Painting / Construction Business Pivot to being SELLABLE (and as autonomous as possible)

[DCBrooks]

Good Morning All,
I hope this post is in the right place, if it isn't let me know. I will start with some back story for reference, then go into the actual goal of this post My name is David Brooks, I am 34 years old the owner of a local (75 +/- mile range) painting and contracting company, I initially entered the business world full of dreams with infinite stamina The vision of "Making all things new with integrity excellence and pride" has never faded how ever there have been a TON of bumps bruises and expensive lessons along the way, I have certainly paid my tuition to the school of hard knocks hopefully in full, through all of it my integrity in my decision making has never faltered and amazingly enough after each trial, we would experience a boom and go to the next level after a time of perseverance.

One of my major faults has been the lack of proper plans and goal setting (THANK YOU MJ for covering this elaborately is Fastlane millionaire and some in unscripted , I plan on using sumo in this process!) this has allowed me to have my focus distracted by shiny objects because I would get bored with the monotony of life, there was nothing new under the sun in the painting field to me, I am 3rd gen and continue in a state of learning but instead of having goals to stay faithful to I started a different branch of the company (distraction 1) we did well on our projects but after investing 60k into that branch between expensive equipment and startup costs and waisting a year of dividing my attention from my real money maker I have decided to close it, realizing it was alot more time and effort for alot less profit. Around the same time I purchased a 10 plex, I had the 10plex all of a few months then a nasty wind storm came through, every thing seemed fine, however months later I notice a tenants ceiling bowed badly, turns out it was a bad water leak, one by one I evicted folks till I had an empty building and after the lengthy eviction preocess months later I had discovered it to be roof leaks from the storm. Long story short insurance still has not paid and I spent 800k fully renovating the building, we have retained an attorney and the court date is 06/22/24. This was a paracitic drain to my successful painting and contracting op (and my personal wealth accrued) we went from being able to fully self finance 400k projects and wait months for payment to have net op account down to 5k (NOT good) and our company saving was cleaned out as well.

Heinsite in high places I now see the painting company should have remained my 100% focus, this is the danger of NOT having written goals, I know to some of you its not alot of money but it was really nice making 250-330k per year at 34, all of these distractions dwindled that account funding these ops and now it is like starting over, yes, I understand we are poised for a great case and insurance will have to pay with bad faith damages as well, however even if that is the case I dont want wealth to rely on a case. I have set out to utilize this as an opportunity to 100% refocus my current efforts to this company, I am hoping this brutal honesty can help some others avoid the same mistakes, and treasure the good oportunities they do have, dont get me wrong I have other goals, ideas, inventions that are planned and thought out, but this is a surefire opportuinty I already know how to grow. After listening to fast lane millonare, unscripted as well I set the goal of the following for my company:
1. Rebrand
a. The current name has my family name in it "Brooks Quality Painting and Contracting isn't exactly a sellable name IMO (open to opinion) I am thinking Alpha Premium Coatings with the goal of being established as industry experts (which we are).
2. No longer doing business trying to win at other peoples game.
a. We have always been a premium service priding on process, planning, and timely performance, I am no longer trying to win on price, I am focusing on the clients that need the service done properly, on time and professionally, and are willing to pay to get what they want, I am not going after low leverage clients any more, its a waist of time for how we opperate (and how we pay our people).
3. Systemizing as much as possible
a. The ONLY way any type of human resources op can be even semi-autonomous is by having a Rock solid company culture, a specified accountability system (checks and balances), and DETAILED processes so that results are consistent and repeatable every single time, part of this will be contual making of processes every project and reflecting on areas that could have been improved along with things that went well so it is continually getting better.
4. Setting Sumo Goals and following for the company to be SELLABLE within two years this iscludes processes, people, procedure, client lists, I believe its very atainable to get back to 1 mil plus this year and have a goal of 2 mil within 2 years. This should set up a great sale price for the company. My goal is to truly have a great machine that some one else will love for years to come, my passion for excellence will not and can not side line on this.

