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How Does a Companies Overhead Affect Your Price?

One of the greatest myths with choosing a Contractor and some of the Decision Making factors that affect the final outcome of that process is that some companies will be more Expensive vs. others because they are larger entities, have more people, more marketing, etc. and surely are more expensive vs. other perceived Smaller choices. This can prove true for poorly managed Companies who have allowed such things as Leases and over Spending on Marketing and the wrong People to force them to Charge more to Survive. However, the reality is that overhead is a simple percentage of sales and as long as that overhead is managed properly in conjunction with an increase in Sales, no Company would have to charge you a dime more than a Smaller Company with lower Sales. Companies or Individuals make a conscious choice to offer their Services below what the market will bear and they will typically always do so unless professional business coaching or guidance is extended to them somewhere in their business life. Long term business survival is always in peril with such a Philosophy. Keep in Mind Companies have greater sales because they have performed well and served their Clients in a good way. They are successful! The odds are in your favor towards a better, more caring experience and end result. More important to a final selection of a Contractor would be things such as Reputation, attention to Detail, Service Awards, ability to ascertain a project accurately, and a proven track record.

Warranties

Warranties need to be reasonable, sensible and geared towards the environment and/or weather that they will be held accountable to. Warranties that are for extended periods of length greater than what would be considered again sensible given contending weather variances and huge Temperature Swings will be difficult for a Company to honor. Contractors have to be accountable for what they offer their Clients and extending Warranty programs beyond the Point that makes any sense at all will eventually result in Requests and Work Orders greater than the Normal Workload that has to be performed to survive. Given the choice between Work to do now for-profit or Warranty Work, which do you believe will win out in the end? Many of these extended Warranty programs are geared at SELLING PEOPLE NOW with no real consideration of what the future will hold with such offers. It is very unwise in my opinion to pay more for these embellished and ill-conceived offers either to a % increase of the Base Bid or Upgrading to diff. Levels of Quality of Paint. A good Viable business must see the “Forest beyond the Trees”. A Market avg. Warranty offer that considers intelligently the Weather, Altitude, Changes of Season & Temperatures Ranges is what is key to getting something you can Count on. How Detailed is the offer? and does it make sense? In the end, the true value of a Warranty is dictated more by that Contractors’ commitment to it and the Company’s future ability to honor it. Be Careful not to be overly impressed or influenced by some of these offers. Keep in mind the Avg. Life of a Quality Paint Job in a Harsh Climate such as Colorado is 6-8 years and you will typically start to see Horizontal Surfaces being Compromised as soon as within a  yr. & Vertical Surfaces in 3-5 years depending on exposure as already detailed. Paint is just a protective Liquid that while # of Coats help and Quality of Paint counts, cannot effectively long term fight off such harsh & varied Weather as the Midwest and Mountain States.

Owner Operators

What is an Owner Operator? He Owns the Company and is typically going to be On-site Painting with his Helpers. With that defined, is there an advantage to hiring an Owner Operator vs. a company that is organized to have On-site and in the Field Management? Many Consumers think so and I say that very often it will not be the case. 2 major reasons.

#1- Owner Operators typically will Opt out of their Workers Comp. and can do so legally as the Owner of the business. Therefore the Leadman/Owner on your Project will not be covered for on-site Injury.

#2- Is Focus. It is difficult to Focus on your Project and the People he needs to Manage onsite when that Owner has to answer the Phone, Set the Appointments, go to the Bids, do the Bids, get materials, stomp out fires, pay the bills, etc.  The business model that provides an onsite Crew Leader with quality Technicians can provide for greater focus, more consistent attendance, and reliable end results.

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