PAINTING · INTERIORS AND FINISHES · FIXED BY STEP 01

You bid square feet and spend man-hours

You bid it at a buck ten a foot, the job closed months ago, and you still can't tell anyone what a foot cost you.

WHY IT'S A PAINTING PROBLEM

A square foot price hides every single thing that drives production: cut-in ratio, ceiling height, occupied versus vacant, and spray versus brush and roll. On pre-1978 repaint it hides the biggest one, because EPA RRP containment and OSHA 1926.62 controls presume manual scraping, sanding, heat gun work, and spray application at up to ten times the PEL until monitoring says otherwise. The square footage doesn't change, the hours run two or three times higher, and your estimate priced one number for both conditions.

WHAT IT COSTS

The size of it

A 15 percent production-rate miss on an 85 percent labor cost structure is 12 or more points of margin, and it repeats every bid cycle until somebody measures hours against units.

OVERHEAD AT $1M–$5M

13%

CFOS target 12% for painting.

GROSS MARGIN AT $1M–$5M

18%

CFOS target 22% for painting.

NET PROFIT AT $1M–$5M

CFOS target 10% for painting.

Estimates get built in square feet of wall, in openings, or in a price per apartment unit. Cost walks out the door in burdened man-hours. Unless hours and installed quantities post to the same cost code, you never compute a real production rate in square feet per man-hour, and the estimating database never corrects itself. The next twelve bids come off the same number that just lost you money.

WHAT TO DO

Three moves, in order

STEP 01

Break cost codes by the activity you bid, one code each: prep and patch, prime, first coat, second coat, doors and frames, and touch-up.

STEP 02

Require the field ticket to show installed quantity alongside hours, so a code closes with square footage on it and not hours alone.

STEP 03

Post measured square feet per man-hour by activity back into the estimating file every month, and make the estimator use your number before the published one.

THE FIX

Step 01: Job cost structure

Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.

CFOS-01 · CHAPTER 1

Job cost codes that match how you bid the work

What this step changes, what it depends on, and how to tell it's installed.

BENCHMARKS

Painting by revenue band

All 7 bands are published. The CFOS target is beside the figure up to $10M to $25M, and the 4 bands above that are labelled modeled.

ACROSS EVERY TRADE

Cost codes the field ignores

You have 200 cost codes. The crews use four of them, and one is called Miscellaneous.

SAME TRADE

What else costs painting contractors money

PAINTING · CFOS-05

Tinted material is a write-off the day it ships

Forty gallons of factory-tinted coating stay in your shop because the designer went one shade cooler, and the supplier's answer is no.

PAINTING · CFOS-08

Primer finds the drywall defects and you pay to fix them

Primer goes on, every taped joint and screw pop lights up, and the fix comes out of your labor budget and not the drywall sub's.

PAINTING · CFOS-04

Your escalation clause protects the wrong 15%

Paint went up eight percent and you barely felt it. Wages moved four and the job stopped making money.

PAINTING · CFOS-06

The bid paid for two trips and you made eleven

You made eleven separate visits to one job, and the estimate had money in it for maybe two.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

DRYWALL

Level 5 gets discovered after the primer goes on

The spec said Level 4, the owner walked it at night with the wall washers on, and now there's a skim coat between you and your retention.

DRYWALL

Piece rate and square-foot bids agree on flat walls only

Your hangers make the same on a clean corridor as on a bathroom full of soffits, so guess which walls are done Friday and which ones aren't.

ELECTRICAL

You hit the hours and still lost money on the rate

You bid labor in unit hours and the field hit the unit hours. The loss lives in the dollars per hour you converted them at, and it moves the same direction on every job you take.

QUESTIONS

What painting owners ask

How to track square feet per man hour on painting jobs?

You bid it at a buck ten a foot, the job closed months ago, and you still can't tell anyone what a foot cost you.

What does it cost?

A 15 percent production-rate miss on an 85 percent labor cost structure is 12 or more points of margin, and it repeats every bid cycle until somebody measures hours against units.

What do I do first?

Break cost codes by the activity you bid, one code each: prep and patch, prime, first coat, second coat, doors and frames, and touch-up.

What are painting contractors supposed to be making?

Painting runs 18% gross margin, 13% overhead and 5% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 2 points below it. The CFOS target is 10%.

Which part of the system fixes it?

The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 of CONTROL: The Construction Financial Operating System.

OR HAVE IT HANDLED

Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for painting contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for painting contractors

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Wrote CONTROL, the 8 step system behind these figures. More about the author.