Some thoughts for this thread:
Objective: Be brutally Honest, I am asking for respect not just to my honesty but if others chime in, we are here to sharpen one another and everyone has to start somewhere
Goal: help younger folks avoid the same mistakes
Goal: help others in similar situations, hopefully, help them structure their company, utilizing the hive mind collective of this forum ( group effort)
Goal: help the contracting industry don't see alot of it here

I am really hoping this helps others and welcome any one to reply as things go on, even if your not in contracting alot of laws or rules in business are pretty universal, if you havea similar situation feel free to put it here after its said and done I hope this documented process helps other new comers along their journey. I apologize in advance I am not a writer per say so thoughts may be jumbled.

for me the first Items I am looking at are:
1. mentioned above potential name change to aplha premium coatings circular logo wolf silhoette for the logo some what greek ish letter appearance the branding goal is to be established as leaders of the pack or experts in our trade, on the residential end I see branding op (IF we go that route, currently primarily commercial) to give a cartoonized wolf or such as a igft to younger children? (Might be over thought)

2. Officially selling my equipment from the distraction company (that is already in the workings)

3. restablishing old accounts and developing new ones.

Thanks in advance, I am excited to see this process through with yall.

 

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[Bounce Back]

Context: I've sold a smaller revenue local service company compared to what you've got. Definitely not an expert in the process.

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Here is what I'd recommend after reading the bulk of your post. Understand if you are going for absolute peak perfection of sell-ability here it may take a year or so - otherwise just accept it won't be perfect.

-1) Understand the sale process for a service based business is usually going to take a while (6 months - 1.5 years or more depending on the market). Ironically you will work the hardest on your business than you ever have while selling it. Knowing this (and/or feeling it yourself) may be enough to shake off the cobwebs and get you back just thinking about owning it.

0) Engage a reputable local business broker now with these questions and tell them you are in the planning stages. These folks are worth the price of using if you get with a good one and easily pay for themselves. Selling a business isn't just like a commodity or real estate - a good broker can give you advice that can make 100%+ or more in the selling price of your business among other things.

1) I would not change the name - leave that risk to the new owner. No buyer is going to care at this stage to be honest and you only risk making impacts to your SEO and increase confusion around customer reviews, billing, etc.

2) Yes formally document systemize everything that can be. If you are the owner/operator without a manager between you and the crew understand this will lower the price you can fetch (in most cases). If you do all the sales yourself understand this will lower the price you can fetch (in most cases). If its possible to promote or hire in these areas and see proven success you can squeeze some more value (and may find a second wind and end up wanting to keep the business haha).

You are going to have to dig deep here and be honest with yourself if this is going to be worth it to you. If you've not ever had a manager in place it is a whole different ball game than hiring your service employees and has a learning curve both to the hiring and managing of a manager.

3) Make sure your customers are happy now and develop processes now to routinely check in on them (don't annoy them though). This is going to matter a ton when it comes to the hand off to new owner - savvy buyers will know to spot check this.

4) I am not sure why the talk about other assets and the multi-plex are coming up - you should have those finances seperate. If you don't already - do it ASAP. Otherwise financial sharing through the sale process is going to be an absolute nightmare.

5) Cut every single monthly recurring expense you don't need now. Any can you've been kicking - now is the time to get it dealt with. The longer this shows off your books the more real it is.

6) A lot of buyers want hope of growth - develop a realistic plan of increasing sales/growing if you can and show progress to that goal being midflight. Buyers don't want smells of despair but an optimistic handoff.

Throughout all of this you will develop a mindset shift - until now you've been seeing dollars come in and that is all well and good but you valued them at 1x because that's how they hit your bank account and spend for you in your personal life. Now every dollar you make in monthly recurring revenue (as an example) could be 3x-12x (broker will help you here). You will start to think about and value keeping customers way more. You will value getting new recurring sales much more as well.

-----------------------------------------

General book recommendation I've read bits/pieces of that you may find interesting: "Built to Sell: Creating a Business That Can Thrive Without You" - John Warrillow

 

[DCBrooks]

Context: I've sold a smaller revenue local service company compared to what you've got. Definitely not an expert in the process.

-------------------------------------------------------------

Here is what I'd recommend after reading the bulk of your post. Understand if you are going for absolute peak perfection of sell-ability here it may take a year or so - otherwise just accept it won't be perfect.

-1) Understand the sale process for a service based business is usually going to take a while (6 months - 1.5 years or more depending on the market). Ironically you will work the hardest on your business than you ever have while selling it. Knowing this (and/or feeling it yourself) may be enough to shake off the cobwebs and get you back just thinking about owning it.

0) Engage a reputable local business broker now with these questions and tell them you are in the planning stages. These folks are worth the price of using if you get with a good one and easily pay for themselves. Selling a business isn't just like a commodity or real estate - a good broker can give you advice that can make 100%+ or more in the selling price of your business among other things.

