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Are you considering starting a painting company or buying a franchise? If so, you probably asked, why should I buy a franchise when I can create my own?
That’s a great question, and there is no correct answer. Each has pros and cons, and as you read on, you can determine which direction makes the most sense.
I’ve broken the pros and cons into four factors in determining if it would be advantageous to start a painting company alone or through franchising.
There is plenty of work out there for everyone, so whichever direction you choose, I wish you the best. However, if you are interested in exploring a franchise, please check us out. I think you appreciate what we offer over other painting franchises.
The biggest advantage is not paying royalties. Royalties are about 6% of gross sales in the home service industry. On top of royalties, there is a brand development fee generally 2-3% of gross sales.
There are some other small fees that some franchises have as well making the overall take from the franchisor between 8-13% of gross sales. To justify buying a franchise, it must be able to offset the fees.
The second largest expense when purchasing a franchise is the franchise fee. Home service franchise fees vary from $20k-80k.
Create Your Business Name: It’s fun to brainstorm ideas for the name, and slogan, and see different logos.
Unlimited territory: work where ever you like!
Change concepts: if you are burnt on one home improvement task you can switch to whatever your heart desires.
If you don’t like to be advised – franchising is probably not a good option. Some people (myself included), need the freedom to create and make mistakes along the way.
When considering building your own company or buying a franchise, don’t overlook all the infrastructure franchises offer.
The advantage of buying a franchise is threefold.
First, you buy a franchise that has tested its model for years.
Choosing the independent route will cost you more time and money. And not just for a couple of months, but for years. If you have little or no experience in the industry you are considering; mistakes will follow you every step of the way.
A franchise has a proven system. When considering starting a painting company or franchising, the franchisee starts with every assumption tested.
Starting a business from scratch does not award you that privilege.
Because our franchise system has been tested, you start with predictable outcomes.
For example, you know how much time or money you must spend on advertising to generate work. And with an accurate estimating system, you know what the profits should be before the job even starts.
An operating CRM system is another advantage of buying a franchise over a start-up independent painting company.
Imagine how convenient it would be to have an answering service speak to the customer, text and email you the information, and send the customer a text it expects a call from you!
Next, after the appointment is booked, the customer receives a couple of emails showing them pictures of recent jobs similar to what they want to be estimated.
A properly tuned CRM system will present a positive company image and lead to a higher close rate.
A start-up painting company rarely will take the time to create a CRM system. Instead, start-up companies are consumed with finding work and hiring people to do the job.
Generating Marketing Materials
The difference becomes more apparent when we look at the steps to having a professional appearance.
Starting a painting company alone will always take longer than investing in a painting franchise.
If you want to start a painting company and do the labor yourself you do not need a social media plan. However if you want to build a scalable painting company with a team of painters than you will need to hire an expert.
According to Entrpenuership, start-up companies spend between 12%-20% of their gross sales on marketing. Established companies can reduce that number by 6-12%
In addition, social media posts for new companies start at $1,500.00 per month, and a more robust and active campaign would cost closer to $4,000 per month.
In my experience, having a robust website appear on the first page will cost about $3,000 monthly for the business’s life.
It is a very complicated and time-consuming process to get good visibility organically.
Remember that you are competing with the big boys, such as Home Advisor, Angie’s List, and painting franchises. When starting a painting company on your own, it may be an investment of dollars to get to the top of the list using Google Adwords, also known as PPC.
According to Forbes, marketing strategies of only three years ago have completely changed.
Having a website with high domain authority and trusted by Google is a huge advantage that franchises offer.
I went through about ten different digital marketing companies over 15 years before I found one that did what it said it would do.
Unless you are an expert in the field, it’s not a wise investment of your time to figure it out. Instead, have a budget of about $25,000 to build a website and continue to invest around $3,000 a month for the business’s life.
When starting a painting company, the bookkeeping responsibilities are the first to get pushed to the side. Your day is preoccupied with estimating, project management, sales, and solving problems. The backlog of admin work happens to everyone, including our painting franchises. So, we added a bookkeeping service.
When you invest in our painting and handyman franchise, you pay a reduced monthly fee to have your books kept current.
This monthly service will give you profit and loss statements, accounts payable, and job cost analysis.
The cost of this monthly service starts at $525.00 a month. This monthly fee is far less than what a part-time employee would cost if you start a painting company independently.
Starting a painting business with no experience will cost you time and money.
The School of Hard Knocks is very real, and Professor Murphy teaches it with a hard stick.
I wish I had someone tell me how to start a painting business. In the beginning, I made a lot of costly mistakes.
Mistakes come in several forms: reputation, money, time and stress.
When you correct your errors, it will minimize damage to your reputation.
However, time is money, and it quickly eats away at the profits.
It’s easy for us to underestimate the amount of work that goes into anything that we didn’t participate in creating. Musicians and athletes make the highly complex look easy. The same is true with most franchise systems. Thousands of hours went into developing and testing processes and procedures, and for the design to thrive, it needs to produce positive results for the franchisees and franchisors.
On the other hand, after a couple of years, franchisees no longer need the support they once did. Yes, they are using the systems and processes but not relying on guidance and support as they once did.
If you are starting a painting company alone, you have a couple of advantages. Firstly, you are not limited to any geographic location. If you start your own painting company, you can work and advertise wherever you want. Painting franchises have specific territories that restrict where a franchisee can work and promote.
Klappenberger & Son is aware of territory limitations, and that is why we give you the most largest territories. Our painting franchises have territories 2-5 times larger than our competitors.
One downside to working in an area too large is the lost time driving. Driving an extra hour per day adds up to 261 hours a year or 11 days straight without sleeping! If I were to advise someone on starting a painting business, I’d suggest targeting local areas.
Franchising has advantages and expenses. The franchise fee can cost between $20k-80k for home service franchises. The franchisor can take between 8-13% of gross sales and additional small fees. To buy a franchise, it must offset these costs. You get to create your name, slogan, and logo and have unlimited territory. You can also change concepts when you want. However, franchising may not be a good option if you don’t like to be advised and want the freedom to create and make mistakes.
Consider franchising for a proven system, predictable outcomes, and an operating CRM system. Franchises offer tested models, saving time and money. A proven system guarantees predictable outcomes, and an operating CRM system creates a positive company image and higher conversion rates. Creating a CRM system takes time and resources, which startups need for finding work and hiring employees. Establish a system and process early to scale your company.
82% of all businesses fail because of poor cash flow.
Investing in a painting franchise is faster than starting a painting company alone. This is evident when considering the steps to project a professional appearance, including a logo, website, marketing materials, license, and insurance.
Having monthly updates keeps you informed of how your business is doing. Small companies that do not know their numbers are surprisingly common. What is less surprising is they are most likely to fail.
The best practice for starting a painting business is keeping your accounting books current.
Having a professional website, logos, and marketing material done is incredibly beneficial. Customers today reach for their smart phones for everything, including calling for painting and handyman estimates. They are looking for a professional company, and our painting franchise provides that. If I were writing a book on “How to start a painting business,” I would include a website, log, and marketing material at the top of the list of importance.
Life is short. When you have the tools, training, coaching, and guidance, you have the ingredients to establish yourself faster. If you can stay focused and disciplined, your margins will be significantly higher.
I believe that the benefits of owning a Klappenberger & Son