Diversify Your Business
Transitioning from a residential to a commercial painting business is quite the process, and business owners may underestimate the obstacles and uncertainties that arise when it comes to making the switch. Thanks to COVID, many residential businesses remain financially impacted, as plenty of homeowners hope to save money by doing the work themselves. Because things are so different from how businesses run today, it is now crucial to be well-diversified with your painting businesses, considering what may have worked years ago, most definitely may not work now.
Charlie Irwin, President of Charlie Irwin Painting, LLC, and David Samler, PPG Divisional Manager, both led a discussion during PCA’s live webinar and discussed how to successfully transition into commercial work, as a way to diversify your business.
The Two Main Types of Diversification
Charlie Irwin claimed that there are primarily two different ways to diversify your business, and the first one happens to be by market. It’s crucial to include new market niches you can operate in. Office, retail, hospitality, education, multi-family, and medical facilities are just a few examples, and all of those can be done directly for owners or through general contracting.
“I know commercial companies that were specifically focused on office or retail and when the pandemic hit, their businesses basically shut down. So it’s a good reminder that you need to be well diversified.”
The other type of diversification is in the services that you can offer in your commercial painting businesses. Irwin explains that there are plenty of services that can be added with commercial work to further diversify your business, such as floor coatings, caulking, industrial work, abrasive blasting, shop work, fireproofing, drywall finishing, and more.
Do I Have to Abandon Residential Work Altogether?
Irwin shared that one of the most frequent queries he receives from clients looking to switch from residential to commercial work is whether they must completely give up doing residential work.
“This is where my company started, in residential, and we transitioned over to commercial,” said Irwin. “We didn’t abandon residential, it took us a while to shift completely from one to the other.”
Irwin expressed that continuing to perform some residential work can benefit your commercial enterprise the most because this type of work frequently generates higher profits and pays out more quickly, which can help your business raise working capital.
Lessons Learned from Charlie Irwin
Irwin went on to share a few of the lessons he learned and things he wished someone would have told him two years ago when he started his journey with commercial work.
Starting with accounting, Irwin stated that it is a very important part of all businesses, but especially commercial painting businesses. A great CPA with a background in construction and an understanding of the industry is essential. Construction company CPAs have entirely different responsibilities; they must deal with WHIP reports, over-under billing, and job statements, and properly explain these terms to your bonding company and bank.
Next, Irwin states how crucial it is to make investments in software that will grow along with your company. Software that allows you to add users as your business grows, along with job costing software for the construction industry is essential, because in order to modify your bid, you must be aware of your profit policy for each job.
Learn More About Diversifying Your Business
Charlie Irwin and David Samler were extremely kind to share their knowledge and experience with other business owners in the field. They offer some great tips when it comes to diversifying your business and switching from residential to commercial painting.
To discover further more about the benefits of investment diversification, how to execute a successful shift, and how to avoid problems along the way based on the experiences of these two industry professionals, visit PCA Overdrive to watch the full live webinar, How to Diversify Your Business.
About The Author
Daphne Young is writer for PCA – concentrating on blogs and magazine articles that appeal to PCA’s audience and provide further insight about the painting industry.