1) I would not change the name - leave that risk to the new owner. No buyer is going to care at this stage to be honest and you only risk making impacts to your SEO and increase confusion around customer reviews, billing, etc.

2) Yes formally document systemize everything that can be. If you are the owner/operator without a manager between you and the crew understand this will lower the price you can fetch (in most cases). If you do all the sales yourself understand this will lower the price you can fetch (in most cases). If its possible to promote or hire in these areas and see proven success you can squeeze some more value (and may find a second wind and end up wanting to keep the business haha).

You are going to have to dig deep here and be honest with yourself if this is going to be worth it to you. If you've not ever had a manager in place it is a whole different ball game than hiring your service employees and has a learning curve both to the hiring and managing of a manager.

3) Make sure your customers are happy now and develop processes now to routinely check in on them (don't annoy them though). This is going to matter a ton when it comes to the hand off to new owner - savvy buyers will know to spot check this.

4) I am not sure why the talk about other assets and the multi-plex are coming up - you should have those finances seperate. If you don't already - do it ASAP. Otherwise financial sharing through the sale process is going to be an absolute nightmare.

5) Cut every single monthly recurring expense you don't need now. Any can you've been kicking - now is the time to get it dealt with. The longer this shows off your books the more real it is.

6) A lot of buyers want hope of growth - develop a realistic plan of increasing sales/growing if you can and show progress to that goal being midflight. Buyers don't want smells of despair but an optimistic handoff.

Throughout all of this you will develop a mindset shift - until now you've been seeing dollars come in and that is all well and good but you valued them at 1x because that's how they hit your bank account and spend for you in your personal life. Now every dollar you make in monthly recurring revenue (as an example) could be 3x-12x (broker will help you here). You will start to think about and value keeping customers way more. You will value getting new recurring sales much more as well.

-----------------------------------------

General book recommendation I've read bits/pieces of that you may find interesting: "Built to Sell: Creating a Business That Can Thrive Without You" - John Warrillow

Thank you for the well versed reply, I will study this and get back with any questions, Cheers

 

[DCBrooks]

-1) Understand the sale process for a service based business is usually going to take a while (6 months - 1.5 years or more depending on the market). Ironically you will work the hardest on your business than you ever have while selling it. Knowing this (and/or feeling it yourself) may be enough to shake off the cobwebs and get you back just thinking about owning it.

Answer:
Agreed, I would say the perk here is we were doing close to a mil with 0, and I mean 0 advertisement other than a website, I am realizing most successful contractors spend 10% reinvestment into advertising / new client acquisition, IF I had that type of for site at the time we could have really cornered the premium market in the area, unfortunately I have been until recently too young in thought… I am now at the point of delegation, equipping and oversite. Make the process, teach the process, improve and enforce the process period.


0) Engage a reputable local business broker now with these questions and tell them you are in the planning stages. These folks are worth the price of using if you get with a good one and easily pay for themselves. Selling a business isn't just like a commodity or real estate - a good broker can give you advice that can make 100%+ or more in the selling price of your business among other things.

Answer:
Good idea. Other than a google search how would I go about finding one? Any forum members know of a trustworthy firm in the New Orleans LA area?



1) I would not change the name - leave that risk to the new owner. No buyer is going to care at this stage to be honest and you only risk making impacts to your SEO and increase confusion around customer reviews, billing, etc.

Answer:
I do agree and understand, I have elected to make a registered trade name or DBA as some call it for the rebrand, main reasoning is it’s a recommitment to my self and trusting the process, I started the old company at 22 with a paint brush and dreams, its done well, I also feel its had its time, I will share more about the new vision below, but I greatly respect your opinion.
To Be 100% Clear we have a sterling rep, its more because of the reasons mentioned later.


2) Yes formally document systemize everything that can be. If you are the owner/operator without a manager between you and the crew understand this will lower the price you can fetch (in most cases). If you do all the sales yourself understand this will lower the price you can fetch (in most cases). If its possible to promote or hire in these areas and see proven success you can squeeze some more value (and may find a second wind and end up wanting to keep the business haha).

Answer:
Lol. Yes, I am aiming to make the right culture and get the right people installed I want a measure of autonomy even before sale (we are 2 weeks from being certified foster parents, also looking to adopt) so I am willing to give my 120% to build it to that point and will in fact do it.


