closes.

Benjamin Moore announced their Color of the Year 2019 – Metropolitan AF-690, a stylish gray with cool undertones. According to Ellen O’Neill, Benjamin Moore Director of Strategic Design Intelligence, “It’s a color in the neutral spectrum that references a contemplative state of mind and design. Not arresting nor aggressive, this understated yet glamorous gray creates a soothing, impactful common ground.”

PPG reported their 3rd quarter financials; net sales of about $3.8billion are 1 percent versus the prior year. Apparently, sales volumes were flat versus the prior year in aggregate due to a 2 percent offset by lower U.S. architectural coatings volumes from the move away from Lowe’s.

Rodda Paint introduced a new product; CoverCoat XL has a proprietary formula with featuring a wide range of application capabilities including anew moisture tolerant, all season, 100 percent acrylic exterior paint performing down to 40 degrees.

RPM International, the parent company of Rust-Oleum and Zinsser, among many others reported their 2019 first quarter sales;  Net sales were a record $1.46 billion, up 8.5% over the $1.35 billion reported a year ago. “We saw strong top-line sales growth in the first quarter…“Our team is focused on driving increased profitability, long-term growth and enhanced value for our shareholders, and we are making good progress in executing on our operating improvement plan…stated in part, Frank C. Sullivan, RPM chairman and chief executive officer.

Sherwin-Williams is the first major manufacturer to develop an industry-wide recruiting and online training platform. Reportedly, the initiative will focus on three major areas: career advocacy, education for new painters, and recruitment resources. “The concern we’ve been hearing from many of our partners (paint professionals) is real,” said Jeff Winter, vice president of marketing at Sherwin-Williams. “The data shows that fewer people are choosing to become professional painters, and the problem is likely to get worse unless we act now. This is just one way we will continue to work with our professional painting partners to ensure they can grow their businesses profitably.”

In other SW News, the California lead based paint appeal was rejected for Supreme Court review. This means Sherwin-Williams and Conagra Brands will have to live by the state ruling that requires both companies to pay a sum total of $409 million for lead-paint remediation in California.

PPT encourages professionals to have great careers and prosperous businesses, but bigger projects and working thru GCs may present challenges to cash flow. So eyes wide opened and maybe heed old guy advice.

Thanks for reading!

Mark Casale, Editor

Please send comments and corrections to MarkCasale@paintspecialists1.com.


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