You are going to have to dig deep here and be honest with yourself if this is going to be worth it to you. If you've not ever had a manager in place it is a whole different ball game than hiring your service employees and has a learning curve both to the hiring and managing of a manager.

Answer:
Again fantastic advise, last year in particular I learned this the hard way, LOTS of wasted man hours “trust hires” (I think we have all made that mistake before) and thinking you can change folks, the truth I learned last year :

-Disc assessment ASAP, your not going to change WHO they are and WHAT they are, you can teach a skill but the frame work NEEDS to be there

-NEVER assume some one will do they right thing because they seem to have good character or claim to be a Christian (although I am one there have been a lot of horrible hires that way.)

-CLEARY set job descriptions in detail, with production and customer service expectation laid out, acceptable production pace and non acceptable pace.

-Have a rock solid on boarding system that shows a path way to promotion and incentive to keep them excited about their choice and affirm they are with the right organization.

-DON’T CHASE SHINY OBJECTS Make the plan and do the plan its nothing sexy, just consistency and hustle, wait for feed back loop and adjust.

My entire shift to Alpha Premium Painting is about Leading the pack in excellence process and people, previously I was an excellent crew with a commitment to quality but 0 branding and low commitment to marketing and growth, were keeping the excellence mentality but moving to making it a system to grow and teach others making a company that can corner the market in excellent and actually have established process.


3) Make sure your customers are happy now and develop processes now to routinely check in on them (don't annoy them though). This is going to matter a ton when it comes to the hand off to new owner - savvy buyers will know to spot check this.

Answer:
Agreed, this has never been an issue, more so didn’t focus on growth, we have a 60% rehire rate , which is great as a painting contractor seeing as how a lot of folks consider us their painters instead of a painting company.


4) I am not sure why the talk about other assets and the multi-plex are coming up - you should have those finances seperate. If you don't already - do it ASAP. Otherwise financial sharing through the sale process is going to be an absolute nightmare.

Answer:
Sorry for the confusion, separate llc, Had a windstorm cause 800k in damages, its been 2 years, I had to liquidate a lot of my personal wealth, sell our rv, and completely empty the business account to make 800k appear out of thin air, we have a court date may 22nd. I know we are poised to be made whole BUT I don’t want to rely on this, I don’t want any one else to make us rich (again) I would rather re ignite our path and if we win its icing on the top.


5) Cut every single monthly recurring expense you don't need now. Any can you've been kicking - now is the time to get it dealt with. The longer this shows off your books the more real it is.

Answer:
You are so right, I really wish I heard you say this a while back lol .. the recent tight times lead us to getting rid of any dead weight on the payroll, it additionally lead to checking all cc statements which sadly I was always “too busy” for in the past, there were so many software subscriptions, biz services and other crappy items we weren’t even using any more, I think it all totaled to around 10-12k a year on WAISTE on things we weren’t even using, also since we got rid of the dead weight on the crew margins have shot up on projects as well. So yes, thank you.


6) A lot of buyers want hope of growth - develop a realistic plan of increasing sales/growing if you can and show progress to that goal being midflight. Buyers don't want smells of despair but an optimistic handoff.

Answer:
Agreed. New Orleans metro area is an over-served area. Period, way too many paint companies for a relatively small city, additionally a lot of folks in this area have a cheapo or worse diy mindset, it's not great. Although we have done decent to date, part of my relaunch is targeting the north shore area where a lot of the money has gone to escaping crappy city politics, spoke to multiple designers, all the same, the area is underserved for QUALITY contractors that actually have process and do what they say when they say.

Here is some of the initial purpose and thought behind the rebrand, its really more than a rebrand it’s a recommitment to my values and what I know needs to be done:



Alpha Premium Painting Rebrand and Relaunch

Introduction:

• Reason for Relaunch: Transitioning from "Brooks Quality" to "Alpha Premium Painting." This shift represents a strategic move from a brand lacking clear focus and dedicated marketing to a more targeted and strategic approach. Despite growing to $800,000 annually with minimal marketing, we see significant potential for further growth with a more defined strategy.
• Challenges Encountered: We reflect on previous business hurdles, including complications during apartment complex renovations and insurance issues, using these experiences to shape our new approach.
• New Business Focus:
  • Clarity and Specificity: Our refined business model focuses on Commercial and Residential Services in Interior and Exterior Painting, and Specialty Service in Hot Water Pressure Washing for Concrete Surfaces.
  • Brand Focus: Establishing a reputation of excellence and positioning as a brand leader in the painting industry. Our premium service orientation targets clients who value quality, filtering out price-sensitive clients and DIY enthusiasts.
  • Target Markets: In the Residential Sector, we focus on high-end clients valuing professional, process-driven services. In the Commercial Sector, we aim to develop direct relationships with entities like churches, gyms, and schools, known for their emphasis on reliability and quality.
• Strategic Initiatives:
  • Renew Branding: Revamping visual and communication elements to reflect the new focus.
  • Renew Core Values: Reestablishing foundational principles guiding the business.
  • Renew Mission Statement: Articulating the redefined purpose and direction of Alpha Premium Painting.
  • Operational Excellence: Focusing on systemization and process adherence to ensure excellence in every project.
• Tagline: "Leading the Pack with Excellence in People and Process."

Mission Statement: "Alpha Premium Painting is dedicated to delivering excellence in every brushstroke for our discerning residential and commercial clients. Specializing in interior and exterior painting and high-quality pressure washing, we cater to those who value reliability, professionalism, and superior craftsmanship. Our mission is driven by a commitment to generate immense value for our clients, employees, and community through our top-tier, process-driven approach in every project we undertake."

Vision Statement: "Our vision is to establish Alpha Premium Painting as the foremost authority and industry leader in painting and surface treatment services. We are dedicated to setting new industry benchmarks in quality, customer experience, and operational efficiency. By advancing our techniques, nurturing our professionals, and focusing on client-centric solutions, we aim to redefine excellence in our field. Our goal is to be recognized for superior craftsmanship, service quality, and as a beacon of excellence in process and people management. Through dedication and innovation, Alpha Premium Painting leads in transforming spaces with elegance, reliability, and unparalleled professionalism."

Core Values:

1. Culture of Excellence: Fostering a culture of excellence in everything we do, from our skilled team members to the final brushstroke.
2. Consistent Processes: Adhering to reliable, proven methodologies for top-quality results.
3. Outstanding Customer Service and Quality: Committing to exceptional customer service and delivering superior quality.
4. Value Creation: Creating immense value for our customers, employees, and the company in every project.

@Bounce Back Thank you so much for your time investment, lots of great stuff here Ill continue to chew on. Ill also add the books recommended to the list

 

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[Bounce Back]

Read every word you wrote and I think you've got your head on right for the plans you read out (from what I can tell here). While we disagree about the name change ultimately if you are getting results and making cash it should not be a big deal at all when it comes time to sell.

I used a Transworld broker myself to sell my business and I found them to be excellent personally but its kind of like real estate, agent to agent / broker to broker can be different. I rarely evaluate working with a business as excellent too but I can't really think of something they could have done better for me during the process. They do appear to have a New Orleans office when I just checked their website.

I learned this the hard way, LOTS of wasted man hours “trust hires” (I think we have all made that mistake before)

So true - anyone who has run a service based business will most likely nod their head reading this haha!

Rooting for you and wishing you well with the court process.

 

[DCBrooks]

Read every word you wrote and I think you've got your head on right for the plans you read out (from what I can tell here). While we disagree about the name change ultimately if you are getting results and making cash it should not be a big deal at all when it comes time to sell.

I used a Transworld broker myself to sell my business and I found them to be excellent personally but its kind of like real estate, agent to agent / broker to broker can be different. I rarely evaluate working with a business as excellent too but I can't really think of something they could have done better for me during the process. They do appear to have a New Orleans office when I just checked their website.


So true - anyone who has run a service based business will most likely nod their head reading this haha!

Rooting for you and wishing you well with the court process.

Thanks for that tip, so to clarify you recommend contacting them sooner rather than later so they have input? Just making sure I understand, appreciate the referral!

 

[Bounce Back]

Yes I would explain to them that you are not yet ready to list because you want to get top dollar for it so have some plans in place to grow it a bit before listing. Ask if they could spare some time now for a consultation (ideally free) based on where your company is currently at and what they've seen sell in the market and how to optimize. Also just general help in understanding what the typical sales process in your area looks like/how the market has been.

If you are within the 6months - 1 year time frame I could imagine them not having an issue doing this and I'd stress you are not looking to take up too much of their time just high level evaluation. If they don't I'm sure some other broker would to get you as a future hot lead.

 

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